“A great civilization is not conquered from without until it has destroyed itself from within.” Quote of Will Durant.

It is always hard to win from the market leader.
People in companies will buy the products or solutions of the market leader just because of:
- The brand name
- The references
- The fact of not risking to get fired by choosing the leader
- The wide spread availability

The great civilization of the market leader

Your market leading competitor is the great civilization with all its’ directors, managers, employees, products, solutions, marketing, branding, distributors, resellers and world wide support.
You cannot conquer or win from the leader or overtake the leader as long as their operations and internal working are fine as these are operating smoothly.

They have the best salesmen, the best presentations, the best sales engineers, the best marketing, …

The market leader seems invincible.

The decline of the market leader

However as with any larger company, the internal affairs, the internal politics, the ego-trippers and the financial engineering become more and more important than the actual operations.
As a market leader it is likely the company acquires smaller competitors or companies in other markets in order to expand ad grow business.

The effects and problems of a larger company are:
- Managers start to aim for more power or prestige.
- Employees start to aim for higher positions.
- Internal differences in status and functions give friction.
- Identification with the company is lost.
- The wrong people get promoted over the people that really should get rewarded.
- People are promoted for all the wrong reasons.
- Managers get promoted above their capabilities: Peter Principle.
- Politics become more important than the individual performances.
- Tax evasion schemes and financial investments can bring in more money than the operations.

The leading competitor starts losing focus on its’ main operations, marketing, sales and product innovations.
The leading company is destroying itself from within.

Look for signs of decline

In case you are competing with a big market leader then start looking for signs of self-destruction from within.
Then it is time to attack and win their customers focusing on the newly emerged weak spots.
This time you have the advantage of being small: it will take the great civilization very long before they will react upon their new weaknesses and your attacks.
In the meantime you will have gained customers and market share.

Do not attack them earlier as you will be wasting your time.

A great corporation is not conquered from without until it has destroyed itself from within.

How is your market leader evolving ? Have you spotted the first cracks ?

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During the purchase process when people need to decide on buying, they not only focus and evaluate on functions, features and benefits, but their main concern is about limiting the risks related to this decision.

Risk indicators in B2B purchase process

How does a potential client decide if it’s risky to do business with a vendor or supplier?
- Established company or a sole trader?
- Company registration number?
- Where are the offices located?
- Is the company address on the website?
- Telephone number available?
- Can the company really be called?
- The time it takes to reply an email?
- Possible to set-up a face-to-face meeting?
- Are the names of the C-level available? On the Internet (LinkedIn?)

Buying risk avoidance

- References and referrals
- Their personal experience with the vendors from previous project or purchase
- The approved vendor list of the company: the creator of the list takes the risk
- The brand importance of the vendor: the more a household name the less risk expected
- Their personal risk: How big is my own risk? What can I loose?

Maybe the last one is even more important as people don’t want to expose their career (or even life) to any risk.
If they take a daring decision that turns out into negative result or bad experience then they can be at risk themselves: end of career, end of job.
Therefore strong brands and companies with good referrals will score better in B2B.
Nobody ever got fired for choosing IBM or Microsoft. Google on the other hand has still problems entering the BtoB market: Google is great for a free service like search and maps, but when it comes to real business or business processes then decision makers tend to avoid Google.

Recession vs prosperity

During recession or limited growth economy companies having well-known brand names and long referral lists will receive the highest amount of inbound leads. They will be the most successful as people will address to these companies in order to avoid risks.

On the other hand during prosperous times when:
- Companies need to innovate in order to keep ahead of their competitors
- Time is (more) money
- Better efficiency is most important

The importance of the risk factor decreases as opportunity knocks instead. People are eager to take risks in order to:
- Progress
- Move ahead in their career
Then lesser known companies will see an increase of inbound leads as the challenge is to innovative or have cost reducing solutions in order to compete the competition.

How do you perceive the risk avoidance of your buyers?

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At the end of the year many editors, gurus, consulting groups and agencies create content about trends and predictions for the next year. The real reason is probably to generate interest and get attention for their business.
Still, isn’t it strange that only at the Year End people take a look into the future?

We all know that change is the only constant in life and in business. Change doesn’t wait to appear little before New Year. Change happens just any moment throughout the whole year.
If a major event should happen in January then the predictions of December could be completely wrong – outdated in just one month.

Instead of spotting trends and making predictions at Year End, it should be a year around activity not just for decision makers and company management, but also for marketing and sales. Maybe especially marketing and sales, as both are exposed to changes in the market influencing their business almost immediately.

Therefore:
Embrace the future every day. Spot trends throughout the year for your own benefit.

Enjoy these presentations on trends and predictions for 2010.
Use whatever trend suits you most or best:

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Originating as a project company

Many software companies have started out as project companies specialized in a specific field of information technology or a business vertical. Even Oracle.
In order to keep their operational costs low they try to re-use their software code for different projects just developing the necessary specific additional code for each project.

