Don’t sell technology

This week, Howard Thomas our Head of Marketing writes about not selling technology....

I love technology. I have spent my career working with it, whether it be access systems, ASIC design, optical transmission systems or more recently in two technology based start-up companies. I have been in the design side as well as the Product Management of Technology and it’s all been a blast.

The pace of change and bewildering array of technology means I struggle to keep up.... I-pad, I-phone, I-don’t know what, Twitter and the really popular BookFace which everyone is using. In fact I love that you can’t really keep up with it all – we do well to keep up with some of it.

However, one of the things that I do note as I look at the ads in Tech magazines and technology companies web sites is that tech companies often push the technology (features).

Sounds a little odd doesn’t given what I have just said but what I want to know is what will all this lovely tech stuff actually do for me?

Many tech companies are in fact poor at marketing. They talk about fancy features and give them even more confusing acronyms for example Sony's XR400 motion flow technology.....totally meaningless twoddle.

Examples are everywhere. Sexy technology that runs this operating system, or does more mega-flops than an inebriated amateur diver is all well and good – and if you’re a tech head I’m sure it’s all very interesting. BUT… what does it do for the end user?

You know, the poor person who is actually the customer. Yes that’s right, the individual who actually splashes his or her hard earned cash on this wonderful product – what benefits does it deliver?

If the product doesn’t deliver any tangible, measurable benefits then what’s the point? But of course the vast majority of products DO deliver benefits but the company’s marketing just doesn’t make it clear. But boy can you read about the technology. And as for those mega-flops….

As a Product Manager I got into the habit of asking the tech-heads the “so what?” question. It would go like this.

Tech Head:   “This device can send 5 gazillion bits down this ying-yang”

Me:               “So what?”

Tech Head:    “Well we can squeeze more into the ying-yang”

Me:                “So what?”

Tech Head:     “Well it improves the utilisation of the ying-yang”

Me:                “So what?”

Tech Head:     “Well it lowers the cost per bit down a ying-yang”

Me:                “So what?”

Tech Head:      “Well a new ying-yang is mega bucks – they dont need to buy another one”

The point I’m making is that all this technology must have a purpose. It must bring some benefit to the customer – in this case the benefit is lower cost and the value is it avoids the need for new investment in expensive ying-yangs .

The “so what?” question is a tad old now, and maybe it’s gone out of fashion but it really is important. I think there are many companies – not just those in the high tech sector - who should ask themselves this question. A business needs to be really clear on what they are selling and why customers buy what they are selling.

Another way of looking at it is to ask a slightly different question. I was speaking with an Angel Investor recently about a Music Technology product that is being developed by a small start-up company that I was working with. I thought I’d clearly outlined the benefits – my 30 second elevator pitch was very polished... or so I thought.

He then simply said this: “What problem does it solve?”

Like the “so what?” question, this can help focus the mind and we would all do well to remember this.

Customers dont buy features, they buy the value that benefits deliver. Value to customers is when a feature has value. If the customer has lots of unused ying-yangs the benefit of lower cost per ying yang will probably not light their fire!

2012 Technology Trends

This week I was searching on  the web to see what the technology mega trends are. I want to make sure I have the right tech to sell after-all. Disappointingly no-one seems to have done the thinking for me. Even the "smartest guys in the room" had a disappointing report focusing in on random transient tech.

So I've pulled out my crystal ball - well ruler really as I'm more into extrapolating, to share  my strategic view on tech trends.

1. Power
The world seems to have insatiable demand for data. All these blogs, tweets and billions of new web pages need to be stored somewhere. That storage needs power. Cloud means data centres are getting bigger. Google, Rackspace etc are building their data centers in the not so high tech state of Oregon.

Why?

Cheap power, mild climate and tax breaks.  Oregon has hydro electric power hence cheap power. Mild climate means less power for air conditioning/cooling.


For years power density of equipment in data centres has been a problem and the percentage of power needed for cooling has steadily risen.  Equipment power density continues to rise - the good news is work done for power is improving. Only challenge is we want more things done.


If companies in the USA are being forced to locate data centres in tech deserts simply to exploit availability of power then it is reasonable to assume this trend will only get worse. How long before Google become derivatives traders in oil and energy commodities simply to secure their source of power?


Any tech which reduces energy consumption in data centres has a future.


2. Wireless
Poor old Intel and Microsoft have a problem. Tablet/smart-phone sales (using ARM, MIPS, android or iOS) have overtaken PC sales. There's no old school tech inside.


The challenge to the old giants is not the only thing here. These devices are wireless and they dont have much storage. So for my first trend - wireless. 


You might have noticed but generally smart phones and most tablets dont have an Ethernet jack and in my case I havent got an Ethernet jack in the bathroom anyway and I also use mine on the train too -  the cable isnt long enough either. I therefore tend to rely on WiFi or 3G (soon to be LTE).  

