When I kicked off Propulsion 2022, I also kicked off a whole new vision for Propel. One that includes the whole product, and brings product and customer teams together.
Too many businesses have been stuck addressing today’s problems with yesterday’s solutions, but there’s a new approach. We call this Product Value Management, and it’ll prepare product companies like yours for tomorrow.
Did you know that 60% of companies who were a part of the Fortune 500 in the year 2000 no longer exist?
The pace of change is accelerating in line with a faster market evolution.
In fact, Constellation Research predicts that 90% of the current Fortune 500 will be acquired, merged or cease to exist by 2050.
These decreasing company lifespans correlate directly with increasing rates of technological innovation.
What does that mean for you?
As a company that manufactures products, it’s always meant the same thing: innovate…or die.
But, in today’s rapidly advancing digital world, how do you take a step back and ensure you’re making the smartest investments in digital transformation and innovation that will drive the highest ROI?
It’s called Product Value Management (PVM)—and it’s the future.
The Customer-First Revolution
Almost 9 out of 10 of buyers state the experience provided by a company is just as important as their product or service. We refer to this as the “whole product” strategy.
Thinking about the whole product allows companies to engage with customers on multiple levels—long after a product is sold. Companies who embrace it are revolutionizing customer engagement and creating new revenue opportunities.
In response, product development has been completely turned around: it used to be a serial process that started with suppliers and ended with customers. Today, successful product companies have done a full 180. They’re starting with identifying lifetime value and ongoing revenue streams and then determining what suppliers are needed to fulfill the demand.
This switch has changed the way in which product leaders should think about building new products.
It’s a transformation to whole products and omnichannel customer engagement that requires product companies to rethink traditional roles. Product managers are becoming general managers, where their definition of success is changing from units sold and average price, to post-sale customer engagement and average revenue per user.
Key Performance Indicators are transforming as well—10 years ago they were focused on lifecycle costs, now they’re fixated on profit margins and revenue streams.
That’s where today’s product companies are struggling.
When companies first made the leap into technology in the 1990s and early 2000s, the technology that was cutting-edge at the time put customers at the end of the process.
The world has since reversed. Businesses are now starting with customers and ending with suppliers.
Legacy technology has not, and cannot, make this leap. That’s because their products can only address specific linear problems—and provide siloed solutions rather than a whole-product view.
- They were not built to account for the customer within their product development process.
- They were not built for constant supply chain disruptions.
- They were not built to help product companies meet corporate responsibility or sustainability goals that are mandated today
Solutions are also neither flexible nor nimble, so they have not been able to evolve fast enough to meet today’s needs. This has left long-time customers of legacy product technology companies frustrated and feeling stuck or left behind.
We surveyed IT and Business leaders using legacy PLM/QMS technology and found that:
- 75% say their product and commercial teams don’t collaborate effectively
- 79% say they don’t arm commercial teams with enough product information
- 82% delay sales and marketing until late in the product development process
And a staggering 82% don’t know how profitable a product will be until late in the product development process.
How can we expect product companies to be successful in this new customer-first world without a direct connection between products and customers?
Making the Move to Product Value Management
Over the past few months, we have shared our vision with leading analysts such as Gartner, Forrester and CIMdata, as well as major partners like Salesforce.
Their response has been overwhelmingly positive and consistent: revenue must be a part of the equation for product companies.
As key performance indicators evolve with changing market conditions, technology solutions must also evolve to meet the needs of the most innovative companies.
The focus on “whole products”, product lifetime value, and recurring revenue streams is foundational for the future success of all businesses.
To make the move to product value management, we must combine the entire product lifecycle into a single platform that connects customer feedback and insights directly into product development. This closed-loop system enables companies to implement feedback, launch, and iterate faster than ever before.
That’s why we’re not only transforming companies, we’re transforming ourselves. Our Product Value Management platform combines the highest-rated QMS, PLM, and commercialization software into a single platform.
Whether you’re new to product development or are an industry veteran, take the leap to Product Value Management by staying updated with the current industry trends and technology with Propel.
To learn more, check out our PVM Handbook—the ultimate guide to product value creation and capture.