Archive for the ‘lead generation’ Category

So closing out this series of posts looking at differentiation in markets where technical standards have caused little technical difference between products, I’m going to look at standards bodies and technical education as a technique to create differentiation.

Preach the gospel – Educate

The first point to make is that in my experience products that have developed through the process of ratification of technical standards, first find an audience amongst the technical community.  This means that there is an opportunity, albeit with a finite window of opportunity, to become the first vendor to provide education together with access to evaluation software for these early technical evaluators.

I’ve had first hand experience of this early stage marketing exercise.  We fed the thirst for knowledge and the need for evaluation software (to mix metaphors) to build a loyal community of technical evaluators, developers and systems architects.  We were able to craft an image for the company as the developer-friendly standards implementer, the first company to turn to when wanting to understand how the standards should be interpreted and implemented.

Obviously at some point you have to turn this rather “altruistic” approach into a business that  licences software and keeping that audience with you as you do this is not easy.

“Work” the standards bodies

Another technique that can be exploited, although it needs significant “muscle” to be able to carry off, is that of leading that standards-bodies.  Again I’ve had experience of working for a relatively small vendor that was represented on standards-bodies where we came up against larger vendors.  These vendors were able to almost completely dictate the direction of the body through a mix of funding, bluff, bluster and threats.  It was an interesting process to observe and the outcome, whilst not being everything that larger vendor wanted to achieve, was that they were able to grab territory from other vendors on the committee.  If a camel is a horse designed by committee then all I can say is count the humps on the back of the standard when a large technology vendor charitably volunteers to donate 50 man years of code to “expedite” the adoption of the standard.

Time to abandon standards

Lastly, understanding at what point it is right to move on from the standards to create a “proprietary” offer is important.  This may not be a public admission that your product now features proprietary capabilities alongside the standards-based functionality, but the point will come when in order to take the product forward at the pace required standards become secondary.

Using this message of “We have used standards to get ourselves to this point but now we need to implement specific technology to deliver what the market really needs” can be powerful but is a double-edged sword.  Being seen to “abandon” standards in this way can have a very negative reaction.  Whilst this would typically only happen once the market has reached the later stages of maturity, the benefit to the vendor that can first differentiate with proprietary features whilst externally still being perceived to embrace the philosophy of standards is significant.

So if you can be seen as more devout than the other guys, and preach the standards gospel further afield than anyone else, you can grab a position in the market that other vendors will struggle to defend.

Danny Goodall

I’m carrying on this series of posts on how vendors can differentiate themselves in the market when technical standards have had the effect of removing significant functional difference between competitive products.

This time I’m going to look at partnering to create differentiation in your offer.  Whilst the product proposition will remain materially similar to that of the standards-driven competition, a proposition carved from the synergies of the product and a strategic partner can be beneficial.

Partnering – Other complimentary vendors

As I suggested in this post, broadening the product portfolio is one way to create differentiation.  Whilst this can be done through internal product development, it is also possible to broaden the product proposition through strategic partnerships.  Obviously there are some ground rules here.  Firstly the products must be complimentary in that they should not overlap functionally.  Secondly the resultant product set must take the vendor into new areas when compare to the competition.  Thirdly, the partner must not have the same resultant product set themselves or conflicts can occur.  Lastly, the resultant feature set must not be too much of a departure for your sales team to credibly take to market.  If, to sell the partner’s products would require your own sales team to take on skills that they don’t naturally posses, this can be counter productive.  All of these caveats notwithstanding, one shouldn’t underestimate the value of partnering for obfuscation.  i.e. you partner to achieve a tick in the box and to create differentiation with no real intention of selling the partner’s products.

Partnering – Professional services

Similar in concept to the ideas I discussed on methodologies, differentiation can be created around how you implement your technology within your customer’s organisation.  Third-party system integrators or boutique technical consultancies can add value and create differentiation in your offer.  If you are going to rely on a third party organisation to create differentiation like this. it is essential that the reputation of the third party is second to none and that they provide something that you alone cannot.  Perhaps access to a different audience strata or a reference customer base you don’t posses.  In addition you should be wary of laying yourself open to the challenge that your proposition is so different or complex that you require specialist third-party services to implement it.

