Maidsfield Blog - Partnering and Business Development

It’s a story we hear many times. Technology has being developed because it’s technically ahead of what is being done elsewhere. Then comes the challenge of finding what market it fits into and what possible business needs it can solve. How do we commercialise this technology?

This is also typical of college research projects. The focus is more on making the technology better and not on providing a better solution for a defined market need. There is always room blue-sky or basic research but it always helps to have some awareness on where it can link to market needs.

The search, identification and the resulting commercial alignment effort can produce many potential commercial paths which may or may not include the initial vision of the project. This often results in wasted time and money unless the possible commercialisation paths are identified early in the project so as to adjust the project direction appropriately.

From a commercial point of view, how do you make a success of this project? How do we commercialise this technology research project? Some thoughts that may help:

1) Is there an immediate market for your technology?

a) Who will buy and why? How many and how much?
If it is clear that there is an immediate market for the project’s resulting technology, then it should be easy to answer;
- who exactly will be interested in this technology?
- why will they buy it right now so that it is an immediate value to them?
- how much will they pay and how do you justify the value proposition?
- how many such opportunities are you likely to win in the market against the competition?

b) Is it a product, technology or IP?
If you have a patent and a prototype, then this may only count as IP (Intellectual Property) as the technology may need to be completely redeveloped to suit the licensee’s purpose.

2. If there is no obvious immediate market then ask; What was the Vision of the future in conceiving the project?
a) In what future does the technology fit?
Describe how the market would use your technology and how things will be done

b) Why will people use it?
Understand why your technology will be used ahead of other ways of doing the same things.

c) Who will you be competing with in this future?
In this future what or who are the likely competitors of your technology?

d) Are those competitors here today?
Do these competitors exist in the market today and why are they not doing what you’re doing? Is it in their development roadmap?

e) Could you help these competitors meet this vision?
Rather than waiting the 5 years or so to compete with the current market leaders, could you help them realise this future vision with your technology. This would likely make a great partnership of their market presence and your technology.

3. To evaluate further, what are the components or layers of your technology?
The secret value may be in a sub-part of the overall project. As we see sometimes, we may build terrible cars but fabulous engines. What are the fabulous engines in your project?

a) Review each component for all its possible Uses or Applications

b) Review the market opportunity for each Use or Application

Commercialisation of technology research is never straight forward but the rewards maybe in the hidden value and that there are many opportunities in licensing your technology by analysing it a little differently.

Once you have identified the a market, then comes the search for the technology or commercialisation partner.

Over the past week in meeting almost 90 business people in events with Niall Devitt of Beyond the Boardroom and David Brock of Partners in Excllence at 4 different events and hearing some great stories, the question of combining strategies of Direct Sales and Partners Channels Sales came up a number of times.

The story goes as follows:

A company builds up its business with an effective international direct sales organisation targeting their primary markets in a very focussed manner. Secondary market opportunities are presented to the company but the organisation is not structured to sell or deliver outside their primary markets and thus the opportunity is not responded to. The direct sales focus on the primary market is essential but it leaves the secondary market untapped.

The business has the opportunity to established sales-side partnerships to sell and deliver into their secondary markets.

Your Secondary Markets could be defined as:
1) Alternative geographical regions that are outside your primary focus. Western culture or English speaking markets may be your primary market, then gaining access to non-English speaking regions is typically executed through corporate partners.
2) Alternative industry sectors for existing product outside your primary sectors. You likely do not know your secondary sector markets as well as your primary markets. It may be more effective for your company to focus on partnering into these sectors than to distract your primary direct sales teams in building up expertise in a new sector.
3) Alternative uses of your technology into different types of customers. Some of your technogy may be applied to solve different business needs targeting buyers outside your current industry or current target customers.

While your organisation stays focussed on its primary strategy consider establishing a secondary strategy to tackle secondary markets through partnerships, whether OEM, Strategic Partnerships or System Integrator reseller partnerships.