Eventually the software becomes more fully fledged, mature and having almost all possible functions and features for a certain target market.
The step from a project company to a product company seems evident and simple, but that isn’t.

Less is more

The first hurdle is to decide what functions and features from the large set of available subroutines and applications to include. What does the market really want and what has been developed on demand for a certain customer. The more functions and features that are included into the product(s), the more maintenance and support costs.

The sales cycle differences

A project company is in the typical cycle of:
- Finding a deal
- Winning the deal
- Developing the necessary additional code
- Partial invoicing throughout the project – and getting paid during the project
- Delivering the project
- Keeping a revenue stream for additional services for each customer

Whereas a product company has a sales cycle of:
- Marketing
- Selling
- Invoicing
- Maintenance invoices

The changes in organization

The morphing from a project company to a product company requires many changes:
- Marketing needs to promote products instead of services, which is a change of mind
- The website needs to market and explain the products instead of a vague capability description
- Marketing and sales team needs to generate much more leads
- Sales cycles will be shorter
- Sales will need to adapt to the fact customer changes are no longer possible
- Sales will need to close more deals as prices are lower
- Development needs to maintain the product over many years
- Product architects need to design for growing the product and keep it maintainable
- Product management is new and needs to develop the product plan
- Product marketing is required too for specific promotion of the product
- Accounting needs to change their revenue recognition too: less complicated
- Maintenance revenue is lower and fixed
- No or little revenue from system engineers on site

Dealing with the change?

The questions are:
- Can top-management cope with these changes?
- Can middle-management live with the different attitude?
- Can the company bear the weight of the additional functions that are created?
- Can marketing management steer product marketing?
- Can marketing generate enough leads?
- Can salesmen close enough deals?
- Can salesmen adapt to the different sales attitude or should a different type of salesmen be hired?

This and many more problems emerge while morphing from a project to a product company.

How well did your project company deal with the change into a product company?

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When product management or company management is convinced they need a “Me too” product or solution, the company is doomed for failure.

In most cases most businesses or companies have one product or solution that generates the most revenue and the most profit.
In order to:
- Expand into other parts of the market or business
- Shield off competitors entering the customers
- Protect a part of the market
Decision makers will decide to resell or develop a “Me too” product or solution.

The “Me too” problems

The problem is multiple:
- Motivation can be or will be low due to lack of inspiration
- Engineering development time will be invested
- Purchase time will be spend on searching vendors
- Support needs to know the product requiring training
- Service needs to serve more products requiring training
- Product management needs to create supporting content
- Marketing spending is needed to promote it
- Sales needs to be trained to sell the product
- Partnerships will have a time to get partners supporting it
- Business development will seek new business opportunities that are likely not interested.
- Administration will have additional overhead costs due to the new product or solution

The management reaction increasing the spending

After one or two years being in business with the “Me too”, company management or the Board of Directors will match or compare the results with the profits realized with the main product or solution. The conclusion will be negative.
Management will urge to sell more of the “Me too” in order to recoup their investments, which will lead to:
- Public Relations will send out press releases that generate no real interest.
- Marketing will set up pointless campaigns to promote the “Me too”
- Lead generation will demand lots of efforts without much response
- Sales people will put much effort in it without much success.
- Partnerships will waste time to convince partners to support the “Me too”
- Business development will engage into conversations with companies for non-existent or non-feasible opportunities.

As capacity is a limited source in any company this is double waste of time and money as all people involved could have been working for the successful product or solution instead.
Focus is what counts in sales, marketing, partnerships and business development. There is no time to waste and competition is fierce even for a market leader.

In only a few cases the “Me too” will serve its’ purpose: keep competitors out of the customers. Even in those cases the ”Me too” will probably not be really profitable itself.

Thus once the company has made the decision to have a “Me too” the result to expect is a death spiral.

Innovate instead

Instead of creating, developing, marketing, lead generating and selling a “Me too” product, a company should try to develop an innovative product that the market really wants and is a leap forward using new technologies or a new approach.
In that case your company has a story to tell to the market.

How many “Me too” have you been through in your career ?
Has any been successful ?

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When we started the planning for the web service, we also took time to define a name based upon ‘Leads’. We exchanged it in a few emails between us and verified the availability – something we might better have avoided to do.

Stolen domain name
By the time we finished planning and had our first version ready, we wanted to buy the domain name, when it appeared to be snapped away from us already!
No clue how this has happened although we suspect this domain search.

Explorer is a household name
Thus instead of the carefully planned brand name we needed to come up fast with a name that was good sounding, understandable and that explained the main functionality of the web service. Therefore it should contain ‘Leads’ again.

