Making great products is not enough in software these days. The “build it, and they will come” mindset will no longer lead to success in this ever competitive space. As software products become more sophisticated and customers more discerning, the path to market acceptance has become much more complicated. Companies need different capabilities to navigate this more challenging environment, with sustainable success increasingly requiring a role devoted to understanding and priming the market—one known in the industry as a product marketing manager (PMM).
In this new era, where more and more companies are embracing product-led sales, PMMs can take some of the risk and guesswork out of successfully bringing a new product to market. They provide essential orchestration and expertise at each stage of the commercialization journey, both before and after the product gets into the hands of customers.
This shift in capabilities comes as software investors are changing how they measure success. From 2022 to 2023, 84 percent of publicly traded software companies saw their valuations drop,1 with more than a quarter experiencing a decline of more than 50 percent.
McKinsey examined the relationship between robust product marketing functions and revenue growth among the top 100 software companies by revenue. The findings affirmed the pivotal role of PMMs in helping their companies’ products propel growth. Companies in the highest revenue growth quartile have a formalized PMM function and exhibit, on average, a 25 to 30 percent higher ratio of PMMs to product managers (PMs) compared with those in the bottom growth quartile, averaging approximately one PMM for every 1.6 PMs. These PMMs also come from diverse professional backgrounds, with an average of roughly 11 years of experience across disciplines.
Despite the similarities in their abbreviations, the emerging PMM role in no way reduces the importance of the core PM job. But as that position’s responsibilities have expanded greatly and shipping software has become more complex, PMMs have started to play a key support role, acting as a strategic connector between the various functions involved in launching a new product. Based on our market experience, research, and interviews with a number of industry executives, we believe this role is poised to become a differentiator for the most successful software providers. This article examines the shifting market environment that has fueled the PMM’s growing importance, how the role can make a significant impact for companies, and what it takes for an organization to reap the benefits of the PMM capability from the outset.
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