See two past blog posts on “Why Good Strategic Partner Fit is Imperative - Part 1″ and “Why Good Strategic Partner Fit is Imperative - Part 2″.

Far too many companies accept the partners that come to them, because “we have nothing to lose, we’re not represented in that market, so if they sell we’re better off”. But with a small bit of planning and effort you can proactively approach the market, region or sector, to meet your business objectives and not simply respond to someone else’s possible once-off sales opportunities.

In gaining an understanding of whether a partner will deliver on your joint objectives, there is much you can tell in reviewing what they say about themselves, by reviewing their websites and various promotional materials. If you want to spend time working with the right partners you need to spend time finding the right partners.

In evaluating Prospective Partner companies you can review their websites and public materials to understand whether you want to speak to them to further qualify the prospect and thus decide who you can possibly work with. All 7 criteria don’t need to be perfect, they merely need to be considered in making your decision and how strategically and operationally challenges can be addressed. The 7 criteria are inter-related, like many things in a business. It is worth looking at the company from different points of view including who else they’re partnering with. Consider the adage, “if you want to know me, meet my friends”.
The 7 Criteria for Best-Fit Partner Analysis is linked to the alignment of the following (and Gut Instinct):

1) Business Model
I wrote a previous post on the challenges in partnering a SaaS business. If your company has a SaaS model and your prospective partner typically sells perpetual licences then this presents an immediate clash in charge models and sales incentives. If sales persons in the partner company get their commission when the customer pays, how long will they be waiting for the money in a SaaS model as opposed to a big initial licence fee sale. Businesses have found some solutions to this challenge and SaaS businesses are changing their approach to address.

2) Sales Models & Marketing Approach
How do you prospective partners sell their sales? What is their marketing and sales process and how can you fit into this? Do they focus heavy on marketing and lead generation and the sales follow ups OR do they know exactly who they want to speak to and focus more on the sales process? Neither is wrong, but if your company has a similar approach it makes it easier to work together and build relevant relations all along the customer journey. Other things to consider, are your prospective partners:

• Cost or Efficiency Driven Sale or Revenue Growth Driven Sale or Risk Protection Driven Sale
• Consulting Led Sales or Product Led Sales
• Thought Leadership or Direct Contact Sales
• High Profile or Under-the-Radar
• Pioneering Market (Missionary Selling) or Existing Established Market

3) Pricing Strategies
Do they adopt a premium market or higher volume lower cost approach? Where do you fit into this? I’ve seen companies increase the rates by partnering up market a little, thus increasing the ‘batting level’, credibility and thus move them up the value chain. You need to decide what your company wants.
4) Implementation & Solution Deployment
For example, System Integrators revenues are service days, licences and annual support & maintenance. If you have a minimum deployment cost, whether on-premise or Web deployed, it is less attractive to a System Integrator. In fact you may be competing directly with them. Understand what other software partners your prospective partners have and what type of deployments they have. Is the solution type Enterprise Solutions/SME deployed and is it Server Side Solution / Client Side Solution?

5) Growth Strategies
Review the prospective partners’ growth plans. This can be easier if they’re publicly quoted companies, as long as the division you want to partner with features separately in their shareholder communications. Are they in a Narrow Global Market that fits your business or are they very broad in Wide Regional Markets? How might this reflect your business approach? Do they have a large direct sales force or do they sell through partner channels? If they have a direct sales focus you are obviously closer to the customer than them operating through sales channels, thus faster potential revenues. Although if they have effective partner channels and your products fit well, their longer term upside could be significant.
6) Organisational Culture
Cultural differences are often cited as the reason 50% of failures in company mergers and the greatest difficulty in acquisitions and joint ventures. Some examples are, are they?

