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industry focus

Watching some of the new ventures getting funded over the last several months, there’s an interesting trend that’s turning user-generated content into real value for companies and their customers.

One example is Driveway Software, which develops applications that insurance companies offer to their customers.  The apps track driving behavior, and enable the insurer to offer discounts based on good driving habits.  In the healthcare sector, companies like AFrame Digital and Lark are creating devices and apps that enable doctors, care-givers, and individuals to track patient health and provide better, more personalized care.  FlixMaster collects information about how we watch interactive on-line videos so that media companies and advertisers can create more engaging content.

While the content in these instances is “user-generated,” all the work is being done within machine-to-machine interfaces. User devices or apps collect information and communicate with data collection and analytics engines to produce both individual and aggregated intelligence. That intelligence enables companies to offer new and unique products and services.

For each company that collects and uses customer-generated data intelligently, there are scores who collect data but never use it.  That’s not only a waste, but also an unjustified risk – keeping customer information without carefully managing it can have legal ramifications and expose the company to liability.

Bottom Line:   There are countless ways to collect data about your customers.  Before you start, decide exactly why you’re collecting it, how you’ll manage it, and what intelligence and action the data will drive.

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I bet you already have a long list of launch announcements and product training sessions for your 2013 sales kickoff.   That’s important information, but it’s not enough.

If your sales people are still having difficulty engaging executive and business audiences, even after that expensive solution selling training you invested in so recently, it’s because they lack a good alternative to the product-centric pitch.

Executive audiences – whether IT or Business – don’t need your sales people to recite widely-known industry trends as an intro to the product pitch.  They don’t want to waste a meeting hearing information they could just as easily find on your website.

They DO want

  • To see that you understand their business, in-depth
  • To hear new insights about how to apply technology to grow their business
  • To experience what it’s like to collaborate with your company
  •  To be able to justify their decision to work with you

That means your sales people need a new arsenal.  Here are some changes you can make in time for Sales Kickoff:

  • Throw away the PowerPoint.  Replace presentation slides about industry trends with interactive discussion guides about customers’ objectives.
  • Ask Insightful Questions.   Your sales training and tools should provide lots of open-ended questions that intrigue customers, demonstrate sales reps’ expertise, and help discover what’s really of value to buyers.
  • State a point of view.   Give Sales something unique to say that customers haven’t heard from everyone else: Make some bold statements, show a distinct approach, or share a new perspective. Challenge common knowledge or the status quo.
  •  Tell Stories. Replace recitations of product benefits with use case-driven value stories.  Provide sales people with stories that illustrate how you have helped similar companies (and will help them) create tangible business results within specific use cases by leveraging your unique capabilities.
  • Brainstorm.   Turn sales meetings into collaborative brainstorming sessions by enabling sales people to discuss many options and approaches, point out the pros and cons of each, and explain how they fit with other products the customer is likely to need.
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When you are promoting something to clients because its been proven to work, its healthy to keep a lookout for exceptions.

Industry-targeted initiatives are a big theme in my work. I tend to promote specialization (of marketing, solutions, sales, etc.) as a path to B2B sales growth, a fact backed up by experience and extensive primary research.   But I’m a contrarian by nature, so I’ve been looking for situations where it just ain’t so.

I found one in the clouds.  Computing clouds.

The core value of cloud computing is that a utility model aggregates demand for computing resources across many users, creating a smoother demand curve than any single user can have alone.  Which in turn allows cloud and managed services vendors to provide the resources more efficiently, with better utilization, and (so the claim goes), greater reliability.   This concept is as old as Edison’s first electrical plant.  Supply electricity to the cable cars with strong usage in the morning, the factories that run during the day, and the homes that need power at night, and you get a uniform demand throughout the day, despite fact that each segment individually creates a peak.

That’s why, if you’re offering resources in the cloud, your value is in having a diverse and balanced customer base.  A service provider with too many retail customers, for example, is going to find themselves in a heap of trouble come November.

So how do cloud providers get a deep understanding of their customers without focusing in on target industries?  A few initial thoughts:

  1. Understanding customers’ industries is still important for defining value to customers
  2. Providers acting as utilities must pick multiple segments at once – specifically ones they have very different usage profiles
  3. If a cloud operator doesn’t have the resources to dive into multiple industries at once, it should keep to horizontal marketing and sales

This is probably the most difficult for those at the top of the cloud stack – the SaaS vendors.  Apps are less generic by definition than infrastructure and platforms.  So I’m very curious to know what strategies SaaS vendors use to keep their demand smoothed out.

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What advice would you give small companies trying to prioritize target industries?   Robbie Baxter of Peninsula Strategies, an expert in on-line, recurring revenue streams, asked me a this very interesting question!

At companies with a sales history, industry-specific activity and resources are focused in two kinds of areas:  Where most revenue is coming from already (this is by far the more common focus area), and where there is greatest opportunity for growth in the future.    There can be lots of complex analysis, but in reality few big companies do much proactive planning.  That’s a whole other blog, though.

With a smaller company, the first part of that equation is missing. They don’t have the sales history, references, and channels to naturally leverage into an already-active vertical market.

So, here is a try at some things I’d look at as a small business deciding where to focus.

1. What industry will value what you do most? Where will you impact mission-critical results?

2.  Over time, what group of customers are going to be needing you more and more (and feeling increasing pain you can solve) due to external pressures and trends in their industry?

3. Where are you best able to access the financial decision-makers? (This is a combination of your company’s existing connections and lists, and the target industry’s propensity for doing business with small companies.)

Note that its easier to find ways to reach financial decision-makers than to change the core value of what you do or convince an industry to focus on non-critical issues.  Unfortunately, many small companies start with #3 as the first, not last criteria for selecting target markets.

Please comment with your own thoughts on selecting target industries at small companies.

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