The major Indian vendors who provide IT and BPO outsourcing have flourished in the North American market in recent years. Hundreds of smaller companies have jumped in to the market to follow in their wake. However second-tier companies that give prime importance to branding and marketing are doing much better than those simply trying to imitate market leaders with a “me-too” sales process.
Indian exporters have mastered execution and delivery. Most of these Indian vendors that I meet also understand how to “sell” in the global environment. But executives at these companies pay scant attention to branding and marketing; perhaps they believe that such activities are suitable only for consumer-oriented ventures. In making that assumption they hobble their sales teams into pushing too hard on price; this limits not only margins but also opportunities. Adding internally directed qualifiers like ISO 9000 or CMM certification are not enough. These processes are important for delivery but are at best a crutch in your marketing strategy.
Colorado-based Echostar Communications has over $5 billion in sales and 15,000 employees. Their former CIO, Ed Allwein, affirms, “Marketing is the strategic imperative for offshore companies. Once I’ve decided to go offshore, price isn’t a significant consideration. I have already got the offshore discount, so quibbling about whether I am saving 40% versus 45% isn’t very important compared to ensuring that my dollars won’t be wasted.” Allwein is now CEO of Active Sensing and is getting his software built in Delhi.
During my sales and marketing career in the USA over the last two decades, I have sold successfully to Sony Corporation, the Walt Disney Company, Verizon Communications, Viacom, Ford Motor Company, Toyota and many other mega-corporations. Selling is a challenge under any circumstances but good marketing can be the wind in your sails that propels your sales efforts past seemingly insurmountable obstacles and into safe lagoons of high margin and high loyalty services.
Segment the Market
One early step in marketing is focus. You have to decide what you excel at, based on a deep understanding of the structure of the market and how your own strengths match market needs. Find such “sweet spots” where you can quickly build a premium for your brand and a position that cannot easily be duplicated by anyone else, even IBM and TCS.
Let me give you an example. Some years ago I ran a software product company in the healthcare space. Our competitors including a subsidiary of a Fortune 100 company that probably spent more on napkins each day than our annual marketing budget. Another small competitor offered more software features than anyone for one-fifth of our price. I could not outspend the market leader or under-price the low-end player, so I decided to outsmart them with market segmentation. Most of the competitors already segmented the market by specialty and offered modules for emergency care, radiology etc. After considerable analysis, I decided to segment by size of company and focused my attention on the 500 biggest customers in a market of 22,000 prospects. I could not afford to brand our company to 22,000 prospects but I could use direct marketing to become quite cozy with these 500 Prime Prospects.
Too often vendors from India approach me who are ready to sell “anything to anybody” and ask for my help, “We can beat Wipro by 15%” they tell me. It seldom works. Smaller vendors don’t need to find a 100-seat process to make the economics work; perhaps they can string together a series of 10-seat processes to create a profitable relationship.
Know Your Prospects
Back to my story: for the next 12 months, each Prime Prospect received a weekly piece of direct mail from us. I also had my most experienced telemarketers spend 20% of their time calling these prospects to learn more about each of them. We supplemented this personal contact with third-party research and built a rich database. We could only afford one trade show a year and each Prime Prospect got a personal invitation with a promise of a free gift if they filled out a simple form and brought it to the show. We never pushed to make a sale, but did offer helpful information about computers and software. Prospects began to see us as familiar and we rapidly began to win their trust.
Achieving successful and sustainable sales follows a very predictable funnel pattern. First, the prospective customer has to become aware of you. Next they must connect your company or service with certain specific messages or emotions. Next, you must give them the opportunity to associate favorable characteristics with your services. Then, and only then will they seriously consider buying from you. Without these intermediate steps, you might often be the bottom player on a triple-bid process where the buyer never gives you a serious chance in their mind.
Tailor Your Service
Many of the biggest Prime Prospects had the need for special reports, because of their size or complexity. We custom-programmed these reports for little or no cost at first. But those who needed such reports never even considered our competition. The prospects perceived us as the ONLY company who could meet their unique needs.
In order to offer such tailored services, you must gain as much customer knowledge as possible.
Charge a Premium
We learned quickly that these Prime Prospects also had unique software needs and our programmers were readily able to program these features; we began offering high-end versions of software at 30% higher price points. We also learned that entry of data was a major barrier in their considering an enterprise-wide computer system. So we added an onsite date-entry service. Our profit from data entry often exceeded the price of the software at these prime prospects. And my competition was oblivious to my successes.
While we recovered our initial investment in marketing over the first few sales, the best part of the story is that serving the Prime Prospects created a virtuous spiral where these well-respected clients would point many smaller customers to us. We were able to win business from these other clients since trust was pre-established. We went on to define and dominate three other segments that did not exist in my competition’s landscape.
Smart marketing works in most situations. I recently used such marketing in approaching the Hollywood movie studios where there are only six major customers. Smart marketing enabled us to win five of the six. The competition, using a price-driven approach won a low-margin contract with one studio. Last I heard, the competitor was being squeezed to provide additional onsite services without raising prices. Which vendor would you rather be?
Indian vendors can multiply their American sales results by investing in Marketing as a distinct effort before jumping into Selling. It does take some time and cost up-front but it offers the promise of higher margins and much better customer retention.