This strategic white paper, published in 2012, shows that to be successful in today's fast-changing world, technology companies must not only focus on developing their R&D and sales activities, but they must also improve their marketing capabilities.
It examines diverse commercial challenges that growing tech companies must face as they strive to become market leaders, and the crucial role that marketing plays in helping them generate value and growth.
No-1 Call Girls In Goa 93193 VIP 73153 Escort service In North Goa Panaji, Ca...
The path for creating customer value and business growth
1. merkadoservices.com
THE PATH FOR CREATING CUSTOMER VALUE
AND BUSINESS GROWTH
INTEGRATED MARKETING FOR
TECHNOLOGY COMPANIES
Author: Juan Carlos Sanchez
Advice | Assistance | Methods
2. 2!
merkadoservices.com
EXECUTIVE SUMMARY!
TECHNOLOGY COMPANIES: DEVELOPING IN A VOLATILE AND UNCERTAIN WORLD!
To succeed today’s tech companies must focus on more than R&D and sales!
Today’s technology leaders also lead in marketing!
Marketing-focus helps today’s tech leaders generate sustainable value in terms of sales,
profit and growth!
To develop, growing tech companies must adopt a strong customer and market focus!
GROWING TECH COMPANIES: THE COMMERCIAL CHALLENGES ON THE PATH TO
MARKET LEADERSHIP!
Designing products with cross-customer appeal!
Finding clients and generating sustained demand!
Selling at the right price!
Entering new product areas and markets!
Accessing new skills and resources to fuel sustained growth!
Managing cash flow while effectively investing in growth!
MARKETING HELPS COMPANIES CREATE AND CAPTURE CUSTOMER VALUE,
FUELLING GROWTH!
Marketing is often a misunderstood discipline!
…yet marketing plays an essential role within organizations!
Compared to a product-focused strategy, marketing-focus delivers customer value!
Marketing: 5-steps to value and growth!
MARKETING SUCCESS CASES!
TFS achieves 2x client growth rate in first 9 months after the launch of new SaaS offer!
OneAccess captures €300k contract with customer business value-driven white paper!
THE WAY FORWARD!
4. 4 The path for creating customer value and business growth!
merkadoservices.com
EXECUTIVE!SUMMARY!
To be successful within today’s fast-changing world, technology companies
must not only focus on traditional research and development and sales
activities, but they must also improve their marketing capabilities.
In particular, small and mid-sized companies face a variety of commercial
challenges as they strive to become market leaders. For such companies, in
addition to maintaining their focus on technology, they must also adopt a
strong customer and market focus to generate more value.
Marketing plays a crucial role within tech companies by helping them better
understand the marketplace; identify the best opportunities to target;
offering inputs for designing and creating customer value propositions, and
presenting effective ways to serve and satisfy clients, building lasting and
profitable customers relationships in the process.
When done right, effective marketing delivers measurable business results,
including:
Recognizing new, viable business opportunities
Reaching clients in new and effective ways
Capturing additional customer revenue
Creating net customer growth
Developing client equity
Without a continued investment in the right value and growth-driven
marketing strategies and the associated resources, growing tech companies
will miss many valuable and important opportunities waiting to be seized.
6. 6 The path for creating customer value and business growth!
merkadoservices.com
TECHNOLOGY!COMPANIES:!DEVELOPING!IN!A!VOLATILE!AND!
UNCERTAIN!WORLD!
Until the early ‘70s, at the start of the PC era, to be successful, information
and communications technology (ICT) companies focused primarily on
developing, building and delivering new technologies to a growing market
of receptive clients looking to benefit from high-speed computing,
automation, increased productivity and new ICT capabilities.
With the growth and related falling cost of computing power, the rapid
evolution of the Web along with developments such as rapid product
design, agile software development, flexible contract-based development
and manufacturing, SaaS1
-based resources, and the growing reach of
broadband connectivity, the investment needed for new companies looking
to enter the technology market has fallen significantly. Furthermore,
technology development cycles have quickened; competition has increased,
and regional and global markets have become more accessible. This, along
with other factors has made market conditions more volatile and uncertain.
