The biggest competition for you is Inertia of the customer

B2B, competition, Customers, Decisions, niche, Sales

One of Newton’s laws of Motion is – Law of Inertia – Nothing moves unless a force is applied on it.

As a sales person, for you the biggest competition you will face, is with the customer, not wanting to change the status quo. The customer always has a choice

Buy from you
Buy from your direct competition
Buy something else which can solve the problem – albeit not the same way – but solve it does
Remain with the status quo

It’s very nice when the customer buys from you. All the hardwork put up by you and your team, during the sales cycle, pays off for you and your company. In case of the second situation, where your direct competition is involved, you can take steps to pre-empt the competition, from taking away the sale. But to be fair to them, they may actually be better than you, in some cases. Either their solution is more apt for the customer or the sales person involved understands the customer better or she has a better relationship with the customer.

If the customer solves the problem with a different method, then you could be caught off-track. When I was involved in selling single and dual loop process controllers, a lot of times , after, SCADA systems became more affordable in India, I found, customers thought it better to go in for the complete SCADA system, rather than buying a controller for 2 processes. In other example, a person may prefer to travel by road instead of taking a flight. So the airline company lost the deal while the petrol/gas companies and hotel companies got business. In either of these situations the customer did go for a solution, it may not have been the solution which was being sold by you.

The worse situation is when after putting in months of effort, you realise that the customer is not willing to change. This is more painful in case of high value B2B sales, where multiple teams have to be involved to create a solution for the customer.

In B2B situations, the easiest situation for the customer is to not change anything. If it ain’t broke, why change. Change can mean that the new product/service will not work. If it doesn’t work, the peer level pressure that the manager will face will be enormous. It will be the manager’s failure, which will be highlighted to her forever, until and unless she works in an organisation which likes to try new things to succeed.

Sometimes it is easy to find out if your solution is moving forward or not. At other times you have to question the assumptions at different levels of the company’s hierarchy to identify if there’s any chance that your solution will be held back to maintain status-quo. It sometimes happens that you may have a sponsor at the lower level of the organisation, who wants to adapt your solution, but her manager may disapprove because she is scared of failure.

It may also happen that the benefits that you believe your solution will bring to the customer, is not what the customer believes. In that case it is your responsibility to showcase the benefits. On the other hand if the benefits are only going to “move the needle” marginally, then the customer may not be interested in moving forward and taking the risk.

The best way I have found, though not always successful 100% of the time, is to question the customer(s) on why they want to go in for the solution. What is the benefit they are assuming the solution will bring for them and why is the benefit(s) important to them. And then check this same thing at different levels of the hierarchy. If at any time you notice a dilemma or a “Re Flag”, you need to get cautious and keep digging till you find out.

If you focus on any niche in the market, then this becomes a lot easier to handle, because 80% of the issues that companies have will be similar and you can learn to unearth the issues in advance.

Till next time then ….. identify if your customer has any inertia holding them back.

Carpe Diem!!!

Entering a new technology based B2B business – Part XII

B2B, checklist, Marketing, Technology

Targeting to become the market leader in 5 years

This is the last part of the 12 point checklist that I follow to identify whether we might be able to succeed with a new product or service line. Originally I intended to call this post – Targeting to dominate the market. But then I realised that the word dominate could also have negative connotations. So I renamed it as becoming a market leader. However in the content, you will see the use of the word “dominate”. The idea is only to bring out a forceful point.

In the last post, I brought out a concept of Life Time Value of a customer. This is a concept, I first came across, while reading books by Jay Abraham. Subsequently, a lot of other US authors/marketing consultants also wrote about it.

This is a fairly simple concept. If you pick up an order from a customer, and you provide them with a good experience, then what is the amount of business, she can give you over an extended period of time, that she remains a customer. This can define at what value you can acquire a customer, such that in the long run you can make a profit which is much higher, than if you had not acquired a customer.

Related to this concept is also the concept of becoming a market leader. So you look at any business and see if you can be a dominant player in that market. When that happens , the momentum also helps you bring in business.

But to be able to dominate the market, you need to be able to identify the total market size. Then you need to see, how much business will you be able to pick up in a year, then two years etc. Now if, in 5 years, you think you can pick up a substantial part of the overall market, and at that revenue level you are making good money, then its worth getting into the market.

