Experience is not what happens to you; it is what you do with what happens to you – Aldous Huxley

 

This paper is intended to create a guideline to enhancing your sales and marketing capabilities. You can follow as many of the suggestions as you wish – I wanted to provoke your thinking.

 

EMF recognizes that businesses today are confronted by unparalleled rates of change that create tremendous challenges. Companies need to differentiate products, react to on-going market shifts, efficiently streamline support of deployed products and exploit globalization. The stories we present are true, the guidelines are proven and the theme is to stimulate you to rethink your strategy in a rapidly changing marketplace.

 

Since I was a young man I have always had the entrepreneurial desire. Setting out without a guide can be a tortuous experience. It’s bad enough knowing what you don’t know. In my case it was worse – I didn’t know what I didn’t know. Through trial and error I built five companies (4 medical, 1 computer). The first were near or actual disasters – but through good fortune I found several mentors who taught me the fundaments of customer-based selling and market driven strategies. My success included taking two companies public – I wouldn’t have reached that goal if I not for the good graces of my mentors.

 

I sold out the last of my businesses in the late 80’s, took a detour in academics and returned to the embedded playing field as an industry analyst in the mid 90’s. Although markets have changed over the past 20 years since I was on the product selling side of the industry, I believe that the strategies that were passed on to me have merit in today’s highly competitive and rapidly changing embedded marketplace.

 

My transformation as a tekkie to a businessman didn’t come from seminars and course work – it came from my guides posing significant questions to me that forced me to rethink my markets, products and corporate values. I’d like to share them with you. I took to these questions not unlike a Zen beginner confronting his koans. The answers to these questions took a lot of reflection on my part, and a rethinking of how business is done and might be done better. Looking back – it’s laughable that I had the temerity to advertise that our products outperformed those of Hewlett Packard (medical). They did but who was going to believe it? HP did me a favor by taking on our product line and selling it with theirs.

 

Let’s begin with what I feel was the most important thought and the questions that ensued:

 

Axiom #1: The Study of Your Competition is Critical to Your Success

 

Whether or not you consider your competitor’s products to be inferior to yours, they are competitors because customers are buying them.

 

Do you know what customers like about your competitor’s products? Dislike?

 

There will always be customers that favor your competition due to factors beyond your control. Perhaps they have been using them for so long that it is comfortable to resist change. Or perhaps they haven’t received the support that they desire or need. Do you know what embedded customers feel are the most troubling issues that confront them and what are the factors that would most influence them to change to you – or leave you for another vendor? Here we are speaking to the broad marketplace – not just your customers. If you’re not, why aren’t you?

 

Today’s embedded marketplace is not only highly competitive, but the factors that affect a purchasing decision are changing as well. Our underlying economic conditions are causing the large (mil/aero) and smaller customers (systems integrators and OEMs) to hold back on purchases until they see a market direction and their bottom line improves. Will you be ready and have a sales advantage to move quickly when market opportunities arise? What strategies have you in place to respond to opportunity – or are you going to be a follower?

 

Are your competitor’s products better than yours; cheaper than yours? Is your marketing strategy able to anticipate and handle objections?

 

Xerox copiers were the most expensive in the industry. Their sales force used an interesting strategy to overcome the issue. They referred to the now popular “total cost of ownership” theme. What was the cost of machine downtime? How much valuable time of senior people did it take to train the new users when the Xerox machine was intuitive and easy to use?

 

These are the questions you need to ask yourself

 

• Do you have access to data/information that shows that your product gets to market faster and/or that final designs are closer to pre-design expectations? Can you quantify a better return on investment with your product as compared with your competitors?
• Are you able to express value in measurable terms? Can you back up your claims with proof that a potential customer will respect and believe?
• How do you anticipate the strengths and weaknesses of your market position? What are your options?
• What is your VALUE proposition? Sell value – not product

 

Axiom #2: The generation of sales leads is the lifeblood of a company

 

• How do you currently generate sales leads? By media advertising? By having a booth at a conference? By cold calling?
• How do you qualify leads and how do you insure that you are calling on either the decision maker or the person that will carry your water to get you the order?
• Are you able to measure the cost per qualified lead – knowing that it also involves your marketing and sale department staff?
• Once you get a lead how do you deliver your message? Do you have sales and product information available to support your field efforts?
• Do you/can you tailor sales support materials to each unique potential customer – particularly one that has used/is using your competitor’s products?
• Are your sales reps trained to handle objections? Can they identify and get to potential users?
• Do you provide after sales service – and is it part of the acquisition cost?

