Entering a new technology based B2B business – Part IV

B2B, differentiation, Marketing, niche, segmentation, Technology

Identifying the addressable market

In marketing there is a statement that is thrown around a lot – “find a niche in the market”

This is a very powerful statement. It clearly helps to identify a piece of the market , that you can “own”, if you are successful. It’s always better to own a small pond than to be a small fish in the ocean. Even P&G which has multiple billion dollar brands in its stable, has clearly identified niches for each of its products. So the statement is absolutely current.

I will just like to put a small caveat to the statement and make the statement read – Find a niche in the market and also find if there is a market in the niche.

Let me explain this with a real life experience. When I had just joined a company, fresh out of University, I was given a product which was basically about selling process control equipment . It was a very sophisticated product for its time. We created a solution using this product which we executed on a couple of sugar plants, very successfully. So I was given the responsibility to go out in my territory and target all the sugar plants and sell this solution, because we had found a “niche” in the market, which others were not targeting.

The solution which we had executed, was done on a very large sugar plant, while most of the sugar plants in my territory were small capacity plants. In addition these plants didn’t even have electric panels in the boiler room, so how would they even install such a sophisticated process control equipment. (This led me to create a Maxim for myself – if there’s no road in the town that you are going to sell, you don’t try to sell a luxury car.)

Coming back to the topic at hand – what I realised was that we had a niche in the market which none of the other process control companies, at that time, were targeting, but the market was just made up of 10 odd companies that we could sell to. No one else could afford us. So eventually we wasted a lot of energy and eventually got out of the market.

So now whenever we talk about identifying a niche in the market- in which we want to target our product or service – I want to always check how much is the addressable market. Combined with the questions that I raised in the first 3 parts of this series, if you don’t find an answer to this question correctly then you will waste a lot of time and money.

In the technology based businesses, especially if you are getting in a new technology, you also need to identify if there are enough companies who are using the earlier version of the technology or if there’s requisite infrastructure to incorporate your new technology. To give an example of this, if you are bringing in a SaaS product, one of the pertinent things to check out is – do they get enough network bandwidth across all their offices, so that they can utilise a SaaS based model. If you are trying to sell this product where network bandwidth infrastructure itself doesn’t exist, then even if you have identified a niche in the market for your SaaS product, you won’t be able to succeed because there aren’t enough companies who have the bandwidth to utilise the product.

This is a critical piece in planning your marketing activities. Let me know how you go about identifying the addressable market.

Till next time then.

Carpe Diem!!!

P.S: In case you would like to get my checklist for launching a new technology based product or service in the B2B market, drop me a message.

Entering into a new technology based B2B business – Part 3

B2B, Marketing, Technology

In this, third part of my checklist, for launching a Technology based B2B business – we will look at figuring out how is the customer presently solving the problem. If you are reading my blog for the first time, I would suggest , you read Part 1 of the checklist and Part 2 of the checklist to get a better picture of the process.

That will give you a background to my thinking process and see whether it resonates with your thinking.

Companies find solutions to the problems they are facing. So even though you may have a unique product/service, they may not find it useful, if they are already solving the problem in a different way. It may not be the most elegant, it may not be the most efficient, but nonetheless it is still solving the problem for them.

Knowing this is important because as Perry Marshall says – if its not a “bleeding neck” problem, people will not move to solve it.

In a B2B scenario, this is all the more important, because there is an inherent inertia in the case of B2B. This could be because of the fact that the person responsible does not have the “power” within the organisation, or it could be because she has been given other priorities by her boss and she is trying to close those first or a plethora of hundred other things.

Another issue for the inertia , is the allocation of budgets in B2B. Most companies work on a budget which gets decided at the beginning of the financial year. Generally new things are not incorporated into the budget in the middle of the year, until and unless it’s critical.

So let’s assume that you have understood the “how” the person is solving the problem. You now need to figure out if your solution will give them incremental improvement over the existing solution or will it be dramatic.

If your solution is just incrementally better, the next issue is to figure out the amount of disruption your solution will cause to the existing process and the cost of your solution. If the improvement is incremental and the disruption is large and the cost is also considerable (relatively) then the chances of you being able to sell your solution are very limited because of the lethargy I listed above.

On the other end of the spectrum, if the solution can cause dramatic improvement in the way the problem is getting solved and the disruption to the existing process is also not much, then you may get some early adopters. If you succeed with the initial prospects then you can document the success and take it to others.

