Peculiarities of marketing software to large groups in the public and private sectors

Posted on February 16, 2012 by Ira Michael Blonder

A radically different computing era was ushered in around 1985 with the advent of the so-called personal computer. Pertinent to this post is the observation that the personal computing era was characterized by a shift from cloud computing resources (in the form of distributed mainframe computing and share computing via mini computers marketed by Digital Equipment Corporation, Tandem, etc) to the desk top where increasingly more powerful computing devices were brought to market, the use of which proliferated throughout Fortune 1000 and large public sector business workspaces.

Today, as Forrester Research has recently pointed out, market interest in computing resources appears to be shifting back to cloud based offerings, or at least the hype would have one think so. Regardless, software technology innovators marketing software to large computing workspaces need to speak to

present day realities
public message topics of discussion
and, finally, assumptions as to where markets are headed

Our bet at IMB Enterprises, Inc. is that the safest assumption is that enterprise class business and public sector buyers will very carefully scrutinize any purchase requests that pop up over the next 3 years as the result of pervasively unsuccessful efforts to capture value from software purchased and already implemented.

This dearth of success on the trail of value does not necessarily spell terminal bad news for software technology innovators looking to establish a toe hold in large workplaces. Rather, the lack of success compels businesses committed to marketing software to frame marketing communications around the best obtainable set of financial information about specific, verifiable, cost savings to be realized from the implementation of specific pieces of software by enterprise business customers. The more specific the better. In all cases the bottom line needs to be, clearly, specific amounts of money that will be saved as the result of purchasing and implementing software. Hype just won’t do. If a year or two is required to genuinely collaborate with the marketplace to determine the specific costs that can be saved, then so be it. Make sure that the resources are at hand to support the business through the fact finding period without pushing the market to accelerate the pace.

We have excellent recent experience working with software technology innovators committed to global business markets. We welcome opportunities to elaborate on our experience. Please call Ira Michael Blonder, IMB Enterprises, Inc at +1 631-673-2929 to discuss your product and your near term market plans.

Sometimes Ready Fire Aim makes sense

Posted on February 11, 2012 by Ira Michael Blonder

Sometimes it makes sense to implement a ready, fire, aim product development strategy. For example, to test out market interest in various product types, or to gauge the readiness of a market to purchase products and solutions for otherwise unqualified needs.

Maintaining product direction in an entirely pliable state, capable of moving any which way to meet market needs, while engaging with prospects on ostensibly clear sales discussions is a great posture to gather lots of useful information about product perception, first hand. This stage should be incorporated within any product marketing plan as it makes little if any sense to finalize product performance without some reliance on the perception and interest of representatives in the marketplace. Usually this type of information is gathered through prospect and customer interviews, but with ready, fire, aim it is possible to go even deeper with prospects and, thereby, gather the most credible response from the market. The fire stage, after all, is actually mustering selling efforts around products. A go to market strategy on the fly.

Notice that I stressed maintain products in an entirely pliable condition. If, on the other hand, products are rigid, then engaging with prospects in this fire stage prior to aiming sales efforts can provide little more than an excuse to either race into product development, or to abandon the business plan altogether. Therefore, but have your funding in place before entering into this type of marketing strategy to ensure that you realize the most benefit from this exercise.

With regard to using the fire stage to determine present buying interest in products and services, this technique can jump start revenue building–no doubt about it. Even more compelling, this stage does not require the support of a full complement of marketing communications tools, etc; therefore saving cash strapped technology innovators precious cash. Further, marketing communications materials can be assembled and published entirely on an as needed basis, which may make the most sense from a funding perspective.

Despite these advantages, I counsel caution with regard to implementing this approach. By no means should your firm look half baked as the result of proceeding in this direction. Be sure, as ever, to stay under the radar while you navigate these turbulent waters.

Call us for further information on the above points. IMB Enterprises, Inc. has considerable recent experience implementing lead generation programs for complex sales of IT products and services to global business. Please telephone us at +1 631-673-2929 to discuss your products and needs. We are particularly interested in technology products–software or hardware–as most of our experience has been garnered from working with software and computer hardware manufacturers.