• Team Driven and Shared Leadership / Command and Control
• Aggressive Growth and High Performance / Cautious Growth
• Strongly Sales Driven / Strongly Delivery Driven / Strongly Product Driven

7) Business Objectives
Do their stated business objectives align with your objectives for the partnership? If you’re in a hurry, as most growing businesses are, do they show or state:

• Fast Revenue Growth / Cautious Cost-Effective Growth
• High-Profile Building Potential / Purely Revenue Driven
• Seeking 5 year Exit / Seeking Profitability

THEN Gut Instinct. If you know about technology businesses you can read between the lines to gain an understanding of their business reasonably quickly and make assumptions to be later verified. Keep in mind where their market is going and try to read into their reactions to possible market changes.

The 7 Best-Fit criteria don’t have to fit perfectly, but keep them in mind and use them as a framework. An effective partner relationship is all about people and how well the parties commit to overcoming the challenges as the gains greatly outweigh the pains.

Based on the interest in our morning event, we have decided to run the event again in the afternoon of Tuesday 29th. 

Internationalisation is the biggest single challenge facing the Irish Tech Sector today. Having ambition in Ireland, means you’re looking international quickly. Irish Tech companies almost immediately face great challenges to make their business successful.

On Tuesday the 29th of September 2009, between 2:30pm to 6:30pm at the Hampton hotel in Donnybrook, Dublin 4, we invite CEO s of Irish Technology Companies to join us - Register Today, limited to 30 attendees.

The event will present talks from leading International and Irish experts, case studies from successful indigenous Irish Technology companies, and an opportunity to discuss the challenges and pitfalls of the International business landscape with your peers.

On the back of their recent partnership announcement Donagh Kiernan of Maidsfield Associates, Niall Devitt of Beyond the Boardroom and David Brock from Los Angeles based Partners In EXCELLENCE, will present and discuss how Irish technology companies can to succeed in international markets.

The Partners In EXCELLENCE, Beyond the Boardroom and Maidsfield Associates Strategic Partnership’s focus is to help Irish Technology companies accelerate the results they achieve through their Internationalisation efforts. The partnership brings together experience and track record in helping companies successfully expand globally. Leveraging the capabilities to access new regions, markets, develop new channels and alliances; this partnership will help Irish Technologies improve the results they achieve in competing in a global market.

Whether your organisation is seeking to go international or already trading abroad the internationalisation partnership can assist you to ensure you achieve the highest levels of performance and the best results possible.

Together, Maidsfield Associates, Beyond the Boardroom and Partners In EXCELLENCE have helped Irish and other organisations achieve tremendous results in Internationalising. Organisations like Qumas, InnerWorkings, Decare Systems Ireland, Helix Health, Dolphin Software, Enterprise Ireland, IBM, HP, Canon, Motorola, Ericsson, Dassault Systemes, NCR, and others.

Timetable

14:30 Arrive, Coffee and Registration
15:00 Welcome and Introduction - Donagh Kiernan & Niall Devitt
15:10 Corporate Partnering into Markets - Donagh Kiernan
15:50 Hi Tech Globalisation Options - David Brock
16:30 Internationalisation Workshop - facilitated by Niall Devitt
Breaking into roundtables / groups and discussing internationalisation challenges and potential solutions
17:50 Coffee and Networking
18:30 Close

Attendees are limited to 30 - register today

I had a meeting this week with one of my client companies who are at the leading edge of the industry with their expertise and technology. They really have a tremendous market opportunity. Talking to the board members and key individuals of this small innovative company led to addressing the question:

“How we best capitalise on this international market opportunity in the marketplace?”

“We can target the market directly and talk to 30 of the relevant companies. This will definitely produce more than enough consultancy and follow on technology sales to establish us in this space.”

“The downside to this is that once we get into delivery mode it will tie up the key people very quickly and it’s hard to keep selling to continue to grow and we really only have a limited window of opportunity here”

My thoughts: “sell direct, but include securing strategic partners in your sales process.”

Then “If we can sell direct, why should we consider selling through strategic partnerships?”