 

Some enterprising embedded vendors have come up with a limited free-use strategy in which one can download a single user, limited function, product for use by developers to try and evaluate. If the developer likes the product and wants to use the design, it is easily transferable to the larger, more powerful purchased product. How does your sales strategy encourage a potential buyer to use and try your product?

 

As an illustration of these considerations, one of my medical products was a premature infant monitor that although less expensive than our competitors, usually exceeded a hospital’s capital equipment budget. Also the capital acquisition process took at least 4 months for approval. Moreover, if an intensive care facility had a maximum capacity of, say, 12 infants they would need to have at least than number of monitors available. Legal exposure to malpractice considerations made it such that they couldn’t monitor some of the infants and not others – they would have to monitor all or none.

 

In doing our research we found that hospitals had separate budgets for deposable products that didn’t come under capital equipment considerations. (Note – in the past, cardiac patient electrodes were cleaned and re-gelled by nurses; a time consuming, costly and unnecessary chore, so hospitals found it cheaper and more sanitary to buy pre-gelled, disposable electrodes).

 

So we leased our capital monitoring equipment for $1 per year per monitor, based on the purchase of an agreed upon number of disposables per monitor per month (which had a 95% gross margin). Based on our success in the nursery, we expanded into respiratory therapy and anesthesiology since our equipment worked on adults with little modification. This strategy was based on information gathering, user knowledge and on establishing a level of credibility.

 

What is your Cost Basis for Providing Sales and Marketing Support?

 

Let’s turn now to what you should consider as an internal cost review so that you strategically understand what it is costing your organization to sell into the embedded marketplace.

 

#1: How do you get your market information and what does it cost you?

• I purchase it from reliable market intelligence source (cost ranges from $12,500 to $100,000)
• I hire a market researcher to read through journals and use Google ($50,000+)
• I use my marketing staff to visit customers and listen to their complaints and needs (limited data). Cost is $100,000+
• I hire consultants to work with my researchers and marketing staff ($50,000+)

 

#2: How do you translate market information into strategic planning and sales support?

 

• I pay the market research data provider to do crosstabs that we think we need to look for competitive and sales support information ($10,000 – $50,000). I still need my staff to use the information effectively, but I can reduce the staff size.
• My staff takes the market data and excerpts relevant information and prepares reports (depends on the size of your staff – estimate $200,000 – $1 million)
• I hire a consultant who is recognized and respected and pay him/her/them to write favorably on my behalf ($25,000 – $75,000)
• I take out journal ads and buy booth space at conferences (very expensive) to get information and get my message out.
• I ask my sales team to provide me with information (minimal cost; minimal benefit)

 

 

Regardless of what you do – you are ALWAYS selling

 

Caution – you are entering a commercial message. We offer valuable sales and marketing information/intelligence at a cost effective price. Our subscribers get:

 

• Two extensive crosstabed databases from the EMF Survey of Embedded Developers that present the responses of 5 types of engineers, 10 vertical markets, chip architectures including DSP, FPGA and Multicore to each question in the survey
• A custom Executive Dashboard that permits you to filter the data according to  your customers, your competitor’s customers, potential customers and broad categories of developers. You will discover what they like and dislike and what issues most confront them. You can develop sales materials, competitive analysis, and target your competitor’s customers as well as potential customers with facts regarding the larger population of developers and their designs outcomes
• You can develop materials to support sales by responding to leads with accurate and persuasive supporting items – including ROI analysis
• Consulting: access to Dr. Jerry Krasner for discussions and feedback on your market analysis – and being kept up to date on buying trends and breaking embedded news

 

This is what we provide at a total cost of $12,500. We work to support your sales and marketing organization. Match that against the cost of employing a department of marketing/sales support or having your internal people try to obtaining compelling competitive information.

 

EMF data and the Executive Dashboard are use by the Navy, Marines, NASA and prime contractors as a definitive benchmark of embedded developments, OS and tools utilization and design outcomes. Your larger potential customers know how your products are being used – I would think that you might want to know this as well.

 

Jerry Seinfeld tells the story of a woman complaining to her hairdresser that she has a bad marriage and asks if she should get a divorce. The hairdresser says, “wow, that’ a serious question. I think that you should ask the manicurist instead of me”.

 

Be careful where you get your information – it can be more costly than you think.