So as more people buy these devices there are more-and-more things on wireless. I dont live in a particularly densely populated area but the number of WiFi APs near my house has quadrupled in 2 years. Given most of my neighbours are old this means there are lots of silver surfers.... 


All these WiFi APs are now making my WiFi less reliable since it is getting cluttered. Given I have about 20 devices on my AP (ie a legacy) it is not feasible for me to easily migrate to the less popular 3.5GHz WiFi to escape the noise.


If the trend continues, WiFi is going to collapse under it's own popularity.  


Any tech which makes WiFi more reliable has a future.


Whilst I'm on the subject of WiFi, it really needs some structure. I find it great as a home technology but it needs some serious rethinking as a public service. It needs proper roaming and why would I pay BT Openzone £5.99 for 90 minutes when I can use 3G which costs me £5 per month ...


So that brings me to mobile. 3G mobile Internet is great and LTE looks like it will be even better (except probably battery life). However the operators have a problem.  If people are ditching their computers then that means they are doing more on their phones/tablets. Great for sales in the short term but it does mean traffic demand on the mobile networks will continue to rise.  There is already a major shift in traffic type from web browsing to watching data hungry videos on phones which is creating a step change in data volumes. This means investment. However more traffic doesnt equal more revenue or more profit for the operators.


Besides the problem that wireless has a finite capacity and all these devices will consume that capacity, the cost per bit transported is not falling fast enough. Something has to give. Unfortunately the likes of Google and Apple have done such a great job of eroding mobile operator profits from value added services that ironically they are choking to death the very companies that they depend upon.


Prices need to rise (unhappy consumers), suppliers need to come up with ultra low price tech for lower cost per bit or the operators need to figure out how to exist on very low margins.


I predict that this will reach crisis point and bandwidth eco-system will collapse (probably taking modern society with it for a while). This will force the introduction of a flow of cash with the flow of data - something which old world telephone calls had but the internet hasnt got.  Companies like Facebook, Twitter, BBC, NetFlix will start to have to pay for the bandwidth end-to-end their customers are consuming.

3. Storage
Demand for data storage continues to grow. Increasingly we are storing our data on the cloud (whether we know that since the apps on our tablets do it automatically anyway).  Hard-disks still get bigger. 3 tera bytes drives are becoming the norm.  However hard drive technology is starting to reach the limits. The trusty magnet has taken us a long way but the problem is size of the magnetic particles is reaching some physical limits. The most recent solution has been to flip the magnets orthogonally so the cobalt magnets on the disk platter are vertical allowing the next step change in storage.  There isnt an obvious next step. Increasing magnetic hard disk sizes will come to  a halt in the next few years.  Solid state drives are orders of magnitude smaller than magnetic hard-drives and probably wont catch up in the same time frame that magnetic hard drives reach their limit.


Unless there is rationing of tweets something has to give. The solution is more hard-drives.  Data storage density will reach a plateau and more hard drives will be needed - the cost per byte wont fall. Data centres will need more power for these hard-drives - they wont be able to rely on the falling watt per byte trend.

If anyone knows of any great new storage technology (such as molecular or genetic storage arrays) let me know - it sounds exciting new tech to invest in.

 4. Processors
Today's processors have a problem - the real world is just too slow. The CPU cores today are usually far faster than the peripherals or indeed the I/O on the chip. Why is this a problem? Well it does mean that computers need to become more parallel. We have already seen this trend with multi-core processors. Today's super computers are in-fact massive distributed systems.  It is getting harder to build computers that "scale-up". It is often far easier to "scale-out" than "scale-up"- use lots of relatively inexpensive computers in parallel. Google adopts this approach for example.


Developing systems which are massively parallel is an important trend. Processors will get more cores but it does mean a paradigm shift in programming. Most programming languages are not well suited to exploiting multiple-cores or multiple machines.  


Programming languages like Erlang, Scala will therefore rise in popularity as a result.


Enough typing for today.  Next week I'll cover Payments, Networking/Bandwidth including home networking, Internet of Things and security.

The Sales Dating Game – The first date

I've always thought Sales is a lot like dating. Not the transactional selling you find in shops but the complex protracted sales process of selling anything remotely complicated. I did think of an analogy for transactional selling but its probably best not to mention it.

If you wind the clock back to your teenage years when you first wanted to find a girlfriend you devised a plan to get one. The first step was realising you needed to be where there were girls. If you were really lucky your sister would bring her girlfriends to your house creating a captive audience. But for most of us it meant hanging out in bars, clubs etc. In sales the same is true - “we need to be at this trade show – all our prospective customers are hanging out there”.