How about the following reasons for selling through corporate partners:

1. The offering is defined and easy to explain. The benefits can be communicated easily. Partners will understand quickly and see the opportunity quickly.
2. Reduce Cost of Sales - You could partner with organisations who have strong commercial relationships with your target clients. They can get you straight in the door on a commercial basis, thus greatly speeding up the sales process.
3. Focus on Your Strengths - You have a limited window of opportunity before other organisations establish themselves and take over your opportunities, so there is an element of land-grab working with your selected leading organisations. They may deliver the bulk of the services, but at least you can sell the premium services and grow your team accordingly and sell software licences also.
4. Access to larger sales force - Partners will present and sell your offering in their market far faster than you can. They are more established and in the market sector and/or region you want to be in.
5. Access to broader market - You can’t be everywhere at once, but you can build up a partner network to get you into key sectors and regions.
6. Increase revenue sources – you cannot have the full pie from each customer, but should target to have a more premium piece of the pie from many customers
7. Increase licence revenue growth – increased number of consulting customers brings more software licence revenue opportunities
8. Increase shareholder value – a wider spread customer base means a more stable business and growth path, thus increased business potential and increased shareholder value.

Besides, if the company’s strength is not in sales, why not let other people sell what we do. We can always sell direct as well.

Donagh Kiernan, Maidsfield Associates

Internationalisation is the biggest single challenge facing the Irish Tech Sector today. Having ambition in Ireland, means you’re looking international quickly. Irish Tech companies almost immediately face great challenges to make their business successful.

On Tuesday the 29th of September 2009, between 10am to 2pm at the Hampton hotel in Donnybrook, Dublin 4, we invite CEO s of Irish Technology Companies to join us - Register Today, limited to 30 attendees.

The event will present talks from leading International and Irish experts, case studies from successful indigenous Irish Technology companies, and an opportunity to discuss the challenges and pitfalls of the International business landscape with your peers.

On the back of their recent partnership announcement Donagh Kiernan of Maidsfield Associates, Niall Devitt of Beyond the Boardroom and David Brock from Los Angeles based Partners In EXCELLENCE along with guest Kevin O’Leary CEO of Qumas, the internationally successful Irish software company, will present and discuss how Irish technology companies can to succeed in international markets.

The Partners In EXCELLENCE, Beyond the Boardroom and Maidsfield Associates Strategic Partnership’s focus is to help Irish Technology companies accelerate the results they achieve through their Internationalisation efforts. The partnership brings together experience and track record in helping companies successfully expand globally. Leveraging the capabilities to access new regions, markets, develop new channels and alliances; this partnership will help Irish Technologies improve the results they achieve in competing in a global market.

Whether your organisation is seeking to go international or already trading abroad the internationalisation partnership can assist you to ensure you achieve the highest levels of performance and the best results possible.

Together, Maidsfield Associates, Beyond the Boardroom and Partners In EXCELLENCE have helped Irish and other organisations achieve tremendous results in Internationalising. Organisations like Qumas, InnerWorkings, Decare Systems Ireland, Helix Health, Dolphin Software, Enterprise Ireland, IBM, HP, Canon, Motorola, Ericsson, Dassault Systemes, NCR, and others.

Timetable

10:00 Arrive, Coffee and Registration
10:30 Welcome and Introduction - Donagh Kiernan & Niall Devitt
10:40 Corporate Partnering into Markets - Donagh Kiernan
Guest: Kevin O’Leary, CEO Qumas
11:20 Hi Tech Globalisation Options - David Brock
11:50 Internationalisation Workshop - facilitated by Niall Devitt
Breaking into roundtables / groups and discussing internationalisation challenges and potential solutions
13:10 Lunch and Networking
14:00 Close

Attendees are limited to 30 - register today

The bottom line in all things business, is delivering effectively, delivering and exceeding the ultimate customers’ expectations. Learning what works can be highly expensive when we have to backtrack and go again in a different route. Strategic Partnerships can deliver great success when it works, it can be enormously frustrating, disappointing and expensive when it doesn’t.