To! succeed! today’s! tech! companies! must! focus! on! more!
than!R&D!and!sales!!
To be successful within today’s fast-changing world, technology companies
must not only focus on traditional research, development and sales
activities, but they must also excel in quickly understanding and satisfying
customers better than their competitors.
In today’s volatile world successful technology companies are those best
able to identify emerging market demands and capitalize on them through a
combination of great products, services and superior customer experiences,
in a way that delights clients, helping nurture lasting relationships. In short
they must become leaders in both technology and marketing.
Today’s!technology!leaders!also!lead!in!marketing!
The most successful and long-standing companies in virtually every industry
have become leaders by consistently creating the products, services and
experiences that their customers value and trust, and engraining this
marketing philosophy within their company’s culture.
There are few sectors that adhere to the marketing philosophy more than
the fast moving and highly competitive consumer goods and retail
industries. Its leaders include companies such as Proctor and Gamble2
(food,
beverage, household and personal care items), Coca Cola3
(beverage),
1
SaaS: Software as a service
2
P&G: No. 1 global consumer goods firm. Revenue of $82 B in 2011; 5-year average net profit2
P&G: No. 1 global consumer goods firm. Revenue of $82 B in 2011; 5-year average net profit
margin of 13.7% vs. 1.3% industry average (Nasdaq.com)
3
Coca Cola: No. 1 global beverage company, present in 200 markets. Revenue of $46 B in
2011; 5-year avg. net profit margin of 20.7% vs. 5.8% industry avg. (Nasdaq.com)
SUCCESSFUL COMPANIES
ARE THOSE BEST ABLE TO
IDENTIFY EMERGING
MARKET DEMANDS AND
CAPITALIZE ON THEM
THROUGH A COMBINATION
OF GREAT PRODUCTS,
SERVICES AND CUSTOMER
EXPERIENCES.
7. Technology companies: Developing in a volatile and uncertain world
merkadoservices.com
7
Carrefour4
(retail distribution), Inditex5
(fashion distributor) and Nike6
(athletic
equipment and apparel).
These firms are all billion-dollar-a-year companies, occupying the 1st
or 2nd
spot within their industries. With a marketing-driven culture, each one
continues outperforming its competitors within in its markets and generating
healthy profit margins (usually greater-than-the-industry double-digit figures)
by adapting to, and sometimes creating, new trends and satisfying customer
demands with their evolving product and service offers.
Within the technology sector the most successful companies also stand out
in terms of marketing. Today’s global technology leaders include companies
such as Cisco, Intel, IBM, Microsoft7
, Adobe8
, Apple9
, Samsung, Google10
,
Amazon11
, and Salesforce.com12
.
These companies are among the most successful and innovative players in IT
systems and services, components, software, personal computing,
communication and media devices, and Web-based services.
Though the youngest is only 13 years old and the oldest just over a century,
each has grown from an early start-up to capture a leadership position by
chasing new business opportunities (e.g. on-demand computing, immersive
conferencing, the social enterprise, e-reading), and in some cases
revolutionizing markets (e.g. personal computing, online print and media
production, online advertising, digital media consumption, mobile
computing), by delivering innovative products, services and experiences that
thrill customers in new and exciting ways, better than the competition.
In the words of Amazon.com founder and CEO, Jeff Bezos, “we innovate by
starting with the customer and working backwards. That becomes the
touchstone for how we invent." 13
MarketingLfocus! helps! today’s! tech! leaders! generate!
sustainable!value!in!terms!of!sales,!profit!and!growth!
Through this continuous customer and market-focused innovation process
each leading firm has consistently delivered value in many ways to its clients,
in turn capturing value through sustained sales, generating healthy profits
and building its net value as a company (Figure 1).