Partner – Embed your technology

Finally, the ultimate differentiation through a third party is to embed your technology within a third-party’s product.  Not really differentiation as typically when this embedding is carried out your own proposition is actually hidden within that of the embedding vendor’s offering.  That said, I have had first hand experience of using embedding deals like as references to create differentiation.

The claim that “We’re the solution that is embedded in ACME Corp’s product” can have a significant positive impact on credibility.

I’ll close out this discussion in the next post when I look at the use of standards bodies and technical education for differentiation.

Danny Goodall

Part 4 – Broaden the Debate

I’m continuing this series of blogs here by looking at the techniques that software vendors can use to create the “illusion” of differentiation in markets where technical standards have led to little material product difference.

So moving on from my last blog where I looked at the way an organisation can differentiate based on the way that they sell, this entry will look at techniques to move the focus away from the technology and onto some other element of the proposition where real differentiation between vendors exists.

I should perhaps first acknowledge that achieving this sort of holistic approach to taking a proposition to market is not the work of moments.  It takes a committed and capable marketing machine to craft the story and then real focus to ensure that the entire organisation rallies behind the proposition as one.  Getting the prospect to evaluate the competition on your terms is the objective and only through consistent and disciplined messaging can that be accomplished.

But if you can pull this off, in my experience it is one of the most successful ways to move the debate away from a particular product or technology where little difference exist towards an holistic proposition where difference can be noted.

Synergies, other product lines and product stacks

The most obvious place to start, and if you’ve monitored the SOA infrastructure software space at all you’ll be familiar with this concept, is that of combining products or even building out complex stacks of products that together deliver synergistic benefit to the prospective customer. Whilst the capabilities of one product may be very similar to those of the competition, when combining those features with additional products the total is greater than the sum of the parts and is very different from the competition.

The idea goes something like “Well whilst our XYZ product might be based on the same set of standards as ACME corp’s, when combined with our ABC product line you can achieve these additional benefits that ACME cannot deliver”

Methodology or philosophy

Another technique I’ve seen work well is that of presenting the product as being as-is or even commodity and suggesting that the real value delivered comes from a specific way in which the product is implemented.  Professional services offerings often come into play here.  Taking the product and the services together, it is suggested, helps deliver benefits that the product alone cannot.  Again the implication is that whilst the competition might ape the features of the product, the methodology is borne out of a deeply philosophically differentiated approach.

Ensuring the competition is evaluated “properly”

Creating broader propositions as outlined above is actually not that difficult.  The key is ensuring that prospects are encouraged to evaluate the competition on your terms.  You want the prospect to be asking the competition if they have an implementation methodology or a complete product stack.  That doesn’t sound easy and in my experience it’s not as easy as it sounds!  But if you can force the market to value the elements of your proposition that are different from the competition then you’re half way to building a successful business.

Danny Goodall.

Continuing on from this blog entry, I’ve decided to create another mini series of blogs, this time looking at the difficulty of differentiation in markets where software standards have created homogeneity amongst the offerings of the protagonists.

So first a little bit of a history lesson…

I surfed the wave of middleware resurgence in the early stages of the new millennium and had great success marketing various technologies. Initially, working with some of the best people in the industry, I introduced SonicMQ to the world while at Sonic Software (now Progress Software).  This was a market proposition that was heavily based on standards. Well at least we made sure that the debate was about standards – JMS in this case.  My ex-colleague Dave Chappell was talking to developers all over the world and writing books that led the debate on JMS and other standards.  We de-positioned the competition as being complex and proprietary and we enjoyed great success. Obviously the competition reacted by introducing their own JMS-based products, a move which we expected but by then Sonic had introduced the Enterprise Service Bus (ESB) and had moved the debate on to standards that enabled a service oriented architecture (SOA).

All the while I was creating marketing programs that stressed Sonic’s commitment to standards and, by implication, I was de-positioning other vendors’ technologies as being the Devil’s spawn due to their reliance on proprietary features. “How,” we asked “would organisations ensure interoperability between their, and their trading partners’ infrastructures if they didn’t conform to the emerging standards?”