A key part of what we do in Maidsfield Associates is to focus on matching our clients’ business objectives to suitable partners in the chosen target markets. As defined in Maidsfield’s Corporate Partnering Process we review seven criteria in evaluating partner-fit and develop an understanding of the potential partners business to see how they could work together with our client to meet the market opportunities.

So many Strategic Partnerships fail because of the most obvious of reasons, in hindsight:

1. The partner’s sales people sold their own product before yours, because it was easier to sell, they met their targets easier and made more commissions not focussing on selling your product.

2. The partner company’s management hadn’t taken on board the full opportunity to grow a new business area and wasn’t fully committed. Things slowly died away and eventually people faced reality.

3. The partnering plan didn’t go much further than a good idea and good story press release. It helped the profile of your business in your existing proven markets and possibly your investors but it didn’t produce revenue.

4. Your partnership was based on an initial opportunity identified by the partner, and that’s great, but it was not their core business area and they simple seized an opportunity that presented itself. They were ill equipped or not interested in pushing further. So be aware of your investment time in once-off opportunities with partner companies that approach you.

5. There was too much effort in getting the partner up to speed in selling your solution and their expectations of your pre-sales department were excessive. They probably wanted you to do all the work and they get the sale. They weren’t doing their share. You expected them to start selling immediately and transfer the cash to you on a monthly basis. The expectations on both sides were just not right from the start.

The real cost in getting it wrong is opportunity cost. Basically the lost time and opportunities in the time spent working on something that doesn’t produce. You need to gain an understanding of the target market through a “Market EcoSystem and Trends” summary analysis, identify your potentials, rank your targets, make your decisions and then follow up.

Watch out for part 2 with what it means to get Strategic Partnerships right.

What type of partnerships suit a Software-as-a-Service (SaaS) business?

End-users would always love to pay on a drip-feed-as-value-gained basis. It eliminates risk and spreads much of the costs over the value period. SaaS preaches this message. There are many advantages to SaaS businesses, but years on we’re still learning to balance the business’ cash requirements and customer charge models. There are many variant hybrid models floating between monthly subscription and a full upfront perpetual licence fee.

How do you get a reseller channel working on a SaaS model?

SaaS businesses are different in how they sell? If your business model is purely monthly subscription based and no setup fee then how to you incentify your sales people? ‘Traditionally’ you would pay your sales person’s commission on new business once the cash had been received. Sales people operate best in an instant gratification model. They win, they get rewarded, they get happy, then go sell more. They are ‘coin-operated’ sales people.

Many resellers, system integrators and independent software vendors still operate on full licence fees paid upfront basis to incentify their sales engine. SaaS businesses don’t generate cash to enabled paying lump-sum commissions on a cash-received based.

Consider a Sales Person’s Choice: When a sales person has an option of selling a product with full commission upfront and or one with a drip-feed commission over 3 years, which is he going to choose?

What should you consider when selling your SaaS software through resellers?
Assume they are a suitable partner with access to your target market and have the necessary skills to resell your offering)

1) Business Model Differences
Does the reseller currently sell or has sold SaaS offerings?

2) Sales People Incentives
Are their sales people currently incentified in lump sums on a cash receipts basis? How will your product sell in this mix? What do the sales people think?

3) Agility / Pace of Change
SaaS model is associated with highly scalable growth, will your partner still be suitable to work with you through many iterations of change. How fast can they educate their sales people? How fast can they respond to the market?

4) Culture / Customer Focus
When you’re concerned about keeping or losing customers of your SaaS system on a monthly basis, you are deliberately highly responsive to customer needs. How will this work through a reseller?

5) Legacy, History and Tradition
It’s hard to change mindsets. When people and businesses are used to operating in a particular way, don’t expect instant change. When a reseller or a sales person is starting to sell their first SaaS offering, the differences will take time to get used to.

So how do people made it work?

I know of one company who changed the charge model to include a setup fee, just so they could incentify their sales channel?

Another, their offering added value and helped sell another product with an initial licence fee and thus gave the sales person an added bonus drip feed commission over many months into the future?