Producing Valuable Leads for IT Sales to Global Business Is Challenging but ROI is Very High

Posted on February 2, 2012 by Ira Michael Blonder

The process of selling IT products and services to global businesses and other large organizations, with overwhelming frequency, devolves at an alarming rate into highly competitive situations where factors are clearly at the disadvantage of IT marketers. These factors include:

Important roles within opportunities to engage with prospects change. Prospects assume a dominant position, changing direction as they see fit. IT marketers may be left high and dry at will
Telling signs of commodity purchasing scenarios rear their heads. For example, prospects cut back on engagement opportunities with IT marketers. Pricing discussions proliferate. The task of researching needs as well as methods of satisfying these needs becomes entirely relegated to prospects. IT marketers have little to no opportunity to speak up.

It is imperative for IT marketers, even those with products and services offerings entirely relegated to specific product platforms that lie out of their control (I include in this category offerings from Microsoft Managed Partners, Oracle Partners, SAP Partners, etc) to build fine tuned lead generation programs to ensure as completely as possible that precious scant face time and ear time be spent with the right prospects. IT marketers must be sufficiently capitalized to ensure that these opportunities to engage include no unnatural imperative for prospects to move forward, prematurely, at all. Better to take two years with the right prospect to land a lucrative order than to utilize artificial means to hasten the purchasing process. In fact, it may be necessary to authentically partner with decision-makers within prospect businesses who have a useful view of realities while incorrect decisions, already on the table for purchasing discussions, are dismantled.

Broadly speaking, in order to produce useful, promising sales leads for complex IT products and services to global business prospects, it is imperative that methods emphasize telephone contact to ensure that a meaningful set of potential advocates, information-gathering resources, decision-makers, etc within prospect businesses can be gathered in an efficient manner over manageable time frames. It is quite simply not possible to “touch” enough contacts within prospect businesses, neither via opportunities for face to face meetings, nor from conference attendee lists, or even email marketing outreach programs. Further, the mode of this telephone contact method must be firmly limited to teleprospecting activities, at least at the outset of campaigns, prior to identification of useful decision-makers, etc.

IMB Enterprises, Inc. has considerable recent experience implementing lead generation programs for complex sales of IT products and services to global business. Please telephone us at +1 631-673-2929 to discuss your products and needs. We are particularly interested in technology products–software or hardware–as most of our experience has been garnered from working with software and computer hardware manufacturers.

Global Business Markets Require New Product Marketing Strategies in 2012

Posted on January 26, 2012 by Ira Michael Blonder

Technology innovators looking to build mission critical requirements within today’s global business markets must develop new product marketing strategies. Pervasive disappointing performance of big ticket technology purchases since the mid 1990s have graced technology buyers with a new tough skin — hard to penetrate and bullet proof just like rhino hide. Portfolio management is now a pervasive reality for IT departments at global businesses. Products without a cogent value proposition are not only unwelcome, they are ignored. Therefore, marketing teams must come up with new product marketing strategies to stimulate interest.

We think it’s helpful to characterize the global business market for technology as dysfunctional. Buyers pursue solutions to requirements that may vanish at any time as the result of dwindling technology budgets. As well, management may rethink needs, deciding that the pain of unmet needs will prove less expensive than a solution. With these assumptions in mind, the prospect of fabricating new product marketing strategies for complex products designed for global business markets takes on a more promising glow. Better get with the program, after all, February, 2012 is already just around the corner.

Collaboration ought to be the new mantra for technology vendors vying for global business markets. Maintaining a collaborative position with customers, prospects and the overall market means crafting opportunities to discuss requirements, objectives and long term planning with buyers as well as the important business managers that have been identified within prospect businesses. An ability to transpose the objectives of technology manufacturers into customer and prospect objectives is welcome. Successfully transposing objectives renders prospect discussions into a level playing field where all parties are after the same objective. As well, once all objectives are uniform and completely aligned, then prospects, customers and vendors take on similar roles that all parties (particularly buyers and business management) will look to perpetuate over the term during which relevant solutions are under discussion.