4
Carrefour: No. 2 global retailer, operating in 38 countries. Revenue of €81 B in 2011; 2.7%
operating profit margin (Carrefour, HBR)
5
Inditex: No. 1 global fashion distributor, operating in 81 countries. Revenue of €13.8B in 2011,
18.3% operating profit margin (Inditex, Economist)
6
Nike: No. 1 global athletic apparel maker. Revenue of $24.1B in 2012, 12.6% operating profit
margin (Nike, Wikipedia)
7
Microsoft: No. 86 on Forbes’ 2012 list of the world’s most innovative companies
8
Adobe: No. 54 on Forbes’ 2012 list of the world’s most innovative companies
9
Apple: No. 5 on Forbes’ 2012 list of the world’s most innovative companies
10
Google: No. 7 on Forbes’ 2012 list of the world’s most innovative companies
11
Amazon: No. 2 on Forbes’ 2012 list of the world’s most innovative companies
12
Salesforce.com: No. 1 on Forbes’ 2012 list of the world’s most innovative companies
13 “Amazon’s Amazon's Jeff Bezos: The ultimate disrupter”, Fortune, Vol. 166 No. 9; Dec 3, ‘12
“WE INNOVATE BY
STARTING WITH THE
CUSTOMER AND WORKING
BACKWARDS. THAT
BECOMES THE
TOUCHSTONE FOR HOW WE
INVENT.”
JEFF BEZOS, FOUNDER & CEO,
AMAZON.COM
8. 8 The path for creating customer value and business growth!
merkadoservices.com
Each one of today’s industry leaders boasts billion-dollar-a-year revenue
streams, and an enterprise value14
between $US 19 B (Salesforce.com) and
$US 481 Billion (Apple)15
. Examining these firms by segment offers more
insight into their performance:
! Web – Thanks to the continuing development of the Internet and
the economies of scale it offers companies, the fastest growing, and
the youngest of these technology leaders are Web pure-plays, each
offering a range of new and innovative consumer and/or business-
focused services. Over the past 5 years this group has generated an
average revenue and income growth of 30% or more, significantly
higher than in most other sectors.
! Software & Devices - The leading tech firms offering connected
devices, software and related service have also benefited from the
growth of the Web and other related ICT trend, generating an
average 5-year sales growth of 10-35%, combined with a variable 5-
year average income growth between 1% (Samsung Electronics) and
60% (Apple), depending on the company’s chosen market and
commercial strategies.
14
Enterprise value: EV = Company market capitalization + total debt – total cash
15
EV figures as on Nov 12, 2012
Figure 1 – The business performance of selected technology leaders
Sources: CNN Money, Forbes, Bloomberg, Yahoo! Finance, Cisco, IBM, Intel, Samsung
9. Technology companies: Developing in a volatile and uncertain world
merkadoservices.com
9
! ICT Systems & Services – Today’s technology leaders selling ICT
systems, components and related services have grown steadily over
the past 5 years, though at more moderate rates of 3-9% and 1-5%
for sales and income respectively. This reflects pressures from the
market’s demand for standardized systems and increased
competition from lower-cost suppliers. It also reflects the relative
shift from investment in the underlying network infrastructure (now
in place in most major cities and regions worldwide) to the
increasing focus on developing diverse customer devices and the
growing range of services that clients use and value.
Industry leaders like these may represent less than 1% of all technology
companies, but can in some cases grab more than 50% of revenues and
market share, and take home up to 70% or more of profits within a given
market.
To!develop,!growing!tech!companies!must!adopt!a!strong!
customer!and!market!focus!