At that moment ‘Exploring’ seemed to be a good indicator of the functionality, but LeadsExploring didn’t sound too well.
As Internet Explorer and Windows Explorer makes ‘Explorer’ sound familiar and a household name, we quickly opted for LeadsExplorer, without much discussion.

The 3 letter word pops up
Once we had paid for the domain name and many its’ variations, all of a sudden the 3 letter word popped up: ‘sex’ in the middle of the newly registered name.

Thus we had a discussion about what to do?
Use it or not?

In order to avoid being too obvious, we decided to try to hide the 3 letter word by using a combination of capitals and small characters: LEADSExplorer.

The question: a disadvantage or priceless?
The question which remains unanswered and still bugs us is:
Does it bring an advantage or a disadvantage having the 3 letter word ‘sex’ hidden inside the brand name?
Who knows?
Does this name get us banned from certain websites or not?
- There are blogs that don’t allow comments using LEADSExplorer as name or as website for a comment.
- Does Google or other search engines give a penalty in the ranking?
- Will this make people avoid to blog or to reference to our site?
- Will people even avoid using our BtoB web service?

On the other hand some people also say it is priceless as it stands out from the crowd.

What do you think ?
Would you avoid using our service because of the name ?

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Market research: jumping on the hype

Whenever a new hype emerges, consultants pop up like mushrooms, portraying themselves as specialists.
Although hardly anybody has any experience with the new media, consultants claim they have the key to unlock its secrets.

The truth is these consultants:
- Happened to get involved into a project that was dealing with these new matters.
- Have spoken at a number of events and written some articles and blog-posts.
- Accidentally became successful (at best)

Marketing: Their main asset is to sell the right stuff on time: when the hype is there and at its’ best.

Sell the fear

Their main objective is to re-use their newly acquired unique experience or knowledge to charge you high fees as they boldly go where no man (of your company) has ever gone before.

In order to state the value they are bringing, they project the image of a hazardous and dangerous journey through this new found territory, requiring specialists to navigate you through if you want to be able to reap the benefits.

They’re selling themselves by fear: claiming that only they are good enough to offset your investment in them and that you will fail miserably if you don’t use them as your guide.

Consultants sell and market themselves

We have seen this happening with SEO consultants, SEA consultants, SEM consultants, Email Marketing consultants, Social Media Marketing consultants, Viral Marketing consultants, Usability consultants, YouTube consultants, … and the latest fad: the Twitter Consultants.
It is all in the image they create in order to bring you more claimed value.
Remember: the price is what the fool wants to pay for it.

Usually, these people’s #1 asset is being able to sell and market themselves using the current hype projecting the image of a quantum leap forward that you as a company will be missing and your competitors will take advantage of.

Most salesmen are selling products or services of their company, whereas consultants sell mainly themselves.

Consultants are top salesmen

Consultants are very good in sales – maybe even the best – as they:
- Sell a concept without much or any hard facts.
- Sell a novelty that still has to prove the business viability.
- Sell at a high price as they have a unique offering.
- Sell fear without really knowing the drawbacks if not applied.
- Sell their skills and knowledge that can be razor thin.
- Sell without any demo.
- Sell the belief they will bring a quantum leap.

Are you as good in sales as a consultant?
How good are you in selling yourself?

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One hit wonders are known in the record industry when a singer or a band scores a world wide hit and all the subsequent records fail to generate any sales.

The overnight commercial success

The same can happen to companies: they have one product that sells relatively well in a market niche or they even have become market leader.

It is like a sitting duck that due to events beyond their control their products have become in demand and popular.
The almost overnight as success took management by surprise, however due to this success management starts believing they are great and invincible.
Management has this high self-esteem although the great success of the company is just a one trick pony due to the accidental commercial achievement.

The end product life-time

As all products or solutions have a limited span of time during which they solution is in demand, slowly the success fades away – just like a music hit in a few months. In case of a product it will take several years to the end of the product lifespan.

The major challenge is then to find another product or solution.
A new product needs to be developed for the market based on the current market view. As management has no vision or no experience in market research chances are the new product will be a FAIL.

In case the success product brought the company to become a market leader, the management believes they can achieve the success again and keep their market leadership. They have no doubt in their own capabilities although they hardly exist. Especially in case the first one was an accidental commercial success there is no reason for them to be able to create another wonder.

However creating a new success product is hard to do and depends on many events and economic factors beyond the control of any company.

The challenge of marketing and selling the next product

The problem for sales and marketing is when the new product, that has been developed, needs to be marketed and sold.
This will become very challenging due to missing experience and the high believe of capabilities of management based on their previous achievements that were beyond their control or just good luck.
The original product or solution had probably an unprecedented market opportunity that made it an instant success once the market was demanding it.
Moreover due to the high demand, no big budgets have been spent previously on launching and branding the original commercial success product.