There can be many ways to skin a cat, I have shared mine above. Test it in your environment and if you think it suits you, please go ahead and use it. If you succeed, I would be glad to hear about it.

Till next time then.

Carpe Diem!!!

P.S: If any of you , is however interested in receiving my 12 point checklist right now , to help you plan your marketing strategy for a new launch, just message me with your email id and I will send it out to you.

Entering into a new technology based B2B business – Part 2

Assumptions, B2B, Business, Marketing, Marketing Stamina

In my last post we focussed on identifying the problem from the perspective of the customer, that you intend to solve with your new technology enabled solution. If you would like a refresh, you can read that blog post here

In this post we will look at the second part of my checklist which is identifying if the problem was unique to that one customer or do you see it happening with other people in that industry or in that geography.

Sometimes it is easy to get confused between looking at a tree and assuming that the whole forest will be made of only those type of trees. It used to happen to me very often during my younger days. These days though, I try to ensure that I don’t succumb to this folly.

So while you are interacting with your first customer on the solution, you need to in parallel, check out all the similar type of customers in your area / industry and see if they also face the same problem.

If we were to take the same example of automating the invoice reading process, that we covered in the last blog post, the problem from the customer’s perspective was – the long line of trucks waiting at the gate.

Now you may go to other similar customers and check if they also face the same problem of a long line of trucks standing at the gate to make an entry. When you meet them, or message them, you realise that this problem doesn’t resonate with them. This is the time when you need to figure out if you have defined the “similar” correctly.

It’s quite possible that the first customer, who had this problem, could be having it because they don’t have open land near their factory, so their trucks have to occupy the road. The other customers may have the land and therefore their trucks come inside and wait so they don’t see it as such a big issue.

If that be the case, maybe you will need to decide that your similar set of customers should also have an attribute which mentions the size of the waiting area for incoming trucks. If there aren’t enough such companies, then you will need to reevaluate your hypothesis and market definition and rework all the economics of your market entry.

If you don’t do this, you will end up wasting a lot of time and money trying to break into the market. Both of these resources are scarce, so its a good idea to do this exercise as early as possible.

Next time I will take up the third item in my checklist

Till next time then.

Carpe Diem!!!

Success is a proportion of Failure(experience)

experiences, Sales

In April my team had planned an event in which we were to get about 20 odd people, into a conference room, showcase some of our products/services and have dinner and cocktails. Suddenly about an hour before the start of the event we started having rain. Typically when it starts raining in Delhi, the traffic almost comes to a standstill. Soon we realised, where we were expecting 20 odd people only 3 came. The event was a big flop show.

Now we could look at this as a failure of my team and the marketing agency we had engaged, for doing the event, because they were supposed to ensure the attendance of people in the event. We were dejected but that is the way life is – you never know when it will “rain on your parade”.

Similarly one of my sales team members had all his sales numbers structured with one customer primarily. Now unfortunately, last year, this customer did not have a very good year for closing of deals for themselves and hence they were not able to outsource business to us. But this year, after all the losses this person had last year, he seems to be on “boom time”

Life is a long game and you have to play it in such a manner. In most cases, in this long game, you will lose more often that you will win. That’s what makes winning pleasurable. The key is to play enough games. Lose them, learn from them – gain experience and move on to the Next game. If you keep brooding on your failures, you will never be able to succeed. Once you learn from the failure, you will keep eliminating all those points which could cause something to fail. That is what experience is all about. Being prepared to ensure that the same points don’t cause a failure again.

Success in my view is a proportion of the total games played and the number of failures (experiences) had. I do feel bad on losing a deal , but I also immediately get ready to look at the next deal to close. If you are leading a sales team, the biggest worry you need to have is the number of deals that you are fighting for – not the deals you have lost.

If the number is large, then there is absolutely no way that you can’t win in the long term. However if you don’t have enough (enough is a subjective term but you should at least have 4 proposals to crack one deal on average) proposals going out on a regular basis (especially if you are in B2B) then you can rest assured there is no magic that will take place to get you to achieve your numbers.

This doesn’t mean that you don’t need to learn and get better, the more you learn from your experiences and the more you take coaching the better you can get so that you can raise the amount (revenue realisation by being able to sale either more quantity or higher value items) of business you get for the same number of proposals given.

So go out, meet prospects, give enough proposals, if things don’t work out, learn from them and. then move on to the Next.

Till next time then.

Carpe Diem!!!