How to manage this transposition? It’s helpful to realize that the business objectives of vendors include placing products within solutions at global businesses. Buyers truly have the same objective, do they not? In fact, buyers are looking to implement solutions. They will maintain that objective as long as solutions appear viable and rich in value. Therefore, seeing matters clearly is the same as realizing that everyone at the table is after the same thing. With that understanding in place marketing and sales make more sense. Get it?

If you have a product or service that you think makes sense for global business markets, we’d like to hear about it. Please call Ira Michael Blonder directly at +1 631-673-2929 to further a discussion.

Develop a Thorough Familiarity with Competitors to Keep Market Development In Perspective

Posted on January 21, 2012 by Ira Michael Blonder

I never counsel clients to enter markets where competitors cannot be identified. The only exception, as I see it, is a market that services a niche set of needs that have arisen from a larger, more familiar and competitive market.

For 95% of innovative technology businesses, markets without competitors are, at best, not worth entering and, at worst, traps capable of sinking entire businesses. Most so called break through products are really, when analyzed, solutions to needs that are either confined to very small markets for which a first provider with little capital may be able to capture most of the business, or to needs that have been underestimated or otherwise unknown (in a television interview aired in January, 2012, Bill Gates communicated some of his own “shock” at the great success that became of the Microsoft that he and Allen founded. He noted that neither of them ever planned on the massive size of the market that would develop for personal computers). With regard to the former type of opportunity, once ensconced in the leader position, a pioneer will be able to fend off competitors “late to the dance”. But these types of opportunities are seldom readily apparent. Usually a first provider of this type will be founded by someone who has personally spent time as a user in the market, knows the need very well as well as the solution.

With regard to the latter, big splash break through products require lots of capital, not only for developing products and solutions, but also for developing and nurturing markets themselves. Therefore, these opportunities are usually the stock and trade for Venture Capitalists with deep pockets. Not the everyday turf trod by under the radar technology driven businesses.

Therefore, business plan 101 dictates that chosen markets must include the participation of competitors as a demonstration of the viability of the revenue potential of the market to feed the business. Once these markets have been identified it is essential that as much information be gathered about competitors as possible. This information will prove to be invaluable when it comes time to select a distribution model for a product, service or solution. After all, why leverage a channel distribution strategy if no one else in your vertical is doing the same? They may well know something that you do not. In this case, what you may not know may be able to hurt you in the form of dollars spent needlessly on intermediaries who no one else is using to win their business.

I am presently working with clients facing just this type of challenge. I welcome opportunities to discuss specific needs. Please call me at +1 631-673-2929 to further a discussion.

A Post on Rising Above the Commodity Fray

Posted on January 18, 2012 by Ira Michael Blonder

I met recently with the president of an Independent Software Vendor (ISV) with software offerings built with the Java® programming language who expressed disbelief when I let him know that his prices are too low. I later learned that when I took a break to leave the meeting he asked of a trusted colleague “what does he mean that our prices are too low? Each of our competitors are priced into our range? How can we raise our prices?” I should state that this ISV offers a product in the online marketing category, a piece of software that delivers lots of reports about search engine placement for products by keyword, etc. I should also note that I’ve written elsewhere in this blog about the controversy implicit to online marketing for the sale of complex products to global businesses and other large organizations; specifically does marketing online get you anything besides a big dose of commoditization if you’re offering complex products with intangible value to an uneducated prospect? From my conversation with this CEO I must say that the same question applies to vendors of online marketing software, as well.

All well and good, but what’s relevant to marketing and selling big ticket software and other technology products to global businesses and other large organizations in 2012? Specifically that the old adage, “a sales person without a sense of urgency is no sales person at all” rings true. With a product with an entry level price of $199.95, lots of competitors, and a limited universe of prospects, I am of the opinion that the price of this software has to go up, one way or another, if this CEO’s business is to grow to any size of significance. I should also add that this ISV is located in Eastern Europe, where the cost of living is substantially lower than the cost of living here in the States, but no matter. Opening offices internationally will be an inevitable step forward for this ISV if/when they do manage to grow; therefore, at some point they will have to pay out higher salaries which will put lots of pressure on the present pricing model.

