TL;DR: A strong product and sales relationship is crucial for any company’s success. Ideally, these teams should work together seamlessly with a shared goal and a collaborative spirit. However, tension can sometimes arise, as with any other working relationship. But if you’re in product management and don’t see the sales team as a valuable partner, it’s time to reframe how you view this critical collaboration.

Introduction

Collaboration is key, but different teams have different priorities, which can lead to misalignment. The standard product management stakeholder chart is a good starting point, but a more expansive view is useful to consider. This includes understanding the perspectives of your sales and business development counterparts. This information is valuable for everyone involved in product development, from junior product managers just starting out to senior leaders seeking to improve team collaboration.

Product and Sales: A Symbiotic Relationship

While product development is crucial, sales are the lifeblood of any company. Early startups may need to rely on sales success to secure funding and keep the lights on. And in established businesses, often revenue ultimately depends upon sales efforts.

Ideas of “product-led growth” have gained traction, but don’t necessarily negate needing a sales pipeline. Many products still require a sales push, even alongside PLG strategies.

Understanding Each Other’s Realities

It’s important to recognize the different compensation structures for product and sales teams. Sales reps often have commission-based pay, meaning their income depends heavily on their performance. And performance means closing deals.

On the other hand, product teams typically receive a fixed salary. While your product’s success impacts the company’s overall health, and your performance of course matters, your paycheck isn’t directly tied to immediate sales numbers.

To sum up: Over the long term, you depend on sales if you want to keep eating and pay your bills, but their near-term income level is probably much more dependent on you to put out quality products.

Building a Strong Partnership

Here’s the Sales & Product Strategy at the Highest Level.

Ring the bell.

That’s it. Yes, there’s more; both strategically and tactically. And those things will often depend on your industry, but that’s it. You are – together – either delivering value or not. I should clarify. You’re either delivering enough value that people are willing to pay for it with enough money such that you are a profitable business, or you’re not.

Bridging Gaps

Product teams often have the closest ties to development and marketing. What sometimes happens is product people can become entrenched in feature work, especially in startups. Whereas sales operates on the front lines, directly interacting with customers. Understanding each others’ perspectives is crucial for smooth collaboration. Both are vital for a company’s success. By fostering understanding and teamwork, product and sales can work together to achieve shared goals.

Sales & Product: A Collaborative Journey to Value

The Ultimate Goal: Delivering Value Customers Will Pay For

At its core, the product and sales relationship boils down to one strategic objective: delivering value that customers are willing to pay for. This ultimately determines a company’s profitability.

Beyond Feature Frenzy

Product teams, especially in startups, can get laser-focused on building features. While features contribute to overall value proposition, it’s crucial not to miss the bigger picture. Sales needs to be able to effectively communicate the product’s benefits and solve customer problems.

Minimum Viable Assumptions, Not Minimum Everything

The concept of a Minimum Viable Product (MVP) has evolved. Over time, there have become strong suggestions that the real focus of the concept is about testing core assumptions and minimizing risk; not merely delivering something minimal. However, for some products, a “minimum” approach might not be “viable” even in the short run. This might be especially true for products complex enough to necessarily involve a sales component.

Beyond the Initial Big Idea

Startups have a natural drive to get their products to market quickly. But for products reliant on sales, it’s necessary to move beyond the initial “big idea” and gather more market feedback. Value in product eventually translates into profitability and ultimately determines the company’s success. By working together with sales, product can ensure features address real customer needs, and sales can effectively communicate value propositions.

The division and sharing of responsibilities will differ among companies, often depending on the company stage. It’s best for all if responsibilities have been thoughtfully and strategically aligned with the marketplace.

• Understanding Customer Needs: A Multi-Channel Approach: A key aspect of the product/sales collaboration is understanding customer needs. Sales, being on the front line, gather valuable insights through direct customer interaction. Product managers leverage this data to inform product development and improvement. However, it’s important to go beyond immediate feedback. Analyzing usage data and conducting market research (often a marketing function) helps identify broader trends and potential future needs. Product has a responsibility to “look around corners” into the future and leap beyond short term stated needs, but the direct voice of customer is also an invaluable channel. Additionally, “product councils” with existing customers can provide valuable feedback on product direction.
  
  
• Market Analysis and Research: While typically a marketing department function, tasks may be shared among marketing, sales, and product. The needs are for market analysis and research to identify trends, competitors, and opportunities. Sales teams contribute by providing feedback from the field, including insights into competitor offerings, market demands, and emerging needs.
  
  
• Setting Product Priorities: Product managers, informed by sales and market research, prioritize features and enhancements. Sales input helps align product development with customer demand, enabling more informed resource allocation. When it comes to launching new features or products, product managers collaborate closely with marketing and sales to develop a go-to-market strategy. Marketing crafts compelling messaging and identifies target markets, while sales teams receive training and materials to effectively sell the product.
  

• Go-to-Market Strategy: Product managers collaborate with marketing and sales to develop go-to-market strategies for launches and feature releases. Sales teams play a crucial role in communicating value propositions, identifying target markets, and devising sales tactics and messaging. Product managers may provide materials, training, and support to ensure sales teams are equipped to effectively sell. Often these functions are handled by a marketing department, supported by product. If you’re building collateral material for sales, then you’re probably a “product marketing manager.” But if you’re the sole product person, note that very few can do all of these things expertly, which is why you want talented marketing folks on your team as well.
  