On the other hand, if you realise that even after 5 years – either you are not able to pick up enough business or even if you can pick up the business, you can’t make profit, then, its not a market worth entering.

Combined with the life time value of a customer, you can determine the marginal cost of acquiring a new customer, and then the velocity that you can create, because of repeat orders, referrals etc.

If on paper you can work this out, and it’s profitable, then you actually go out into the market and test your hypothesis. At the end of the day, the market determines your success or failure. But if you have taken care of as many challenges, that can occur, you increase your chances of success.

To the success of your product / service launch.

Carpe Diem!!!

Entering a new technology based B2B business – Part XI

B2B, checklist, Marketing

What are the backend opportunities available to you

If you have read some of my earlier posts, I have talked about the Life Time Value of a customer. I came across this concept , first, when I read Jay Abraham’s works. If you haven’t. heard of Jay, you should go and look him up on YouTube or Vimeo. He has an amazing number of thought provoking, marketing related videos.

Now coming to this episode, on the checklist that I have been running for the last few weeks. It doesn’t make sense to acquire a customer, if you are only going to do one transaction with them. In a B2B context, it’s extremely expensive to acquire a customer. Expensive both from time and money perspective. At the end of the day, you are running a business or product line. You are not running a charity.

So every customer has to become profitable for you. You may initially acquire the customer at cost. But you should be able to sell him more of the same product or other products or services, which can then get you profitable.

To be able to take a decision to acquire a customer, even at cost, you need to be clear, from the beginning, about the life time value – simply put, what else can the customer buy from you and how often, over a period of time that she remains a customer with you.

For example – we acquired a global television brand as a customer by just selling an item worth about $20K in the first transaction. Over the next five years that company gave us more than 0.5 million dollars of business. This would not have happened, if we had not taken the first low value order. Of-course the caveat is, that you will provide the customer with exceptional service in the first deal and in all the deals, so that they stick to you and want to keep doing business with you.

The advantage of B2B, that I have reiterated multiple times earlier also, is , that there is a lot of inertia in corporates. If they have a good supplier for something, they don’t want to waste time, trying to identify a new provider. So once you get in and provide exceptional service, B2B buyers will generally ensure that you have continuous business from them, even when they know you are not the cheapest. That is because they value reliability over cheapness.

So whenever you launch your new product/service, please also analyse and see, what will the customer need, after they have used your product/service. Can you help them realise more benefits, in areas other than the one they have initially taken from you. May be you start with some product or service from the plant, can you go to their finance and offer something else, or can you go to marketing and provide them something. Then see if the revenues from all these backend services will be worth doing the first transaction with the customer at “cost”.

In my next post I will elaborate further on this concept and how you can use this concept to dominate the market.

Till next time then.

Carpe Diem!!!

Entering a new technology based B2B business – Part X

B2B, Marketing, Marketing Stamina, new launch

Is the solution dependent on a specific platform or product to be able to deploy

It has multiple times for me. We thought we had a niche market, where we were the dominant player and anyone who needed the service, had to at least check us out. But then the base product, on which our services were based, suddenly started losing market share. New upstarts started capturing the market, for that product, with their offerings and suddenly within a matter of a couple of years, we had lost a complete line of business.

So as a matter of policy, now, whatever new service we launch, we make it a point to ensure that the services can be deployed across multiple platforms without any significant disruption in our revenue.

If you look at other industries also, you will find a lot of such examples. In the telecom space, with the CDMA technology becoming obsolete, all the companies that only made CDMA phones, suddenly had to rethink their operations.

In case you were making software for the Blackberry phones, with the advent of Apple and Android phones, the demise of Blackberry phones was amazingly sudden. So if you were building software, that required the code or security, of Blackberry, to make it run, you were also suddenly out of business.

So while this post is short, if you have been reading my posts on this subject over the last 8-9 weeks, then you will realise the benefit of this item on the checklist. Ticking this item will ensure that you have sustaining power in the market.

Sometimes it so happens, that we forget this point, because we get success with the first platform on which our solution is based and because the revenue is consistently flowing, no one wants to disturb something which is going on well. And then you get hit from nowhere.

So please ensure that you have multiple platforms available to port your solution.

Till next time then.

Carpe Diem!!!