When I returned to our meeting I attempted to educate this CEO that he should think about turning some weaknesses of his product into the foundation of his higher pricing model. Our discussions illuminated the fact that this ISV assumes that its customers are presently only utilizing 10% of the capability of their product. My response was, is there a common additional value that most any customer can derive from the remaining 90% of the product that is under utilized? If there is such a common additional value, then why not take a proportion of that additional value (in hard dollars and cents) as an entirely justified additional cost for customers who want, need, and “must own” the remaining 90% value that is presently alluding them. Of course, then let’s take that proportion and build it into the pricing model of the product.

There is an old time precedent to this strategy. Just look back to the mid 1980s when Xerox Corporation successfully sold high end laser printers into the global business market against HP LaserJets. How did Xerox bring off these sales against a competitor with drastically lower prices? Xerox took the steps to integrate its laser printer products into the predominant computing environment of the mid 1980s–distributed mainframe and PC computing. Fact was that their printers had the necessary “hooks” to print mainframe data where HP’s products did not. It doesn’t matter that the required connectivity was rather trivial. What matters is that Xerox had it and HP did not. Xerox made the sales at a higher price point within a heavily commoditized market.

I specialize in these types of discussions. If you have a technology product with some broad market appeal for global businesses and other large organizations, I’d like to hear from you. Give me a call at +1 631-673-2929.

VCs that Know Nothing

Posted on December 11, 2011 by Ira Michael Blonder

On Friday, December 9, 2011, Ms. Maha Ibrahim of Canaan Partners was interviewed by Ms. Emily Chang on Bloomberg West. Bloomberg West is a television show that is broadcast Monday through Friday of each week. The topic of conversation was Zynga’s IPO. Zynga is in the business of manufacturing online games. Online games are far removed from the type of complex product that I have focused on in this blog. Further, online games are not the typical product of interest to enterprise business customers. Nevertheless, this pair went on to posit absurd claims about the enterprise market for software, seemingly out of nowhere.

Ms. Chang opened the gate when she asked Ms. Ibrahmi to speak to “what does [SAP's acquisition of Success Factors] say about traditional software’s business model?” When Ms Ibrahim jokingly mentioned that there was “no reason to have client server software anymore” and, further, that there was no longer any need for enterprise business to bring in “large Ernst & Young or large integration firms for years to help you to implement your software for your employee base” as the result of the supposed revolutionary nature of “cloud” computing, I needed to put type to page on this one. The fact is that Ms. Ibrahim is, in fact, dead wrong.

As I’ve written elsewhere in this blog, “cloud computing” is nothing new. Just reflect back on computer timesharing which was a business with some heft to it back in the mid 70s and 80s. Yes, mid size companies opted for the economies of scale represented by buying time on systems that were otherwise out of reach. Further, large businesses leveraged IBM mainframe computing systems via 3270 terminal emulation to deliver the features of mainframe computing to desktop PCs distributed across the enterprise. But in neither case did these early instances of cloud computing displace on premises computing systems. In fact, with the advent of the Graphical User Interface (GUI) and powerful PCs, timesharing went the way of the dinosaur.

“Own your own” has always been the preference and always will be the preference for those businesses with the financial capability to do things the right way. Cloud computing for enterprise business is simply a side track to be taken while ISVs take necessary steps to improve their ability to deliver bonafide value to customers. The real “meat” to this “motion” for under the radar innovators is still to be found in the enterprise sale of precisely the multi year engagement that Ms. Ibrahim claims is now gone for ever.