Leading companies, whether from technology, consumer goods, retail or
other sectors, generally share a number of common market and customer-
oriented characteristics, including:
Strong image and branding
Memorable and compelling advertising
An unwavering focus on satisfying customer demands
A knack for creating great products, services and experiences that
customers can count on
Constant focus on innovation and new developments centred
around (and sometimes before) emerging market trends
Broad presence within their markets and across client channels
The ability to consistently deliver a great overall customer
experience, driving customer loyalty and advocacy
Across the other 99% of technology firms, there are tens of thousands of
small and mid-sized companies trying to develop and break out into
successful, local, national and international market leaders. For such
companies, in addition to maintaining their focus on technology, they must
also adopt a strong customer and market focus if they are to generate more
value in the form of customer sales, profit, growth in clients, increased
market share, and client equity.
INDUSTRY LEADERS
REPRESENT LESS THAN 1%
OF ALL COMPANIES, BUT
CAN GRAB MORE THAN
50% OF REVENUES AND
MARKET SHARE, AND OVER
70% OF PROFITS WITHIN
THEIR MARKET
10. 10 The path for creating customer value and business growth!
merkadoservices.com
GROWING!TECH!COMPANIES:!THE!COMMERCIAL!CHALLENGES!ON!THE!PATH!TO!MARKET!
LEADERSHIP!
A technology company has to face
many challenges from its early
beginnings as a small company
producing its first set of products and
services, to when it becomes a
successful and profitable billion
Euro/Dollar (or more) market leader.
This is particularly true during the
early stages of growth, when it faces
diverse and sometimes seemingly
opposing challenges, such as:
Designing!products!with!crossLcustomer!
appeal!
Most start-up tech companies start out serving
one or two clients with a customized product or
service. It is usually developed based on a set of
characteristics matching a client’s requests and
needs, and is often the first step for creating a
commercial product or service offer. However, the
product design choices made will have a direct
influence on the company’s ability to satisfy its
later clients and compete.
For example, a software company creating the
first version of a business management software
suite for SMBs16
may be asked by a lead client to
develop a set of integrated modules. This might
include specific business applications for
managing commercial leads, new contracts and
existing customer relationships. It might also
include modules for managing the company’s
purchasing cycle, internal resources and
accounting. However, since not all SMBs will
require all modules, and each user will want to
further customize his set of options and
functionalities, the software firm should find a way
to create a common product platform allowing it
to easily deploy and manage a family of related
products appealing to a wider set of customers.
16
SMBs: Small and Medium Businesses
Such a strategy can help address evolving market
demands more easily, and lead to further
innovation andnew revenue streams by leveraging
existing brands, modules or core technologies.
The shift from creating 1-off, customer solutions,
to producing a more flexible and customizable
offer is non-trivial and requires making a number
of informed, strategic decisions about the
platform design and the product variants, based
on extensive market analysis, customer testing
and continuous feedback. Applying a systematic
customer and market-driven approach will allow a
company to capitalize on the best set of
opportunities with the lowest long term
investment. The failure to do may limit the
business potential of a great, but unique
customer solution.
Finding!clients!and!generating!sustained!
demand!
One of the main challenges for companies trying
to grow is finding prospective clients and
effectively creating demand for its offers. In
particular smaller B2B17
companies, with more
limited budgets, tend to depend more on
referrals to generate business leads, a strategy
that is limited by the company’s network of
existing contacts and satisfied clients.
17
B2B: Business to business
11. Growing tech companies: The commercial challenges on the path to market leadership
merkadoservices.com
11
As a company grows it can invest in more varied
and sophisticated demand generation programs,
allowing it to branch out further and attract a
broader base of potential clients in adapted ways.
This can include being present at industry fairs,
using dedicated information sessions, performing
ROI18
simulations or offering client trials.
Convincing a prospect to try a new product or
service is not always easy, especially if the
investment required – in the form of time, change
management efforts or financial resources – is
significant and the benefits are not easily shown.
Breaking out of situations like these requires
understanding the blocking points and designing
adapted client-focused initiatives to support
business growth by creating awareness, interest,
consideration and facilitating the purchasing
decision process from potential clients.
Selling!at!the!right!price!