How do you incentify your sales people in your SaaS business?
How do you overcome the channel effectiveness challenges in partnering your SaaS business?

Definition: Missionary selling = having to sell the concept and then having to sell your solution and your company. Usually creating a new market or selling a revolutionary or disruptive solution.

Technology visionaries see how it should be. They see the blatant inefficiencies, stupidity and  wasted money. They create fantastic solutions from leading edge technologies that can change how we work and live, whether the market is ready or not. The visionaries, with great energy and enthusiasm, start preaching “the changing world” and how things should be and thus their solutions are introduced to the market.

“People NEED to change”
“Businesses NEED to adopt new ways to compete and stop the wastage”

But people won’t change until the market tells them to do so and not just because there are efficiencies to be gained. There is risk in change and there are vested interests in not changing. When a market begins to decline, innovative solutions come to play from existing market players or from new entrants.

When an industry’s players are making money in the current industry structure how do you get in with a disruptive offering?

Geoffrey A Moore has written much on this. A great author. Great books. I’m currently reading and highly recommend “Dealing with Darwin”. It was recommended to me by a client, Kevin O’Leary, CEO of Qumas.

I’ve seen this, experienced it and learnt the hard way. When you sell the visionary sell, it’s very hard work to get things moving. The visionary becomes an evangelist with unwavering belief converting a number of strategic thinkers in senior positions in key target client companies. The business can become a sequence of paid pilots and trials rollouts or projects to demonstrate the value to their operating teams. But slow to grow to full scale projects.

How do you get over the hump of “just too many vested interests keeping things as they are”?
“The market will change, it only makes sense!”,
…quoting a great Irish technology business leader “But will they starve in the meantime?”.

You see this visionary thinking within university research projects, and rightly so. They are projecting years ahead on how things should or will be done and providing solutions to meet this need, not taking the challenges in the current market structure into account. If it takes five years to change the industry, what’s going to feed us in the meantime?

So how can visionaries get to the market and build a business to reap the rewards of their efforts; like eating an elephant, bit-by-bit and not a whole elephant on a plate.

Firstly, how do you know if you’re visionary selling?
1) You have no direct competitors. Others are likely solving the business need very differently and maybe even labour intensively
2) It’s a regular discussion on the various ways to communicate ‘what it is’ and every sales presentation may be different (making very difficult to learn what works)
3) If you had market success, some businesses types would be no longer needed in the marketplace
4) The passionate visionary tends towards seeking appreciation for the creation or idea from like-minded people and finds it difficult to talk to the tough decision makers
5) The visionary takes it personally, when its suggested we focus on solving more mediocre problems and not the revolutionary sell

So what do you do?

1) Don’t give up on your vision
But don’t be so firm on every detail. Think about what you want but don’t get caught up in the detail of how you will get it. Lets work that out on a step-by-step real world basis.

2) Sell at an operational level and get faster decisions
Change the language and consider the needs at at operational level and how these needs may change over the years. Unless you have loads of investment, stop trying to stomp all over the structure of the industry and work within the current structures to start the change.

3) Sell what the customer wants today
Consider the baby-steps towards the vision. Breakdown the value in your solution and offer it bit-by-bit in easy to swallow low-risk chunks of success for your client.

4) Make it easy to buy. Make it easy to say yes.
Low pain, low risk, easy to get started, clear value proposition, no great dissenting voices…

5) The greatest competitor of the full vision maybe a great partner in the bit-by-bit approach
Can you help the other solution providers move towards the vision? These are the companies that are operating successfully in the market. They have the relationships and have the money. Do you have an offering for them that can improve their business without threatening to take away their lunch?

6) Build slowly by nurturing good beta customer relationships
Bit-by-bit, step-by-step, crawl-then-walk-then run. When you’re clients say you have something then go talk to 10 potential clients, with the same message. Learn, change and progress from there.

7) Learn from leaders
Remember how Google started; slowly, offering something of value and low-risk from the start.
Remember WebVan; crazy, huge investment and changing the world.
Remember how Amazon started; slowly, low investment and learning with every sale.

