In the days of minis and mainframes, technology marketing focused on selling solutions to overcome customer problems. Over the years, however, technology companies have moved away from solving customer problems with customer-oriented solutions in favor of an engineering approach focused on technology. A technology and pricing focus largely drives even the best marketing-driven programs. This month we will look at the cause of this shift, the problems it has caused and the route back to successful marketing.
The advent of the PC initiated the focus on technology. In the eighties, the often-used adage was, "If you build a better mouse trap, the world will beat a path to your door." When competing on technology no longer worked, companies started focusing on price. Then, more recently, the technology world discovered "brand awareness," a marketing approach long used by consumer packaged goods (CPG) companies.
These four areas of focus technology, performance, price and brand have come to permeate the entire industry. Although initiated in the low-cost PC arena, these drivers have also affected companies selling high-end systems. Even IBM, which mastered the art of selling technology solutions, got caught up in the "who has the fastest, most powerful technology game" and subsequent price war.
This shift has been the biggest cause of fallout in the technology arena. The following illuminates why.
Focusing on technology does not increase its acceptance among new users or for new uses. IT may be excited by the latest and greatest technology. But the technology approach overlooks the vendors' and IT's ultimate audience the end users. Richard Branton, vice president of technology with Advanced Strategies, supports this, "The IT people are pushing data warehousing on the end user. But often it has no sponsor in business, no one to use it."
In many cases, end users are bypassing IT because IT often does not understand their needs. It seems to take too long for IT to implement solutions that are of value to the end users. One outcome is that end users are bypassing IT and creating their own data marts, proliferating disparate systems around the company. With the availability of enterprise-wide solutions, this should not be occurring. Many successful IT executives and vendors involve their end users in the adoption process and make them integral to technology selection and implementation.
Brand awareness, in and of itself, does not motivate end users to try new and unknown technology. Technology companies tend to shortcut the crucial steps necessary to establish a strong brand, including in-depth research to identify customer issues, perceptions and needs. Only when the customers are understood can branding be applied effectively.
Technology innovation and low price do not increase the adoption of technology. Selling on price alone is a dead-end street. You cannot lower the price enough to get people to use technology. Companies that sell technology based on its capabilities and price instead of solutions may make sales initially, but the process is very slow and more challenging than it needs to be.
Low price on high-end software eliminates the margins necessary to provide required customer service. Data warehousing vendors often believe, mistakenly, that their customers have the internal resources to deal adequately with the pre-sales selection process and post-sales implementation phase. This often is not the case. Lack of service equates to lack of use by end users. This approach does not establish a growth path for repeat business, because repeat business depends on satisfied customers who use the technology.
We are coming full circle in the marketing cycle. The astute technology companies are going back to solution selling. Why? Because that is the only thing that truly works. With Y2K being such a major issue, the best way to be included in corporate budgets during the next two years will be to elevate products from the technology level to that of "strategic solution." The following successful companies support the value of a customer-oriented solutions approach:
"We need to be much closer to the customer. We need to speak their language." Paul Wahl, former CEO, SAP America, Inc.
"Customers appreciate it when we understand the issues unique to their industry." Pat House, co-founder and COO, Siebel Systems Inc.
Data warehousing may have met an immediate corporate (IT) requirement to adopt the latest and greatest. But, end users must be included in the adoption process for implementation to be successful over the long term.
Data warehousing's long-term success hinges on a customer-oriented solutions approach. The solution lies in understanding the end-users' technology adoption requirements. Meeting their requirements includes providing the necessary service, e.g., understanding the end-users' business functions and needs, speaking their language, providing adequate resources to support their selection process and offering follow-through implementation. This follow-through provides end users with much needed assistance in getting the system installed, set up, converted and learned.
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