Not so, says Mr. Marin Petry, CIO of Hilti Corporation. Mr. Petri participated in a panel discussion of the definition of Cloud computing hosted by the Tuck School at Dartmouth in October of this year: Risk and Rewards in Cloud Computing (http://www NULL.tuck NULL.dartmouth NULL.edu/digital/media-library/radiotuck/risks-and-rewards-in-cloud-computing/). Mr. Petry clearly states ” . . . I do not understand cloud computing as I basically turn the key on my data center and said ‘that was it’ and everything else that I’m doing from that point onward is coming out of the cloud. We do actually at Hilti do quite a bit with cloud computing but that is peripheral additional applications that I do not have to run in my data center. I still have my data centers. I still run SAP in my data centers. I still run Microsoft Office in my data centers. That will not change in the next few months. That might change over the next 10 to 15 years, very likely, in different steps, but that’s not reality today. I do not believe that the larger industries today can close the data centers because everything is coming out of the cloud.”

Another participant in this panel discussion, Mr. Olivier Gouin, Group CIO of Nestlé speaks of a private cloud that is specific to a larger enterprise business as opposed to a public cloud that is “more appropriate” for smaller businesses. He cautions against a “wrong perception” that cloud computing is antithetical to the typical method of implementing software (meaning via data centers) for larger businesses. Rather, the sole utility cloud computing represents for the enterprise is specifically within an entirely private “cloud” that, Mr. Gouin makes clear, ought to be separated from external facing websites. Finally, Mr. Gouin voices his opinion that the public Internet is still not ready for “prime time” as the result of the insecurity of data communication. Perhaps in a “few years” that may improve, but not the case at present.

I know that Ms Ibrahim is entirely off the mark. I would be happy to elaborate. Call me at 631-673-2929 to learn more.

Rely on Customers and Prospects to Identify Needs, Test Solutions and Conceptualize Products

Posted on December 1, 2011 by Ira Michael Blonder

Roughly speaking, Independent Software Vendors (ISVs), systems integration firms, and technology consultants can go one of two ways as they proceed down the path of new product design:

Build the product and then find out if anyone needs it, or
Communicate with customers, prospects, competitors and representative groups within a market to discuss areas of need that can be addressed by products and/or services within the range of company skills and production capabilities

In my estimation, option 1 is practiced far more often than option 2, usually as the result of an assumption on the part of an entrepeneur that option 1 represents the easier and faster approach. In my experience, however, products produced by the option 1 method generally fail. The fact is that it is next to impossible to extrapolate from an individual notion to an accurate estimation of a pervasive market need.

Rather, strict application of the option 2 method, which starts with zero assumptions, whatsoever, about solutions, market needs, etc, is a much more reliable and ultimately less costly approach to product development. After all, walking away (before any product development costs have been incurred) from an assumed marketplace that is found to be non existent, is certainly the right course of action.

Option 2 is easy to implement through a teleprospecting function. Prospects and customers will be much more willing to participate in telephone conversations that are not encumbered with sales offers and product presentations. In fact, some contacts who are involved with marketplace topics will be eager to share information with a skillful teleprospector.

The teleprospecting program should be crafted to not only gauge product needs, but also, and of most importance, the level of clarity with which prospects and customers perceive these same needs. It is especially important to make some estimate of marketplace clarity in order to accurately forecast the length of any sales cycle as well as the actual timing for product development. After all, it makes no sense to develop products for an immature or “broken” market. Better to work closely with prospects and customers to clarify needs. Once needs are clear, then products and services can be recommended as solutions for needs.

Presently in the winter of 2011, many technology marketplace needs lack clarity. Compounded failures to deliver value, false promises of amorphous value, together with underestimation of what it takes to deliver Business Process Re engineering (BPR) have rendered many a technical marketplace into a “no man’s land” which ought to be avoided.

Better take surveys than dream up products for enterprise business 2012.

Wrong Turn at the Roundabout: Let’s Design It, After all the Customer doesn’t always know what she needs

Posted on November 15, 2011 by Ira Michael Blonder

Deborah Gage of The Wall Street Journal (http://www NULL.wsj NULL.com) published an article on the 2011 rationale for software companies to make the dubious effort of building enterprise “solutions without a problem” — FASTech: Businesses Need Smarter Software, Whether They Know It Or Not (http://blogs NULL.wsj NULL.com/venturecapital/2011/11/08/fastech-businesses-need-smarter-software-whether-they-know-it-or-not/).