Pricing is a strategic tool for companies to
communicate and capture value from clients. It
represents the value that customers will pay to
gain the benefits of a product, service or an
overall experience. In many growing companies,
the management team, rather than the marketing
or sales function, often handles pricing. As a
company grows this day-to-day responsibility may
be transferred to product teams or sales directors,
with management setting price objectives and
providing their final approval. In many industries
like mobile services, where pricing is a key
competitive factor, firms may even have
dedicated functions to optimize price decisions.
A technology company must consider a multitude
of factors when setting the right price strategies.
In general, the right price should consider the
customer’s perceived value of a company’s offer.
If they perceive that the price is greater than the
value offered, they will not buy. At the same time
a company will have a set of fixed and variable
costs for delivering its offer. If the company prices
below that level its profits will suffer.
Aside from the min/max price range, the right
product or service price must also account for
other internal and external factors such as a
18
ROI: Return on investment
company’s strategy – it might choose to compete
as price leader, to gain market share, or by
offering tailored products each at a unique price;
their product portfolio mix – prices should reflect
the various products and related options offered;
existing reseller relationships – prices should
allow the resellers to earn margins; the nature of
the economy – in a tough economic context many
clients might expect more value for the same
price; and basic market demand.
Price is only one part of the marketing mix19
, but it
is the one that can be changed with the least
effort. Given its direct impact on revenue, and its
key role it in determining a company’s profit and
markets share, it must be managed effectively.
Overpricing will lead to lower sales, while under-
pricing can negatively impact a firm’s position.
Entering!new!product!areas!and!markets!
The initial growth of most small and mid-sized
companies is usually achieved by serving known,
easy-to-reach clients in familiar markets. Once
these possibilities have been exhausted, to
continue on the growth path a company must
look beyond low-hanging opportunities.
To generate continued growth a tech companies
has several options. This includes creating and
selling adjacent products to their existing clients –
like an IT provider that offers an e-commerce
suite; targeting new segments with adapted offers
– a large-enterprise ERP vendor that goes after
the SMB market; selling into new geographic
markets – a French-based SaaS provider that
creates an English-language version of its offer to
target the Anglophone and international markets.
New product and market development efforts
require rethinking and adapting sales and
marketing strategies, as well as establishing
adapted channels to deliver on their customer
promises within the new context. This requires
additional efforts like dedicated channel
programs, adding complexity and new challenges
to a company’s growing pains. Careful planning
19
Marketing mix: The tactical business tool-kit used by companies
to establish a strong market position with clients and influence
demand. These possibilities are summarized by the 4Ps - Product,
Price, Place, Promotion
12. 12 The path for creating customer value and business growth!
merkadoservices.com
combined with a practical approach to execution
can reduce the time and resources needed to
develop new offers, prepare new channels,
effectively serve customers in new markets, and
continue down the growth path.
Accessing! new! skills! and! resources! to!
fuel!sustained!growth!
A technology company is often born from an idea,
some capital and the technical and creative skills
needed to crystallize the concept and serve the
first clients. The priority is usually placed on
delivering and selling a minimum-viable offer.
Within early-stage tech companies the founders
usually manage the basic marketing activities, like
defining products and services, establishing
pricing policies, creating basic promotional
material, and seeking resale partners.
As a technology company grows, the founders
usually shift their attention to other, more
important areas such as overseeing operations. At
the same time marketing responsibilities grow,
and often end up being shared among existing
staff, including sales, business development and
product development, who have to manage other
duties and may lack the time or expertise needed
to deliver effective results. At a certain point, to
continue growing a company will have to invest in
the skills of experienced marketing professionals.
Effective marketing professionals work with
product, sales and other functions to define and
carry out specific tasks to reach individual targets
profitably. Starting from the firm’s strategy and its
growth targets, a seasoned marketer will help
identify and refine opportunities, devising a
workable marketing plan to achieve the
objectives. This might include adjusting current
product roadmaps to reflect market realities,
designing a plan to maximize the launch of new
offers, or creating client-oriented programs to
ensure new and satisfied clients.