Sonic enjoyed great early market success with this strategy as did the other vendors in the JMS and related markets such as Fiorano, Cape Clear, PolarLake, et al.  These vendors punched above their weight and went into battle and won against some of the industry’s heavyweights.  All of this was made possible by their commitment to standards.  These companies existed because a) standards made it easier for them to build software and b) customers wanted to move away from vendors’ costly and proprietary solutions and ran with open arms to this new breed of standards-based middleware.

For a while the old school vendors held out.  Claiming that their incredibly feature-rich offerings justified their proprietary methods and high price tags because they could do more “stuff”.  But the slow move towards standards gathered pace and eventually turned into an avalanche as, helped by maturing software standards, first the least established proprietary vendors and then latterly the market leading EAI vendors validated the market by introducing their own standards-based products.  Sonic had won the battle.

But then the problems became obvious.  When your product is based around freely available specifications and built with the help of common libraries that are available to others, how can you differentiate when your competitors are using the same specifications and standards?  If the software must conform to these standards, differentiation, at least at the product level, becomes a challenge.

Obviously not all animals are equal so some degree of difference exist between standards-based products.  During customer evaluations these come to the surface.  In fact in the sales situation where prospects can be engaged in detailed discussions about a technology and the company that is behind it, it’s actually not too difficult to draw distinctions between different approaches.  But within the marketing organisation, where we’re tasked with creating a credible, unique space in our prospects’ minds by placing 130 words on a web site, how can you do this?

It’s not easy and there are no hard and fast rules or guarantees but I’ll take look at some of the techniques that can be used to achieve this in upcoming blogs.

Danny Goodall.

At the risk of sounding like I’m repeating myself, once again I’ve just got off the phone from a friend and ex-colleague. This is a different friend and a different conversation to my last blog entry, and this time he was looking to do me a favour rather than picking my brains for free.  Which was nice.

Anyway, after a while we got on to the subject of how sales of his organisation’s SOA, ESB and BPM offerings were going.  A mixed bag was his response.  “Where it’s good it’s very good and where it’s tough it’s very tough” was his view.

My mate is in sales looking after a geographic and industry-focused region for a large integration/SOA infrastructure software vendor.  One issue he has is how to take his products to market in a specific industry sector.  In this case energy and utilities.  His concern is differentiation.  As he put it to me “How do you compete when all of the other vendors can do what you can do?”.

It’s a good question and one that I touched on briefly in these hallowed pages earlier in the year.  It’s a phenomenon that I refer to as “standards-based marketing” – a tongue-in-cheek description of what happens to an organisation’s marketing efforts when they are taking technology to market that is driven and governed by technical standards.  Effectively as the market matures, so all vendors in the segment meet the standards which in turn means they can all do broadly the same things which makes being unique, from a marketing perspective, very difficult.

Or put another way, Goodall’s third law of competitive marketing states that:

“As the impact of software standards bodies in a market segment increases, the probability of nil vendor-to-vendor differentiation approaches one”

…or

“I’ve got generate leads and my marketing campaigns look like they could’ve been written about my competitors.”

Actually there is no Goodall’s third (or first or second for that matter) law of competitive marketing.  But it did make me think that I should spend some time in these pages addressing this area.  So over the next several blog postings I’m going to focus on some of the differentiation tactics I’ve seen and used to create that illusion of differentiation when in reality your competitors are in fact your evil identical twin.

Danny Goodall

I’ve just had a conversation with a friend, an ex-colleague who was picking my brains (for free I might add!) about what he could do to make his sales year look better.

I asked him how his product was positioned and where his focus was on the market. He told me, and in doing so mentioned 3 industries, 3 market categories and 4 sub market segments, 4 or 5 target audiences and a similar number of problems they address in each of the 3 industries. I told him that this isn’t a focus. It’s a hedging of bets. It’s a baiting of many hooks in the vain hope of landing at least one fish. My mate was embarrassed. He knows this himself.

Focus, especially in these tough times is an absolute necessity. If you can’t focus to the point of one or two key problems you solve, you can’t expect your prospects to work out what you do and what you could do for them, and don’t expect to be in business come the economic recovery.