Here’s the story line: [Software ISV VP of Sales] “We’ve gone down the path of the complex sale and yes, we fully agree with Jeff Thull (http://www NULL.primeresource NULL.com/) that lots of these deals end up in a “dry run” (to use Jeff Thull’s method of referring to sales that, for one reason or another, never happen). In fact, we find that when the customer reaches the conclusion that she doesn’t truly know what she’s looking for, or that the systems are not in place within her enterprise to support the implementation of ABC solution; that she will not buy our product.”

Here’s the punch line: [Software ISV VP of Sales, with VP of Product Marketing at his side] “Therefore, we decided to build a version of the product anyways. After all, who knows where the market will go next. Our [half baked] solution might be just the ticket next year.” This decision to build the product anyways ends up costing ISV buckets of money and lots of development time that would be better spent working on useful solutions that customers will ultimately ask for once the dust settles and thoughts coalesce into workable requirements.

Our C level managers of sales and product marketing have made a wrong turn at the roundabout. What they ought to have done, as Jeff Thull makes very clear, is to dropped the sales plan to book the order this year, but make the marketing commitment to partner with the customer through the potentially lengthy process of identifying flawed decisions, assumptions and plans, renovating same and, finally, planning for a reasonable, workable solution that our ISV will end up building for the customer. After all, in all likelihood few, if any competitors of our ISV will be willing to partner with the customer to work this process through to a successful conclusion.

Bottom line: Customer driven product management still makes the only sense for innovative businesses with high expectations about market penetration. Wasting time building gadget software will not pay off over the long haul. Worse yet, decisions to build gadgets are indicative of a lack of patience with markets, the kind of character flaw that can threaten to deep six the best of plans.

Pick Market Niches with Great Care — Ready Fire Aim Won’t Work for Market Niche Decisions

Posted on November 14, 2011 by Ira Michael Blonder

Building markets on monies spent, but for solutions that are under utilized, is a problematic endeavor. Consider that 1) the big purchases have already been made and 2) that the solution purchased has not proved to be popular.

Consider the enterprise business market for social collaboration software. This market includes products like Microsoft® SharePoint® and IBM® Lotus Notes. Traditionally purchases of SharePoint and Notes have been plagued by low levels of user adoption within the enterprise. Answering “why” adoption rates are low has proven to be a risky endeavor as research power houses like Forrester Research (http://www NULL.forrester NULL.com) are at a loss to explain clearly a pervasive reason for low adoption rates. Rather, Forrester and others contend that low adoption rates are the result of a combination of factors, including low levels of “user friendliness” in the features of SharePoint and Notes as well as a tendency to push users into re-engineering daily business processes.

Business Process Re-engineering (BPR) is neither a trivial thing to achieve, nor an area where most consulting firms ought to venture to find new business. Sales cycles are very long. As well, the typical BPR solution requires the buy-in of multiple silos from within the enterprise; for example, for banking and finance, Audit, Compliance and MIS/IT may all have to endorse the same solution before an order will be placed. Building consensus among these three powerful organizations can literally be a multi year effort that will prove expensive, not only with regards to the amount of time required to pull off the deal, but, perhaps, in terms of additional parties who may have to be added to the sales team (for example, an ex CEO or other key influencer who can persuade all three groups to endorse the solution) at a costly price.

If major BPR is required to resuscitate the fortunes of Notes, or SharePoint within a business, then why go there? Rather, as I see it, a better case for building a niche upon a purchase already made is to demonstrate how SharePoint or Notes can be applied to an additional need, one that is compelling, but not addressed properly within the enterprise. Once again, turning to banking and finance, the need for constant compliance reporting across this highly regulated industry will provide a greater driver for an attractive market niche with a substantially attractive value proposition. Just compare the cost of using something already purchased, for example SharePoint, for compliance reporting vs the cost of licensing IBM OpenPages. No brainer?

Marketing, Promotion & Sales Consulting for Business

IMB Enterprises, Inc., Huntington, NY 11746 +1 (631) 673-2929, imblonder@imbenterprises.com

Category Archives: Product Marketing