Thus instead of having well crafted marketing strategy with a significant budget and a well represented and trained sales force the original success was more due to the coincidence and the huge opportunity at that moment instead of a well planned marketing and strategy.

Marketing plans and strategy: missing

When launching the next product the management experience in marketing plans is lacking and the market opportunity is less big as previously. Moreover the original product or solution still sells to the same market.

Marketing is put under pressure to overachieve without much budget or a well planned strategy.
The Sales team is under pressure to redo the incredible sales achievements of the first product without a real big demand from the market.

It is almost certain that both marketing and sales will fail.

Then the management of the company will blame marketing and the salesmen for under achieving. They used to be so much better during their conquest of the market.

However management will never question themselves as they are convinced of their own greatness proven by their first overnight accidental commercial success. They still live on the dream of their original achievement not wanting to see the truth.
Only good management is capable of continuing bringing successful products to the market – most companies are a one trick pony.

Is you company a one hit wonder?
Will your management be able to create another success?

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What does it mean when your sales people are leaving the company?
Not just one Salesman, but 2 or 3 within a short time span of several weeks.

The company problems

Something must be wrong:
  1. The commissions you are paying are way to low
  2. The products or services are bad
  3. The after service is bad
  4. Training or support is barely existent
  5. Your products are outdated
  6. The company has no (more) vision
  7. Brand name has gone down the drain (various reasons)
  8. The resellers need to take too much inventory
  9. The products are too complex to explain: too much effort for the benefit
10. The implementation is not easy and your resellers have a hard time to invoiced them
11. The products are more difficult to sell than those of the competitors
12. The work pressure is too high compared to the income
13. The price is too high compared to the competitors
14. Management is mainly busy with themselves instead of the company
15. The Finance dept has taken over the company and business has become secondary
16. More pricing list changes per year than the channel can deal with
17. The pricing list has become more complex than the manual of the product
18. Administration consumes more time than prospecting and selling

Any of these reasons is a fundamental problem for the company. Each of them is hard to overcome and to change.

Salesmen are like sole traders

Sales people act as sole traders or entrepreneurs who sell their skills and services to their employer. They will work for best employer they can find at the best price (not necessary for the least effort).

When the business is no longer interesting your Salesmen will start looking for other opportunities and change employer when they see a good opportunity.

The last call for your company

When your sales people are leaving your company, it is indicating the problems have become significant and it is probably almost too late: it’s your last chance to make changes or to change course.
Of course you first need to understand the problem.
If Salesmen are leaving your company it is like the last call as without Salesmen no revenue.
In order to make the problem even worse: your best Salesmen will leave the first as they are the best in selling themselves.
Your company will be left over with the leftovers in Sales.

Are any of these signs apparent in your company?
Any other reasons for quitting to add?

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The human touch

If you are an online business you are faced with the problem of telephone calls. Even though your entire business can be handled by your website and email there will always be customers that want to speak to you directly.
- They want to have human contact.
- They want to know who is behind the website and the service.
- They want to assure if their money is safely spend with trustworthy people.

All information is available on your website, pricing is on demand, a payment processor securely handles the payments, invoices are being sent almost immediately and support is by email.
Still some potential customers insist on have a chat or discuss. In most cases they want to discus pricing – special pricing for them.

Not calling: benefits for both parties

There are advantages and benefits for both parties involved to handle sales and support by email over a telephone call.

Telephone calls:
- Are interruptive for both customer and vendor
- Require immediate reply or queuing if no solution available
- Specific questions require the specialist to be available
- Single language (most likely)
- Verbal explanations are more difficult to understand than written
- Verbal explained solutions are likely to be forgotten
- Open only during business hours – if no outsourced call center
- Are hard to log, track and search
- Indicating or guiding to a webpage for information is cumbersome
- Are more human
- Costly: (international) telephone costs, work hours and availability

Email follow-up system:
- Is efficient – no interruption
- Can be handled by the most appropriate person
- Clearly stated responses and solutions
- Multi language
- Allows for forwarding the reply to someone else
- Can be printed and saved for later use
- Open to receive all day – Open to reply during business hours
- Not sending auto-reply answers
- Indicating a webpage for additional information is simple
- Replies within 12 hours (max. 24 hours)
- Lower cost: the medium is free: email, writing time and when suited

Online chat
Online chat combines the best parts of both solutions:
- Live
- Only to be used for customers – avoiding the vendor calls
- Can be logged and tracked
- Explains clearly as it is in writing
- Indicating web pages is easy
- No communication costs – still work hours

Our experience

Of the total number of calls Engago Technologies receives 96% are vendors trying to sell their services to us. This costs time and isn’t improving our business immediately.
In order to approach demand of customers we have installed a chat system on the website.

Or should the potential customer prefer a 24 x 7 outsourced call operating center service ? Having people operating far away from the real business and not really related to the business?

What are your experiences ?

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