Using seasoned marketing expertise to fuel growth
can make the difference between letting key
opportunities slipbyandtakingatop competitive spot.
Managing! cash! flow! while! effectively!
investing!in!growth!
A great concern for all growing tech companies is
managing cash. This is especially true for growing
companies with large capital needs for designing
and delivering cutting-edge tech-based products
and capabilities, or who exhibit long operating
cycles and require significant sums of working
capital to function.
Companies with such cash constraints are often
faced with the choice between investing in near-
term, sales-related activities, like sales staff and
related selling expenses; or in other areas such as
customer research, market testing, developing an
existing product portfolio or creating a new one,
investing in professional sales tools or
establishing client satisfaction programs, whose
value and outcomes may not always be well
understood by management.
In most cases sales come first. While a ‘sales-first’
philosophy can generate sales in the near-term, to
continue growing companies must also invest in
future opportunities appropriately. They need to
focus on creating new value for customers and
assuring future growth in the form of additional
sales opportunities, new revenue streams, better
ways to service clients, improved customer loyalty
and increased customer equity. The challenge for
technology companies then becomes how to
invest in future growth, while effectively managing
their cash.
Many young technology companies are confident in their technology and the reliability of their products and
services, believing that they can market themselves. However, the most successful companies know that without a
continued investment in effective value and growth-driven marketing strategies and the associated resources - to
drive them to more places, to organize technologies for new purposes, and to pave the way for additional sales –
they will miss out on many valuable and important opportunities waiting to be seized.
13. Growing tech companies: The commercial challenges on the path to market leadership
merkadoservices.com
13
The most successful companies know that
without a continued investment in effective value
and growth-driven marketing strategies and the
associated resources, they will miss out on many
valuable and important opportunities waiting to
be seized
14. 14 The path for creating customer value and business growth!
merkadoservices.com
MARKETING! HELPS! COMPANIES! CREATE! AND! CAPTURE! CUSTOMER! VALUE,! FUELLING!
GROWTH!
Marketing is fundamental business activity that when done right helps new and established companies alike create
value for customers and find new ways to grow. At the same time, based on some of the views that we’ve heard
from many technology professionals, marketing often seems to be misunderstood.
Marketing! is! often! a! misunderstood!
discipline!
While marketing is a well-developed and established
practice in successful companies, in many growing
technology firms it occupies a secondary role to
other seemingly more important disciplines. While
there are many reasons for this, the result is that
management teams at many technology companies
end up missing many of the benefits and the value
that a marketing-driven approach could deliver to
their business.
Throughout our experience working with technology
companies in sectors such as telecoms, IT, software
and Web, we’ve heard many different and sometimes
mistaken ideas of what marketing is about.
Some people believe that marketing is:
Communicating the company brand through
advertising, events and client gifts
Simply promoting products and services
Making idealized and sometimes hard to
deliver promises
A necessary expense with no clear ROI and
little (if any) direct impact on sales
A department with no links to technology
development or product design
An activity with no direct relation to serving
or satisfying clients
While marketing does in fact deal with some of these
ideas, it does much more. In order to understand the
purpose of marketing and true value it offers
companies, we should first consider the strategic role
it plays in established organizations.
…yet! marketing! plays! an! essential! role!
within!organizations!
Management teams at most established world-class
technology companies periodically participate in
mapping out a corporate plan to ensure their
company’s survival and continued development in
light of their current situation, opportunities,
objectives and resources.
This strategic planning process20
, which often
produces annual, long-term and strategic plans,
helps outline the businesses that the company will
operate in and the objectives targeted for each.
Guided by this strategic planning process, a
company’s major functional activities – sales,
marketing, finance, purchasing, production, IT,
customer service and satisfaction – must work
together to accomplish the goals.