8 ) Work with good advisors and find a strong industry partner to help commercialise your idea

9) Read Geoff Moore’s books

Does your company’s growth depend on your product’s adoption cycle? A product’s adoption cycle is how long it takes to prove the value in your product or service.

When you’re launching a new product to the market, we need to understand the length of time it takes for the customer to see the full value. How can you build a business case for your product without the customer seeing the value?

When you start to experiment with the market to determine the best route and approach, the length of the Adoption Cycle determines how fast you can adjust, learn and be ready test again. An Adoption Cycle of 1 month allows you to adjust every month. An online business with 1000s of customers and a short time-span to prove its worth, can experiment many times a day working to give the customer better value and beat the competition. Isn’t this one of the reasons why SaaS based businesses can move and change faster?

It traditional software businesses the cycle is slower with many months being typical. Its one thing to sell a concept of what you’re software can do if it doesn’t cost the client too much to try it out. It’s not so easy to get your client to spend money, including their cost of change, without seeing proof that what you’re offering.

It takes experimentation to get better; you get better faster with shorter adoption cycles.

This is in response to, or to add to, Annette Clancy’s post “Costing and Pricing” about an exercise with artists.

But first, I enjoyed Jeff Nolan’s presentation on “Emerging Trends in Pricing & ROI” at the IT@Cork conference recently.

What is the relationship between how we price our product or service and what it costs us to deliver?

To point out the obvious: Price - Cost = Profit

So which is most appropriate for calculating the cost of your product or service?

1) Price = Cost + Margin (where Margin is % profit you decide to earn on each sale)
2) Price = The perceived value to the buyer adjusted according to competitive forces
3) Price = X% of Return on Investment - where X% might represent one year’s savings as a result of your offering

Referrals are a great source of new business but may not build your business fast enough to suit your goals.

So your product suits everyone, but who does it suit best? Who will get the greatest value from your product? Who will buy fastest?

To market effectively:
=> You need to break down your market on a sector-by-sector and/or on a region-by-region and/or on a demographic basis, even if you are operating a web-based business.
=> You need to tune to your target market defining your key messages, your language, offerings and customer support accordingly.
=> Do not market everything you can do, as the message becomes too complex. Market your company, key Unique Selling Proposition and an initial “hook” offering. You can vary the hook on various campaigns.

The purpose of your marketing efforts is to develop leads and not to educate the market on everything you can do.

A basic high-level direct market attack plan is as follows:

1. Know your business direction
You must decide what products, capabilities and offerings that allow you to put your best foot forward taking advantage of the right opportunities in the marketplace.

2. Define your offerings
- Define and detail what you have on offer.
- Create a corporate image for your company that represents your standards.
- Create Marketing and Sales materials that show what you have on offer
- Use Case Studies with client endorsements.

3. Define your Ideal Client Profile
- Know who you want to do business with, based on who you work best with and provide greatest value to.
- Detail the Ideal Client profile

4. Gather a list of your target companies and contacts that broadly fit your Ideal Client profile
Using your Ideal Client Profile, with Market Research, create a list of prospective clients. It?¢‚Ǩ‚Ñ¢s worth buying a completed list or paying someone to build a relevant list of companies, addresses, contact names, job titles, phone numbers, email addresses, systems in place etc.

5. Plan and Execute your campaigns to build your pipeline
- Put the resources in place and start
- Use a CRM system to manage your Prospects, Leads, Contacts, Marketing Materials etc
- Execute, Follow-up and geneate leads
- Build a relationship with your marketplace
- Build your pipeline
- Gain new clients

Marketing should not be an occaisional activity for your company, no manner how small. Marketing is one of those good habits that when in place and done effectively will produce on-going results. This is an on-going action that will generate leads and continue to open doors to develop business.

As in everything, 10% planning, 90% effective action.