When you got to the club (sorry trade show) you stood nervously around looking at the girls (sorry prospects) not quite sure what to do next – naievely assuming being there would be enough – you didnt have a sales plan of who you wanted to target and how to get their attention.

Irritatingly there always seemed to be some guy who stood out and the girls wanted. In fact the competition for the interest of the “hot guy” seemed to get him even more girls interested in him. Here is another sales lesson – you need to stand out to get customers to come to you and in fact the more customers that are interested in you, the more attractive you become.

For the majority of us we stood around nervously waiting to pluck up the courage to approach a girl (sorry customer) or waiting for a prospective customer to look in our direction. It is always interesting to see some booths at the trade shows where the boys are huddled together in their booth too afraid to make the advance – as the show comes to a close and the last dance starts to play they look sullen, withdrawn and rejected.

Some are brave enough to venture from the safety and security of their booth and approach some girls (sorry customers) with their one liner chat-up lines, with similar levels of success it must be said to my bar and club one liners. The girls (sorry customers) have a picture in their mind of what they want – they might need you but you're not what they want. Here's an important step in dating (sorry sales) you need to interrupt their thought process to stop them thinking about what they want. Confusion is a good strategy for breaking their thought process for a few seconds to get their attention. Hesitate and their old thought process resumes and your toast.

Some girls (sorry customers) might be interested to hear about your Ferrari (what's in it for them is to be seen in a Ferrari – so does that mean they are really going out with the Ferrari or you?).

Some girls (sorry customers) have a specific problem they need solving so are more receptive to solutions that might present themselves. “I'm a teenage single mum – I really need someone to look after me....he looks alright, might have a bit of money, a job and a car...I'll take him”. Not a great deal of selling there, you just happened to look a reasonable fit to their needs.

As your sales experience improves, and you are more confident doing the initial approach (sorry cold calling) your tolerance to rejection improves. There's plenty more fish in the sea – it's just a numbers game – ask enough girls for a date and you'll find some that want to place an order.

You're meeting your quota but you're boss (sorry mum and dad) is not happy with the quality of deals you're bringing home. They really want you to find the big life changing deal.....

To be continued.

Networking vs selling

Is networking a substitute for selling?

Business networking groups such as BNI, BRX are geared up to help their members get new business. Business networking is where groups of like minded individuals meet with a goal to help each other out in business.

So is networking a substitute for selling? In today's cluttered market-place where buyers are usually unreceptive to selling advances, it looks like networking definitely has a place in today's selling landscape.

However the selling landscape is a complex one. There are millions of products and services on offer. There is a vast spectrum of products from commodity eg florists where the buyer is familiar with what is on offer through to complex industrial products such as bio-digesters where there are relatively few customers on the planet.

Non specialist business networking events are well suited to relatively low value commodity like purchases such as holidays, accountancy services, legal services etc. Firstly the general population are likely to be consumers of services associated with the members whereas it is unlikely that many will want to buy a bio-digester plant. Secondly networking members can provide referrals since their will recognise the opportunity and understand the offer enough to qualify the prospect in order to make the referral. End result is well qualified leads.

In general the level of selling sophistication for selling these types of services is not high – the buyer wants to buy but the question is whether the supplier is a perceived as a risk or not. The part of the sales cycle that business networking supports is matching the buyer's need for a service provider with an awareness of a “trusted” supplier of a service. Networking therefore replaces part of the early sales cycle but it doesn't eliminate the later stages of selling such as closing. The lead could come from a trusted relationship or recommendation so the buyer will perceive lower risk with the buying decision.

However in more complex sales, particularly in a business-to-business context, networking provides little more than a warm lead who is willing to explore – for the sales person this is a great alternative to cold calling. It does not however replace professional selling practices such as SPIN selling: understanding the customers need, what business value they place on satisfying the need and demonstrating how the need can be satisfied.

Given everyone is bombarded by selling messages, is networking going to become the de-facto lead generation machine? For commodity products, business networking should be a very cost effective alternative to cold-calling or advertising. Referrals from trusted sources whether face-to-face or through social networking sites are likely to increase in prominence in the coming years- word of mouth has been effective for millennia and networking is just a variant of it.

For complex industrial sales, non specialised networking events are likely to be a waste of time. Business is about relationships so there are few alternatives to that face-to-face touch. Just like marketing, the networking events need to be on target – often specialist conferences are the right forum but may not have the explicit and open structure of a network event to foster deal trading. Today there are relatively few specialist networking events. I am considering setting one up for high-tech/IT networking in the UK – if you would be interested in attending, ping me.

As it gets harder to get the buyer's attention, it is likely that there will be an increased proliferation of specialist networking organisations emerging to cater for the face-to-face need to build relationships and do the sale. Unlike the BNI like events, involvement with the specialist networking group may involve a long haul waiting for the right opportunity to emerge – how often do people want to buy a bio-digester after all?

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