And my mate’s company isn’t a small, inexperienced company lacking real marketing talent. On the contrary they have really good people. So how did they get themselves into this situation? The answer is that sales management, worried about the lack of leads and general interest in the product in the market had put pressure on the marketing organisation to “aim wider”, to target some of the areas the competition and other vendors in adjacent market segments were targeting.

The result? They were “targeting” everyone.

So it was the sales departments fault then? Well despite being a paid up member of the Marketing Protection League, I’m not going to endorse the marketing=good, sales=bad stereotype here. The marketing team was at fault. Sure the sales team were acting without a plan and not working from common sense, but that’s understandable.  Just as we’re led to believe that waterboarding can make you say and do things that you don’t really mean, so come the end of the quarter when the members of the sales team has to put various bits of their collective anatomy on the line, they will happily advocate changing strategy 7 times a day, 5 days a week.

So it’s up to the marketing team to lead the company through these crazy times. Understand your ideal client and what their problem is, understand the value you can provide them that will make them want to buy from you and understand why you’re different from the alternatives. Perhaps most importantly make every effort to gather intelligence that will tell you where your prospects are still spending money. Focus is what you need in these tough times.

Of course that is only half the story. Marketing can hand a map with clear directions to the rest of the organisation but it won’t stop them all heading off in different directions and ignoring the map. So that’s where the close relationship between sales management and the marketing team comes into its own. One plan executed with focus and passion by two teams acting as one.

Simple.  Well not really, but it’s not rocket science.

Danny Goodall

Q. What do the questions…

“How do porcupines make love?”

and

“How do you ’sell’ open source software?”

…have in common?

A. The answer to both is “Carefully!”

Software sales is a funny business.  Push too hard and you’re open to accusations of potentially ripping people off through aggressive tactics, don’t push hard enough and you end up having had many nice discussions (tea and biscuit meetings as they are known) with many nice people but your children go hungry.  It’s a balance.  And nowhere is this more in evidence than in the open source world.

I was chatting to an ex-colleague last week about the issues they have taking their open source software products to market.  I know that sounds like an oxymoron “taking open source to market” but there is usually a business model somewhere when commercial organisations put effort behind open source projects.  And so it is with my mate’s organisation.  They supply documentation, services and support in addition to taking the responsibility for ensuring the stability of releases of the open source projects that they are behind.  They allow organisations to see open source as a viable and low cost alternative to commercial-off-the-shelf software.  And by all accounts, despite what my colleague Steve Craggs said about open source adoption slowing in his 2009 predictions, their business is doing well.

Many commercial software organisations have invested in open source initiatives.  I’m not talking about the pure-play open source vendors such as JBOSS, Apache, Red Hat or MuleSource, but rather commercial-off-the-shelf software vendors who have put their “support” behind open source initiatives. They donate code, they place key people onto committees, they even open up divisions of their own commercial organisations dedicated to providing commercial support services.

In doing this, you have to wonder at their motives.  I mean, if their open source initiative is wildly successful does that spell the end for their commercial products?  Is it a hedging strategy?  An obfuscation strategy?  An intelligence gathering strategy?  Either way they can’t afford to run these efforts at a loss for too long, but neither can they bring their usual commercial sales and marketing tactics into play.  Open source market dynamics are very different.

Open source economics rely on getting “market” reach, having the best community/product, attracting a volume of users and therefore achieving critical mass.  Open source projects that achieve these things in their particular software segment are likely to find their software in use within end-user enterprises and can then expect these companies to require services.  And hence a market for support services around the open source project is born.  It happens almost by osmosis.  As a result, being first and biggest in open source matters more than it does in the commercial-off-the-shelf world.

The issues for those second movers in open source markets who can’t rely on the critical mass in open source are many and varied:

• How do you force the sale?
• How do thy get new users?
• How do they move on from evaluation of the software to generating revenue?
• How do they promote the commercial offer behind the open source project?
• How do they sell?

