IN THIS ISSUE:
Executive
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February 5, 2004, 12-1 pm ET: Secrets
of Top Performing Services Firms, Sponsored by Microsoft,
Free.
March 9, 2004, 12-1 pm ET: Five
Secrets of Top Services Firms, Sponsored by AFSM International,
Fee.
GET POSITIONED FOR MORE REVENUE
In 2003, every successful small to medium-sized
IT company we surveyed
said that company positioning is one of their biggest priorities
as they prepare for tech sector recovery. How do small to
medium-sized IT leaders prioritize their marketing efforts
as new, often confusing marketing investment options continue
to emerge?
We recently interviewed Rob Gelphman,
a principal with Gelphman Associates of San Jose, CA and
an adjunct Marketing instructor at Golden Gate University
to seek some answers. According to Gelphman, “Too many
technology executives over-invest in a branding campaign
when it is positioning that is required. To make things
worse, many folks don't know the difference between the
two.”
Plato suggests we pave the path to (marketing)
wisdom by first establishing some common definitions.
The primary goal of branding is to generate
an emotional response from the intended audience where logical
product comparisons are difficult. Branding is the distinctive
name or trademark for the service or product. In crowded
tech segments such as offshore outsourcing, business process
outsourcing (BPO), and network support services, branding
becomes even more challenging because clients have multiple
vendors from which to choose and have trouble seeing uniqueness
between them.
Over the long term, a popular brand (e.g.
Kleenex) provides recognition and awareness. The bad news
is that branding takes time and money.
We can point to some successful branding
stories. Intel is the undisputed leader in microprocessors.
Cisco makes networking equipment used in the development
of the Internet. These companies do have brand strength
in their respective markets, and a dominant, well-understood
position in their market. (Geoffrey Moore coined the phrase
“gorilla” to describe this venerable role). Conversely,
Sun Microsystems’s brand is eroding and in serious
need of an “extreme makeover.”
Positioning, on the other hand, helps
customers recite the attributes of a company’s offerings
that help the customer solve a problem. Positioning can
be done in a much shorter time frame (months, not years),
and is much less expensive than branding.
In spite of these distinctions, all of
the poorly performing IT services companies we interviewed
viewed positioning as a lower priority than product training
and IT infrastructure. See a pattern here? Let’s face
it-- A sales channel (e.g. a website with a “robust”
shopping cart feature) is NOT a positioning strategy.
For those poor performers in our study
who saw a 10%-15% decline in average billing rates last
year, we found a direct correlation between their commitment
level to positioning and the degree to which they were treated
by the clients as low-priced vendors. Vendors are often
forced to only interact with web-based, impersonal purchasing
“agents” who buy solely on price and vendor responsiveness.
This is often referred to as Vendor Managed Services (VMS).
Will Gateway’s re-positioning effort
as a digital TV vendor pay off? They have transitioned from
a computer company into a consumer electronics retailer.
This re-positioning took courage. Lots of private, one on
one meetings with analysts, customers, and Board members.
Yet the company lowered fourth quarter 2003 revenue expectations
to about $880 million, down from its previous forecast of
$925 million to $975 million.
If you lead a slightly smaller company
than these billion dollar behemoths, consider these positioning
strategies for 2004:
1. Scrutinize the current market
segments you serve. Please delete the words “everyone”
and “all” from your marketing literature quickly.
If your tech company generates under $50M in revenues and
are serving more than 5 market segments, you have most likely
spread yourself—and your resources—too thin.
2. Find new, under served segments
that your large competitive brethren are ignoring. Customers
in these niches are not as tied to a brand as one might
think, and would provide willing and enthusiastic testimonials
to a small but nimble company who becomes a subject matter
expert in their segment. Within 60 days, test a small number
of segments (for as little money as possible), and pursue
the winners with unique positioning statements for the ones
you select.
3. Invest in ROI analysis tools
that you can use for positioning your services during and
after your sales campaigns. Start by surveying how customers
hold you accountable. The results will help shape your positioning
strategy and ROI variables. Consider hiring an outside industry
analyst firm (such as Aberdeen, IDC, or Forrester Research)
to help you objectively design this tool. One of my clients
did this and won a $400K sale with Dell Computer. Clear
ROI statements fuel strong positioning statements and collateral.
4. Measure your sales and marketing
teams on the time it takes your new salespeople to make
unassisted sales calls using these positioning strategies.
You’re listening for the level of consistency of the
positioning statements they’re using. Spot-check their
emails and direct mail pieces. You may learn a lot and choose
to make mid-course corrections on positioning.
Once you experience customer traction,
forge ahead towards flawless user adoption of your services,
methodology, or technology. According to Nick Wreden, Author
of FusionBranding:
How To Forge Your Brand for the Future, shares a long
term perspective on this topic: “Adoption is even more
critical in our current economy than positioning. Adoption
means multiple client constituencies incorporate a brand
into their plans, activities or standards.” Adoption
also needs your company’s financial and emotional commitment
well before your first sale.
Using these guidelines, positioning will
lead you to your brand. Proper positioning leads to sales.
Adoption will foster brand awareness. In today’s volatile
economic tech recovery climate, who cares about anything
else?
We welcome your suggestions for future
topics, and look forward to "seeing" you in our
Webinars...
--Lisa Nirell
http://www.energizegrowth.com/
