planning so that it will not impact the sales of the existing product, or at least minimize impact

on current sales.

For example: How late I should go to avoid letting sales and/or customers know about the new
product? And what are the considerations to migrate existing customers to buy new product?

Answer from Bob Corrigan of ack/nak: There are a few questions here, but let’s explore the
heart of the issue first before throwing any ideas around, shall we?

You have elected to respond to competitive pressures by releasing more product. I’m going to
assume (danger danger) that this was the best approach, but I’ll come back to this later.

You’re concerned that customers will stop buying the old product as they wait for the new one.

You’re right. Once knowledge of a new version gets out into the wild, prospects will wait for it,
slowing down sales cycles to evaluate the new version if these new features are truly core to its
competitive position.

One challenge is that your sales folks and sales engineers are probably aware that there’s a new
version cooking and have been telling prospects “that’s fixed in our next version” or “we add
that in the next release.” It’s entirely possible they know this because you told them. This has the
impact of slowing down sales. It also has the impact of putting your sales channels on the
defensive.

If you’ve taken the extraordinary step of publicizing the features in this new release to a broader
audience, this will also slow down sales. It will also aggravate buyers who are not on
maintenance contracts who purchased your software prior to news of the new feature(s). And
depending on how often you spring these new releases on the market in response to competitive
pressures, you may earn the reputation of being a follower who isn’t anticipating customer needs.

So now let’s look at your question of “how to manage the new product planning so that it will
not impact the sales of the existing product, or at least minimize impact on current sales.”

For planning purposes, the best way to address this by baking it into a rigorous roadmap process.
When I was the product manager for InstallShield, we had a schedule for releasing new versions
of the product in the spring and fall of each year — customers and prospects came to anticipate
when new stuff would land, and we were able to structure our marketing (and revenue
expectations) around that schedule.

In the absence of a regular release calendar, again I recommend a structured way of

communicating new capabilities to the channel. I’m not suggesting you treat them like
mushrooms (“keep them in the dark and feed them s__t”), but that you wait to publicize the full
range of product capabilities to them — with associated sales enablement tools — until a fixed
time before the launch, perhaps a month. It’s hard to control the flow of information, but it’s
better to ramp up the channel once with comprehensive data than it is to dribble half-facts and
non-actionable information to them over a long period of time. This helps reduce the impact on
sales because it reduces the “freezing effect” of ersatz announcements on current sales cycles.

The second approach to minimizing the impact on current sales is to push maintenance harder or
to offer some form of 30-day upgrade guarantee to buyers. This should be tuned to your
particular type of software and the length of your sales cycle, but it helps buyers feel like they
can buy now and still get the benefit of new stuff. Note that this works best if you’re doing a
super job of controlling the flow of information and doing a good job of communicating with
customers about new releases.

Without knowing more about your product and the problems you’re seeking to solve, it’s hard to
be more specific. But I can offer the following universal truth: the best response to a competitive
action is not always an equal and opposite reaction. Did you really need to respond to their
capability with a similar one? It could be that they are working to redefine the problem in the
minds of the customer to steer the solution closer to their core competency, not yours. It could
also be that they are trying to throw you off your release cycle by putting a “must have” feature
into the market and calling you out to respond to it immediately.

But the most insidious possibility is that the feature — while important to a vocal subset of the
target audience — really isn’t that important in a strategic sense. Did you really confirm that the
capability is necessary to solve the core problem at the heart of your product strategy? To put it
in Pragmatic terms, does it help solve a problem that is “urgent, pervasive and which people are
willing to spend $ to fix”?

You can’t assume (there’s that word again) that the competition is addressing a compelling need
just because they took action. Sometimes you need to respond to a feature with words: “The
competition thinks the problem you have is x, so they released feature foo. What we’ve learned
from talking to companies like yours all over the country is that the problem is actually y, and
here’s our strategy for addressing it. What’s unfortunate is that while feature foo doesn’t get you
any closer to solving your problem, it is really appealing to some users. Here is how we address
it with our current product with bar…”

Product management can’t solve every market problem with product. This leads me to the very
brief answer to your last question: “what are the considerations to migrate existing customers to
buy new products?”

The answer is “do a better job of solving their problems than the other guy, and do so in keeping
with a strategy that they understand and value.” Selling software isn’t like gavage — give your
customers a compelling reason to move and they will.

4 other answers so far ↓

 Raj // Jun 2, 2009 at 7:41 pm

Great points by Bob.

 Just like Bob, I too feel like I have insufficient understanding of the question. That said,
here is a point I’d like to share.

If the new product is just an upgrade over the current product and is sold for the same
price – then prospective customers may want to wait until the new version to purchase.
One possible way to overcome this issue is to offer them free upgrade to new versions of
the product for a period of N months after their original purchase.

- Raj
Accompa – Affordable Requirements Management Tool for Product Managers

 PuristProductManagement // Jun 10, 2009 at 9:28 am

I’ve come across this problem multiple times, and the answers really depend on the
context of the product, but in essence I agree with Bob. In the past the first point of call
for me has been to investigate whether there are incremental release benefits that can be
drip fed, although this sometimes dilutes the marketing message

 David Locke // Jun 29, 2009 at 12:09 pm

I would wonder why you need a new product. With an appropriate architecture, you can
sell a plug-in or supplemental web services to features without modifying your
underlying product.

Doing this would mean that you have to have an appropriate sales force structure, and
other organizational impacts. The needed changes might move beyond the scope of the
product manager, or it may change the scope of the offer and the product manager’s
responsibilities.

 ban // Apr 29, 2010 at 9:36 pm

I think you should offer an extra with the older product once you have introduced the new
version, keep the price of the older product less than the newer one but add something to
it that can work with it , for example a printer needs a ink cartradge to work, there are
two products that work together. depending on what your product is think of something
you can add to it to make it as good as the new version.

the new version may have new features but the old one has older feature but at the same
time it has an extra product on the side that appeals as much as the new version.

in other words it’s like buy one get sumthing free

if that makes sense.

i am only a uni student doing business and i dont know how much help i contributed , but
putting myself in the position of the customer, this perspective would be helpful. may be
even do a survey ? ..
What do you think?