The world is full of start-ups touting technological breakthroughs and innovations. But a substantial majority never make it to the big time, especially not as independent companies. This is particularly true in research-driven hotspots such as Cambridge.
Why is this? A lot is down to a lack of understanding of the importance of marketing and sales, with tech-led founders believing that having the best technology is enough and will bring buyers flooding in. Therefore, they reason, there’s no need to focus on disciplines like marketing as the product is so good and so advanced that it will simply sell itself.
Clearly, nine times out of ten this is never going to work. As Tony Wilson discussed at this week’s Cambridge Marketing College Brainfood for Breakfast event, the uncomfortable truth is that “nobody is going to buy your stuff.” For a start people don’t like spending money, particularly in B2B, and are normally happy doing what they’ve always done – you don’t tend to get fired for sticking to the status quo.
Obviously there are ways that you can get people to buy your stuff, as Tony explained, but you’ve got to meet one (or more) of these three conditions:
1.Their business is better off after buying it
You can’t sell a product on its own. It has to solve a specific business problem and therefore deliver a quantifiable benefit. That could be speeding up a process (such as getting a product to market), or increasing efficiency. Essentially, to borrow a phrase from Clayton Christiansen, you need to help them with their “jobs to be done”.
2.Their customers’ lives are improved
Its an obvious fact, but businesses rely on customers for their survival. And in an era of rising customer expectations and ever-expanding choice, consumers are very happy to move elsewhere if a business isn’t providing what they are looking for. So your product has got to deliver benefits that help your customer’s customer in some way, shape or form.
3.They can differentiate from the competition
The other thing that keeps CEOs awake at nights is the competition. How can they differentiate their business while preserving margins? We’re increasingly in a winner takes all world, where premium brands can charge much more, leaving their competitors to scrap amongst themselves for higher volume, but lower margin business. Smartphones are a case in point – Apple, and to a lesser extent Samsung, can set high prices, confident that loyal consumers will see the value they deliver, while rivals are forced to discount. Each handset is broadly similar in terms of what it does – but it is differentiation and a focus on the customer’s needs that allows some brands to charge more. So, how does your product help companies to differentiate themselves from their competition?
It is clear that tech companies, particularly in B2B, need to focus on the needs of their customer, and their customer’s customer. But many don’t do this – or even understand how their product is being used or the value it is providing. The answer is simple, but does require marketers and sales teams to change how they operate. As Tony Wilson points out, you need to go out and talk to your customers, embed yourself in their world, understand their pain points and how you can solve them. That might mean revamping your product or bringing in additional functionality or partners to deliver this – but by providing a solution to a problem, you’ll increase sales, boost loyalty and preserve margins. The question is, are technology businesses ready to really listen?
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