  
• Feedback Loop: The collaboration doesn’t end at launch. Sales offers ongoing feedback on product performance, customer reactions, and market dynamics. This feedback loop allows product managers to iterate on features, address customer pain points, and improve the product offering. Product managers should also be involved in win/loss analysis to gain insights from both successful and unsuccessful sales efforts
  
  
• The Ultimate Goal: Sustainable Revenue Growth: Help Sales sell what you’ve actually got. Ultimately, the partnership between product management and sales is focused on driving revenue growth. By aligning product development efforts with market demand, effectively communicating the value proposition to customers, and continuously iterating on customer feedback, product management, and sales work together to maximize opportunities, acquire new customers, and retain existing ones, leading to sustainable revenue retetntion, growth and success.
  
  In short, everyone Rings the Bell. If what you’re doing isn’t leading to more predictable consistency at the top of the funnel, solid customer lifetime value, and profitable outcomes, you don’t have a long-term viable business.

Resolving Friction in Product Development and Sales Collaboration

Common Challenges on the Road to Success

Even in well-functioning companies, tensions can arise between product development and sales teams. These often stem from differing priorities and goals. Let’s explore two common scenarios:

Scenario 1: Feature Requests vs Product Vision in Software Product

• Challe­nge: Sales encounters a potential customer requiring a specific feature to close a deal. Product management deems it low priority or unsuitable for the broader product vision.
  
• Considerations:
  • If you’re a Development Shop: This is easy. You Build the feature and charge for customization.
  • Product Companies: Aligning with the product roadmap and avoiding feature bloat is crucial. You may need to reject the change or delay it. (Assuming these are your choices to make.)
  • Startups: Survival may necessitate building the feature. However, exploring alternative solutions like APIs or professional services could offer a middle ground. (And avoid falling into a dangerous trap of custom development for an aspiring product company.)

Scenario 2: Product Modification for Large Deals in a Physical Product

• Challenge: A major customer wants to purchase a significant quantity. But on the condition of modifying packaging type; which also requires a packaging size change.
  
• Considerations:
  • Financial Impact: Analyze the impact on profitability, factoring in discounts, volume-related adjustments, and potential disruption to logistics.
  • Brand Awareness: Evaluate the brand exposure and visibility gained from this large customer.
  • Incentive Misalignment: Sales incentives focused solely on gross revenue can conflict with overall profit margins.

Navigating the Decision Process

How do you navigate through these situations? After all, you are on the same team. Here are two general approaches to resolve:

• Tactical Solutions: Addressing immediate needs within existing framework.
  
• Strategic Alignment: Defining long-term goals to ensure harmonized objectives.

By prioritizing strategic alignment upfront, many of these challenges can be mitigated. Open communication, collaboration, and a shared understanding of the company’s goals are key to a successful product-sales partnership.

Tactical Solutions: Prioritization and Evaluation

When tensions arise between product development and sales, tactical solutions can address immediate needs within the existing framework

• Tech Products: Feature requests for individual customers must be evaluated against the overall feature prioritization list. Adding custom features that don’t benefit the broader user base can create technical debt and product bloat. This can be a strategic trap for aspiring product companies. Consider alternative solutions like APIs or professional services if customization is necessary. If you don’t have clarity here, I suggest looking at my article on Feature Ideation and Evaluation for Product Managers. The answer is, “If the functionality requested is not accretive to the overall product offering you shouldn’t do it.” You’ll be creating a custom solution for one customer that adds maintenance and technical debt while adding product bloat for everyone else. This is among the most dangerous traps an aspiring “product company” faces.
  
  
• Packaged Goods: Prioritize based on Key Performance Indicators (KPIs). Are top-line sales or profitability goals more important? Analyze the specific deal in light of these objectives. Consider factors like brand lift, potential friction with other partners, and manufacturing capacity.

Strategic Solutions

Prioritization should be much easier if your company has a strategic framework for them. First is whether an action is aligned with the Vision/Mission. After which we get to more tactical level goals and objectives and their implied strategies.

Another way to form strategic decision models at the product level might be to look at your overall product and pricing structure. If your offerings are fenced and packaged into profitable pricing models, this should provide direction. Looking at Customer Lifetime Value (CLTV) and its components, Average Revenue Per Account (ARPA), Development and Delivery Costs (DDC), and Customer Acquisition Costs (CAC) should guide you. One way or another, any business comes down to unit economics. As a product manager, even if you’re not directly responsible for pricing, I highly recommend the book, “The Pricing Roadmap,” by Ulrik Lehrskov-Schmidt. If the decisions you need to make can be assessed in terms of alignment with the strategic directions implied by your product and pricing structure, then your answers should come more easily.

If your role as a product person also involves pricing strategy, then it’s as critical as ever for you to be close to sales. You need to fully understand the price elasticity of your product, how to build your product structure to align with customer procurement issues, discounting, and so on.

Conclusion

In conclusion, a strong product-sales relationship is both strategic and collegial. While resource limitations often lead to trade-offs, a high-level strategic framework can streamline decision-making. If such a framework doesn’t exist, consider initiating a project to establish it.

Product managers often have deep ties to development. This can be due to their background or comfort level. However, it’s crucial to remember that sales directly translates vision into revenue. Whether your product is revolutionary medical software or the tastiest candy bar ever, someone has to pay for it. For many companies, that someone is found by the sales reps who “ring the register.” While disagreements and tensions may arise, fostering a strong relationship with sales is vital. They are the key to achieving your goals and, ultimately, getting paid. We might have our grand visions for the future and how we can change the world, but most often – at least in a commercial business context – we can only get there if our outcomes are financially successful.