McKinsey & Company has just dropped a bombshell report on product marketing, and we’re here to break it down for you.
Their recent report, The growing importance of software product marketing managers is packed with insights that’ll make every PMM’s heart skip a beat.
We’ve delved in, pulling out the key takeaways and adding our own insights. But we didn’t stop there – we also reached out to the amazing PMA community to get their thoughts.
So, grab a coffee and settle in as we explore McKinsey’s findings, share our community’s perspectives, and sprinkle in some data from our own 2024 State of Product Marketing report.
1. The PMM role is set to become a key differentiator for major software firms
According to McKinsey’s report, The growing importance of software product marketing managers, “The multifaceted role of product marketing manager is poised to become a differentiator for the most successful software providers.”
And they’ve got the data to back this up – they found that companies in the highest revenue growth quartile growth have a 25-30% higher ratio of PMMs relative to product managers (PMs) compared to bottom-quartile firms.
But the impact goes beyond just revenue growth. In our 2024 State of Product Marketing report, Sarah Spinosa, Senior Product Marketing Manager at Higher Logic, revealed that competitive intel conversations and quarterly product marketing tours helped reduce losses to competitors by 16%, and losses due to the status quo by a whopping 61% year-over-year in 2023.
And Sarah’s not the only member of the PMA community to have seen the immense value that a solid PMM function can bring. As Amy Halls, Product Marketing Manager at Unily, shared:
Of course, without strong executive backing, it’s hard for any function – no matter how vital – to make its mark. As we noted in the State of Product Marketing report:
“Organizations that recognize the value of product marketing, and provide strong leadership support, are better positioned to leverage PMM’s potential in driving customer acquisition, revenue growth, and overall business success.”
Happily, two-thirds (66.3%) of the PMMs we reached out to said they receive robust leadership backing.
With engaged leaders championing PMMs’ customer focus, market expertise, and strategic vision, it’s no wonder McKinsey views this role as a rising differentiator.
2. PMMs take the guesswork out of product launches
As McKinsey notes:
“Many large tech companies and well-funded start-ups have learned the hard way about the heightened importance of software product marketing, burning through too much cash as they struggle to build sufficient customer adoption on the fly. PMMs can take some of the risk and guesswork out of successfully bringing a new product to market.”
Airon White, Senior Manager of Product Marketing and Competitive Intelligence at BigCommerce, appreciates McKinsey’s report but laments that “many folks don’t quite understand the function of PMM and what we can do when staffed appropriately, and what the downfall is when we are not.”
PMA’s State of Product Marketing report highlights this very issue. While nearly a quarter of respondents reported increasing product marketing budgets, a striking 35.6% said they have no dedicated product marketing budget whatsoever. It’s possible that product marketing activities rely on funding from other departmental budgets or aren’t considered a priority within those organizations – not ideal!
Joan Gaffney, a business coach and consultant, believes the root cause is a misunderstanding of the PMM function:
Could a Chief Product Marketing Officer (CPMO) role be on the horizon? If PMMs can continue proving their ability to de-risk launches and drive adoption, the C-suite may be calling.
3. AI is going to make PMMs even more effective
According to McKinsey, teams leveraging generative AI “should be able to generate, validate, and test ten times as many ideas as previously, thereby compressing the overall product development life cycle.”
Given their critical role in go-to-market strategies, PMMs are perfectly positioned to harness AI’s potential. As Joan Gaffney puts it:
The use cases for AI in product marketing are vast:
✍️ Content generation: Create blog posts, social copy, marketing emails, and more.
🔍 Competitive intelligence: Analyze trends, competitors, and customer sentiment.
📈 Predictive analytics: Forecast customer behavior and market shifts
🤖 Efficiency through automation: Automate repetitive tasks like reporting and data analysis
💌 Personalization: Tailor marketing and product recommendations
🚀 Go-to-market strategies: Identify key insights from large data sets
💬 Customer engagement: Chatbots and virtual assistants
With powerful AI assistants at their fingertips, PMMs can do more in less time. However, as we assess the potential impact of AI, we need to keep our expectations grounded in reality. As last year’s State of Product Marketing Report revealed, over half of product marketers say generative AI has increased workplace pressures.
Take some advice from Christopher Greco, Product Marketing Lead at Toloka:
4. PMMs need clearly defined responsibilities
We don’t need to tell you that PMMs wear a lot of different hats. As McKinsey put it:
“Product marketing managers have an array of responsibilities in the product development life cycle, with ownership varying by task.”
The report illustrates the massive scope of PMM responsibilities, highlighting their integral role in understanding the market, building and maintaining the product roadmap, launching products and features, and ongoing customer acquisition and retention.
Some key areas where PMMs take full ownership, according to McKinsey, include mapping the competitive landscape, defining buyer personas, creating launch plans, crafting sales enablement content, and gathering customer references.
They also share ownership with other functions on crucial activities like developing product positioning, pinning down user personas, and carrying out win/loss analysis.
This is where things get complicated. As one product marketing executive told McKinsey:
“One of the most common failure modes is when companies create shadow organizations without clearly thinking through what the operating model for product marketing, product management, and the go-to-market teams should be.”
We couldn’t agree more! To avoid overlap, confusion, and duplicated efforts, it’s essential to clearly delineate PMM responsibilities and success metrics.
5. PMMs are universal translators
Finally, McKinsey points out what we’ve been saying for years – PMMs are the connective tissue between product development and go-to-market teams.
As McKinsey’s report puts it, PMMs are the ones “translating requirements to help product and marketing and sales teams excel.”
“PMMs move fluidly between product and GTM teams, “speaking the language” of both – and easing a communications and logistics void that has grown wider as software products incorporate ever more advanced features.”
PMMs are like an organizational Rosetta Stone – fluent in the technical language of product managers and developers, the metrics-driven terminology of sales teams, and the creative vocabulary of marketers. They glide between these groups, ensuring everyone’s on the same page (or at least reading from the same book).
McKinsey’s illustration of a software company’s commercial team structure puts the PMM squarely in the center, connecting product development and go-to-market teams.
In the State of Product Marketing report, Mitch Comstock, Senior Product Marketing Manager at MedBridge, emphasizes the importance of this cross-functional role:
So, how do you become this organizational chameleon? Mitch suggests:
- Attending other teams’ calls,
- Joining customer calls,
- Building relationships with individuals on other teams, and
- Leading update calls
But let’s be real – being your company’s universal translator comes with challenges. You’ve got a lot of stakeholders to keep track of – not to mention their competing demands, priorities, and expectations.
However, by embracing this jack-of-all-trades role, you make yourself indispensable. You’re not just translating; you’re facilitating, strategizing, and ultimately driving the success of your product.
So go ahead, flex those linguistic muscles, and show your company what a true PMM can do. After all, in the land of the siloed, the multilingual PMM reigns supreme.
