Riding the elephant – the relationship can cause challenges

Marketing, Positioning, Symbiotic relationship

As a small company when you get into a relationship with one large global OEM, you don’t have the wherewithal to invest in otherrelationships.

Also when you get into a relationship, and you can’t get into multiple relationships because of the size, you tend to get marked with that OEM. All your customers see you as a provider of services or products around that OEM.

I always love taking a position in the market. While you eliminate a lot of customers in the market, the customers who stick to you will always be the ones who are willing to do business with you because of your capabilities around that OEM.

That makes it easier to do business. It becomes easier to make money. But you need to keep a track of where the elephant is going.

I have faced situations where we had such a strong position in the market, that customers would line up for the services. However suddenly there was a new set of disruptors who entered the market and within maybe 3 years or so the OEM with whom we were aligned did not see a future and they dismantled the sales teams.

Suddenly the investments we made were worth nothing. That was the easy part. The tougher part was the fact that customers always thought of us as a specialist on that product line. So they were not willing to consider us for others in a similar line of business.

That is a very difficult situation to be in.

As we grew bigger we made it a point to look for OEM agnostic solutions as far as possible so that we could target a larger piece of the audience.

However for a small company my advice would still be to find the right elephant. Its always worth the risk. Once you grow big, then you could look at diversifying.

Till next time then.

Carpe Diem!!!

Riding the elephant – using the power of relationships – 2

Marketing, Marketing Stamina, Product Management, Symbiotic relationship, Trust

While I wrote yesterday on one of my favourite ways for a small unknown company to grow big, by working with an international giant, trying to make inroads into the country, this process is not without its pitfalls.

First – Its a long process where you have to first find the right company, then the right product for you in this company and then right people who are willing to interact with you and take you forward. You have to make investments without any commitment from the principal company that they will help you get business. Even if they make any commitments, it has no value if they themselves are not able to get business. I have invested some times, almost a year and a half before we actually started getting cases where the sales people started taking us and putting us in front of the customer. But once the deal flow started it was a huge amount of business. You need to have stamina to last that long period.

Next you have to build trust with the sales folks, the technical folks etc. Not everyone will be happy to assist you. Not everyone will want to help you. In a lot of cases they may also see you as competition. In addition sometimes the sales people may want to get the deal at you expense, because they have their target to meet.

So as a rule of thumb look when you are looking at these companies, you need to consider what is their partner program. Are they focussed on building a partner ecosystem. If they are a partner focused company then they will have global policies on handling partner related issues and the chances of you getting short changed are reduced.

Third – the product or service of this company should actually sell in your market. To add to it the customer should be willing to take your add-on product or service with the main product. I have had many instances where the company we thought had a great product did not move in the Indian market at all.

Last but not the least you have to remember that they ( the elephant that you are wanting to align with ) are in it for their interests, not yours. So they will take decisions keeping that in mind. Sometimes those decisions will go against your interests. Nothing personal. You will just need to hop off this elephant onto another one.

Irrespective, the relationships you build with people based on the philosophy of giving first then expecting will help you a long way. Like if you feed the elephant before climbing its back, the elephant also takes care to ensure you have a safe ride.

Till next time then.

Carpe Diem!!!

Riding the elephant – using the power of relationships

Leverage, Marketing, Partners, Symbiotic relationship

I have always had the belief that when you are a small company, in the tech services market space, you don’t have the wherewithal to define the market, or challenge the incumbent with revolutionary new technology, then you need to use guerrilla tactics to get in front of the customers and get business.

When your company is small most big companies don’t want to deal with you, not because they have anything against you, but they just want to work with guys who are bigger and more stable. Big companies also have more inertia and no one wants to spend time trying to evaluate small companies.

One practice which I used very successfully over the years was to align with huge global behemoths in some specific niche product offering which they were either launching or were bringing new into the country. All these product companies have huge marketing budgets so they know how to get in front of the customer. That is your weakness. You are a small services company who can’t get in front of enough people.

So as an analogy, if you want to travel through the jungle on foot, you won’t last very long alive. But if you are sitting on an elephant, then where ever in the jungle the elephant goes, you can travel safely and enjoy the view. You however need to build a good relationship with the elephant to be able to ride on its back. in nature they call these as symbiotic relationships.

As I mentioned these global product companies have huge inertia, systems etc. which are a weakness for the sales person and marketing person at the local level to move the global organisation.

These are places where you can leverage on your being small. being a small company you can take decisions quickly, you can turn around solutions fast.

So you can offer these local sales people support interns of feet on the ground for technical support or do PoCs for them etc. There will be some people who you may find are selfish and take you for a ride. But in most cases the law of reciprocity – from Robert Cialdini’s Influence – comes in. Those sales people whom you help in winning the sale help take you in front of more customers. Obviously there are general ethics that you have to follow because partnerships take a long time to build.

Since these are global companies, you can also get references of other sales people and create your own network which can help you grow further. If the global company is growing with the product then you will have a long runway for your own growth using this methodology.

There is a downside to this method though. If the company decides to exit that line of business, then all the investments that you have made in terms of your technical manpower etc. go waste. So you need to find a way to utilise those assets while you are looking for then next global elephant on whose back you can ride into the next market.

Till next time then.

Carpe Diem!!!

Price versus value, cost versus value

differentiation, Marketing, Positioning, Product Management, Value, value proposition

This is a pertinent question in marketing or sales. I keep getting the statement – the price is too high – compared to what?

Does anyone going to a Ritz Carlton or a Four Season hotel say the price of the room is too high. Does anyone who is buying a Roll Royce or Lamborghini ever say the price is too high. For a lot of people the Mona Lisa is just another painting, but for a lot of others it could have huge value hence its kept under so much security unlike another painting in the Louvre museum.

I think its the marketing and sales teams’ responsibility to position the offering that they have, correctly. This does not mean that there won’t be competitive situations. Especially in technology marketing where the entry barriers are very low, the competition heats up very fast.

Even in technology companies though you will see that there are disruptors who come in and take away a large share of the market suddenly but companies like IBM , Oracle and others who continue working on giving more value to their customers and charging a distinct price differential.

The key point that needs to come out is Value. Like beauty lies in the eyes of the beholder, value is specific to the buyer. Unlike Gold which has a fixed value defined, most other things like houses, shares etc. all have relative value. For one person who is selling a share the value is less than the price he is selling it at, while the buyer is seeing more value than the price she is paying for it, hence she is buying it.

Similarly if the customer see the value that you offer for your product same as what someone else offers, then the only differential is price that the customer can work on.

One of the best ways to reduce the cost/price value argument is to educate the customer so she sees you as the authority on the subject. I have shared multiple posts on how education has eliminated the price discussion from the buyer’s mind altogether.

Other ways off course include things like the ecosystem – if you are part of a proprietary ecosystem than you have very little competition – IBM Mainframes , Apple and others have very strong ecosystems and the discussion on just price does not take place.

The key for any marketing or product management person is simple they have to be able to build the value of the product or service in the minds of the customer preferably through education. For the sales person its important to identify and understand the value that the customer is looking for before easing time on a deal.

As I said earlier “VALUE” lies in the mind of the person buying.

Till next time then.

Carpe Diem!!!