The Value Knowledge Gap

What is the number one thing that a product manager has to do? There are many responsibilities of a Product Manager that other people can pitch in and help with such as product marketing, requirements definition, market research, etc. But there is no other individual that can make sure the Value Knowledge Gap is filled. What is the Value Knowledge Gap (GAP)? The illustration below shows it best





Notice that I am lumping people together that are both inside and outside the organization. (I use the term “Buyer” here as defined by Phil Meyers in his excellent book “Tuned In”).

Every organization has a few key people that clearly understand the value of a company’s solution within a market. They probably lived in the market, spent time in the trenches, immersed themselves in the technology behind the solution, and can recite the value in their sleep. Unfortunately if the company is going to grow, these individuals (always few in number) can not talk one on one to everyone in the market. They have to rely on others to both explain and understand, or else the people in the market and the organization find themselves sorting through a bewildering collection of features and costs?

The Product Manager is uniquely positioned in the middle of the GAP, and needs to fill it before the product hits the market or your company is not going to be firing on all cylinders. They have to explain the value. Value (with a capital V in this post) is simply:
Value = Size of Problem ($) – Cost of Solution ($)

The best way to fill the gap with is with content. Creative web-sites focused on customer problems, informative blogs, webinars, etc. are great for Buyers (David Meerman Scott lays it out for you in “The New Rules of Marketing and PR”) , and your internal stakeholders will appreciate product demo’s, data sheets, ROI calculators, etc. that help tell your story. But before you start creating the content you need to make sure you have the elements required to determine the Value.

I break the Value definition process into the three steps shown below: (much of this thinking is based on the Pragmatic Marketing framework):
Explain Problem – High level summary targeted at the organizational level
Needs - High level statements of action that must be performed
Problems – Preventing needs from being met (Hint: make sure you can state them as problems. If you can’t you probably haven’t identified the problem yet.)

Note: If your product is attempting to create a need (i.e. a new market) or is not solving a problem this process may not work, but neither will any others. Good Luck!

Quantify Opportunity – Determine the time it currently takes to perform tasks for each person
Persona – Roles played by people in the organization.
Tasks – Specific actions that persons perform. For each task answer the following: Does my solution affect the duration, frequency or quality of this task?

Offer Solution – Explain the features and price of the solution, and map these features to the tasks performed by the persona’s.
Features – Units of functionality within the product
Pricing – The total of all fees and services. Value is only understood for a complete solution.

Need an example? Let’s use a successful company that we all admire (I hope) with a plan for a new search engine as an example of each phase:

OK that was cheating, but you get the picture. Time savings per search is easy for everyone to assign value to.

Here is what I like about this model. It helps you figure out where the Value Knowledge Gap is coming from. Maybe you aren’t explaining the problem, or maybe your product doesn’t seem to solve it.

I am guessing that you will find variation in where the GAP is coming from in your organization from market to market and product to product.

In this blog I will discuss ways to fill the GAP. Thankfully it is a never ending pursuit because, as I said before, it is the one responsibility a Product Manager has to fulfill. If there were no knowledge gaps, I would not have a career!