The dilemma for second movers in an open source market is that open source communities can’t be built to order.  They can’t be pulled together solely by the actions of a commercial entity.  Sure they can be encouraged and all the right ingredients can be put in place.  But open source is about the community working for the good of the community and is not about hard sell.  Selling to open source communities is seen as a no-no.  Open source is “free” software.  There is no selling to be done.  Like worker bees in a hive or ants in a mound, the community en mass decides to use the software, or not.

So all open source vendors can do is put passive offers to deliver services out there in the hope that the community reaches a critical mass and the need for these services occurs.  “Build it and they will come”  It’s a little bit like a shy teenage boy that goes to stand close to a girl, but stops short of asking her for a date.  If you don’t ask you don’t get.

Whilst this approach is earnest and admirable, it doesn’t help to drive sales.  And if you represent a commercial vendor who has sales expectations from the services you wrap around open source projects, then you will be judged on your quarterly performance and not how earnest you may or may not be.

My question however is what is wrong with making statements about the value you can provide the open source world, and for asking for money for that?

If you’ believe that you’ve got a valid commercial offer that delivers value, then why not shout about this and ask for money for it?

In the coming months, we’re going to track a few open source project “vendors” with our REPAMA Methdology to take a look at how they tackle some of these problems.  I’ll report back some of our findings.

Danny Goodall.

It’s an easy question isn’t it?  But its one that in my experience is so often misinterpreted or wrongly answered by high-tech software vendors through their web sites, marketing materials and meetings with prospects.

When a prospect poses that question of a software vendor, what are they looking to understand?  The answer is that they actually want to know what you can do for them.  They want to quickly envisage what will be left behind after they have bought software from you.

So an answer like:

“ACME provides KJ8 compliant infrastructure that is compatible with the latest WP* series of standards”

…does not really answer the question “What does ACME Corp do?”.

Consider the situation when a sales representative from a high-tech company engages a prospect in conversation and the prospects asks the question:

“…so what does ACME do”?

Behind that questions is the implication that the prospect wants to know what ACME Corp. could do for him.  But instead of providing that information, I’ll wager that the sales rep will list a series of facts about ACME Corp.  He’ll start by telling the prospect the name of the company, the product name, the product category and he may also go on to describe some of the features of the product.  Like this.

“ACME Corp has recently introduced our DooperSuper product which is an advanced enterprise capability product that features support for the KJ8 standard”.

This is wrong.

Well it’s not wrong, but it’s the wrong time to provide this detail.  Remember the context of the question is that the prospect is thinking “What will this do for me?”, “What would I be left with if I were to become a customer of ACME Corp.?”.  An answer like the following would be more suitable:

“ACME Corp. helps our customers to reduce their data centre capital and energy costs”

This immediately tells the prospect what they would be left with if they were to become a customer of ACME Corp. and, if they’re interested, they can follow-up by asking for more detail.

So the question remains.  Why do so many high-tech vendors not lead with such a value proposition in their marketing communications?  The answer I think is two-fold.  Firstly, I think then many early marketing high-tech vendors have a very technical audience which means they feel that they should lead with some technical facts rather than translate this to a value statement.  This is naive because even the technical audience wants to know what they would get if they were to become a customer.

Secondly, many vendors do not understand the value that they can provide.  They’ve never documented the business value enjoyed by their customers.

So here are a few lessons for high-tech vendors:

1. Review your current customer successes
2. Look for a patten of the benefit or value that you’ve delivered
3. Adjust and tier your prospect communication.
   1. Lead with what your prospects will be left with – what will persist after the sale has been made.
   2. Add supporting technical detail where relevant.
4. Train the sales force to engage prospects in the same way

Danny Goodall.

I’ve been scanning other marketing blogs recently, attempting to get a feel for what other folks are doing out there at the moment.  I see lots of advice on creating strategies to generate leads through social media and the creation of networks.  Whilst I wholeheartedly support any efforts to get closer to prospects by creating communities and networks, that alone will not cut it when IT spend is under such close scrutiny.

Imagine this situation.