A typical belief of a Service Business is that:

Selling Services means Selling Time of relevant Expert Personnel

So, by this belief, to grow a service business’ revenue you need to employ and/or contract more people…

IS THIS WHAT YOU THINK?

Firstly, an event you must attend. I am acting as host at an IT@Cork’s Sales and Management Forum event “Managing a Service Business for Growth” on Wednesday March 22nd at the NSC. Another high value IT@Cork event where valuable business insights, networking and refreshments are certain.

Paul Hourican, founder and MD of PFH Computers is one the speakers on the night. Paul is one of the early entrepreneurs of the Cork IT Sector and has built a tremendous national IT services business in PFH. Well worth hearing his views….

SO, back to topic.

following the train of though, “to grow a services business’ revenue, we need to hire more people”. As in bespoke software development houses, more staff means greater ability to sell more ‘Units of Time’. For each Unit of time there is a clear margin. Then different level of expertise have different charge rates. For example, within the same project a Senior Business Analyst may charge out at E200 per hour, while a junior developer may be E60 per hour…

Is your business is focussed on solving particular business needs and selling expert time as a solution?

DO YOU use high-level expertise every time?

How Many times, in the past, has your company solved the same business needs in the past?

You know all about re-usable code in software development, whereby when developing a system component/module that is likely to be used in other systems in the future then you’ll develop it in a general manner, parameterised, configurable etc. Then it is reducing future project effort and reducing risk.

NOW, a thought (to be further expanded at a later date)…
If you were asked to provide a service to solve the same problem in 20 different client businesses, would you approach it differently than solving it in 1?

YES, you would. You would stand-back, define an approach, a process of gathering information with review points, decision points and actions. You can then decide on the level of expertise required at each point and whether your high-level expertise need to be at every stage…. This is the basis of Productising a Service.

As a discussion piece to the article on “How Do You Price Your Product?” in the December Maidsfield Market Leader Newsletter.

When businesses buy, they are investing to gain a return. Pricing is inherently linked to Return-On-Investment.

Do you know how a buyer constructs a Business Case for buying your solution? Do you know what arguments they make internally to their financial directors on why their organisation should buy your product? Do you help your prospects construct this business case?

Understand the Pain, the needs that your product is solving. Understand the cost of these pains to your prospect and how they calculate this tangibly. Understand your ability to resolve these pains, both tangibles and the intangibles, ie: the frustrations, complaints, distractions, sleepless nights etc. Sometimes the intangibles are worth more than the tangibles, to the certain people.

Price according to what your solution is worth to your prospect to resolve the need and clearly demonstrate your proven track record, which better guarantees success. Your clients success that is.

do take a look at the December Maidsfield Market Leader Newsletter.

and all comments welcome

Many people and companies focus too much on capabilities and expertise they don’t have. They forget and take for granted the expertise they do have.

Your customers are the best people to find out the true value of what you do, even if you don’t charge for it.

I think its better you ask an experienced third party to do this for you. Surveys are OK but may not give the full picture. Ask someone to meet with key clients and talk to about why they do business with you.

In doing this for others (in the past), I would always ask

would your pay three times as much as you did?.

In one case in talking to 10 customers, 9 out 10 said yes.

Whether you sell a system to enable greater efficiencies and reduce costs OR you sell a gadget to enable better communications you are selling a component of success for your client. Do we understand what defines √¬¢‚Äö?ᬮ?Ä??Success√¬¢‚Äö?ᬮ‚Äö?묢 for your client?

If we are selling to a Production Manager, success is likely to be: interruption free, efficient production, attaining target volumes at the required quality levels. If your system allows the Production Manager to make any component of this work more efficiently what other components are needed to complete the full picture?

In understanding the full picture of success for our clients you can identify all the components of success.

Within this exercise lie two business development opportunities:
1) Identifying new products or services your company can develop and provide.
2) Identifying potential partners companies targeting similar clients to your business who share your interest in your client√¬¢‚Äö?ᬮ‚Äö?묢s success.

So get on with it - understand you Ideal Client and what defines “Success” for them