You’re a senior manager in an IT division of a large corporation who is tasked with delivering more than you did last year with less resources than you previously had.  You’re technically very savvy and when a software vendor proposes new technology you quickly “get” the technical proposition and you are equally able to project the potential benefit to the business that the technology can provide.  However, you also know that there is a draconian spending policy in place at the moment.  A policy that says that no matter what potential justification or pay back or total cost of ownership evidence is presented, you are not able to spend a penny.  So does this mean that you’re not able to spend any money this month/quarter/year?  No it doesn’t.  There are a small number of projects that are allowed to go before the spending “committee”.  These are the projects that are imperative to the business – the funded initiatives.

So the question for the vendors out there looking to generate leads is

“What are the funded initiatives for my prospects?”

This situation came to light recently when looking at the results of a REPAMA study on the value proposition of 3 vendors in the high performance messaging market.  Whilst 2 of the vendors were fundamentally taking the same value propositions to market, the other vendor was the only one to talk about a specific value proposition around risk mitigation.  This risk proposition wasn’t one I would usually associate with high performance messaging and I couldn’t reconcile the difference.  I discussed this with my colleague Steve Craggs and it was Steve that pointed out that the vendor was focussing on this area because in a slowdown specific types of projects are still funded.  A smart move.

I recently did some work for a cloud computing/application virtualisation/DASM vendor and I have to give credit to them for understanding the above principle very clearly.  Right at the heart of their marketing planning was the question:

“In what areas are our prospects actually spending money?”

This resulted in a short list of project types where prospects were spending money and this list defined their entire go-to-market approach.  The logic is simple.  If a prospect isn’t able to spend money, no matter how convincing the argument or relevant the technology, then there is little point in going through the motions of a sales process only to bravely lose the battle when you ask for the money.

There is no news here.  It has always been this way, but the economic slowdown will bring this into sharper relief.  So here are 7 steps to follow for lead generation in a slowdown.

1. Understand what the competition is doing
2. Understand your own capabilities and how you are different from the competition (*and change your positioning and messaging if required)
3. Understand where your prospects are still willing to spend money – the funded initiatives
4. Understand what pain is causing the prospect to still spend money – what are they looking to achieve?
5. Create messaging by mapping your own capabilities and differentiation, to the prospect’s pains and their willingness to spend
6. Retrain the sales force with the new focus/messaging
7. Use the right medium to get your proposition in front of the right person in the right organisations

This is marketing 101 but it’s worth restating because as I examine vendors’ marketing strategies I see them doing the same things that they’ve always done and I see little real differentiation.  And paraphrasing that wise old maxim, if you do what you’ve always done, don’t expect to get different results.

Danny Goodall

I was discussing the economic slowdown with some friends over the weekend.  We were trying to predict the likely depth, length and impact but we came to the conclusion that logic and a sound understanding of economics alone couldn’t help.  You’d need to apply complex chaos psychology first.  The issue, we realised, is that whilst people anxiously focus on the harsher trading conditions, we’re not focusing on the positives – the things that will bring us out the other side.

I’m not going to suggest that all we need to do is shut our eyes and wish it away but if we stop anxiously focusing on the negatives, we can turn a bad situation into a better one.  That said, I do recognise that it would be churlish to suggest to someone that has just lost their job that they should simply look on the bright side of life.  But someone’s loss has to be someone else’s gain – even if they were previously on the losing side.  It’s the way of things.

I believe that in enterprise software sales, generating interest is going to be tough for a little while yet.  But it is at precisely this time that market dynamics can be completely turned on their head.  The share of voice and vendor pecking order that “naturally” exists in a given segment can be completely, positively turned around when our staunchest competitors are focusing on the problem and not the opportunity created.

And as it is such a precious commodity, once we have generated a sales lead and it is handed over to the lead maturation process and ultimately the sales team, we better be completely sure that a) we’re saying the right things when we’re on our feet in front of the client and b) we know what the competition will be saying. This means laying traps for the competition, focusing on the things you do well and providing proof of the claims you make.

I think long-time marketing guru Seth Godin has captured it well when he talks about focusing on the wrong boxes.  And I think that the NLP fans out there would refer to the need for positive perceptual filters.  Either way I think it’s time to stop focusing on the red box and pay some attention to the others.

Danny Goodall