Within this strategic-planning framework, marketing
plays a crucial role in several ways:
20 Strategic planning: The process of creating and maintaining a
strategic focus between a company’s goals and capabilities and its
changing marketing opportunities.
The essential role of marketing in organizations
15. Marketing helps companies create and capture customer value, fuelling growth
merkadoservices.com
15
1. Marketing as a guiding philosophy –
Adopting a customer and marketing-driven
focus implies that a company’s strategy should
be focused on creating value-driven
relationships with selected customer groups.
2. Marketing inputs for strategic planning
– Marketing provides inputs to the strategic
planning process, helping understand and
identify the worthwhile market opportunities,
while assessing the company’s ability and
potential to take advantage of them.
3. Designing and implementing marketing
strategies – Collaborating with the business
units, marketing helps design and execute
strategies for achieving their business
objectives.
From this standpoint marketing, as a key strategic
practice, helps technology companies better
understand the marketplace; identify the best
opportunities to target; it provides inputs for
designing and creating customer value propositions,
considering both direct customers and their end-
clients; and it presents effective ways to serve and
satisfy clients, building lasting and profitable
customers relationships in the process.
Despite these clear benefits, there are still many
companies that continue focussing on creating
leading edge, high performance technology at the
expense of focusing on addressing the evolving
demands of their customers. To understand the
implications of this approach it’s worth contrasting
the product-driven concept they follow, with one
focused on meeting customer and market needs.
Compared! to! a! product)focused!
strategy,! marketing)focus! delivers!
customer!value!
Under the product concept it is assumed that clients
prefer products and services that offer greater
quality, performance and more innovative features. In
this case a company’s marketing strategy focuses on
making continuous product improvements to create
better products. At the same time a product-driven
approach can be a short-sighted strategy.
For example a book publisher may believe that by
producing better books with higher quality paper,
better ink offering brighter colours, and added story
features, readers will be more delighted and buy
more books. In fact, what readers may be looking for
is a better solution to learning and entertainment
through stories, not a better book. Better solutions to
this customer demand might include audio books,
downloadable e-books and interactive stories
including sound, video and other sensory experiences.
Furthermore a better book won’t sell unless the
publisher is able to design, package, price and
promote it in an enticing manner. This includes
finding the right market channels, getting the
attention of potential clients and convincing them
that the book offers more value than alternatives.
For a technology company, the shift from a product-
driven strategy to a marketing-driven strategy usually
requires a fundamental change in mindset. Rather
than focusing on making continuous product
improvements, a company must begin focusing on
ways to create value for its customers by organizing
and managing itself in such a way to systematically
create, communicate and deliver what clients really
value and will pay for. This is the very basis of the
marketing concept. This marketing process can be
described in 5 fundamental steps.
16. 16 The path for creating customer value and business growth!
merkadoservices.com
Marketing:!5Lsteps!to!value!and!growth!
The marketing concept21
(Figure 2) is the process by which a company
applies market insights to design a strategy to find the best ways to offer
value to customers and build strong client relationships, all while defending
its position against competitors. In return the company is rewarded by
capturing value from clients, leading to growth.
There are 5 distinct steps in this marketing concept:
1. Understand the marketplace and customer wants and needs - A
company must research and understand customer needs and wants, and
manage this market information in order to create market offers that clients
value and will want to buy.
2. Design a customer-driven marketing strategy – A company must
decide which markets to serve and find the right ways to create profitable
client relationships using their superior customer value, compared to its
competitors.
3. Build an integrated marketing program delivering superior
value – A company’s marketing team must transform the marketing plan
into actions using the marketing mix tools. By combining these tools into a
coherent set of offers and integrated marketing programs, the company can
communicate and deliver its value propositions to its clients.
4. Build profitable relationships and create customer delight –
Through its offers or customer value propositions, a company must build
and maintain a profitable relationship with clients by consistently delivering
superior customer value, assuring satisfaction and growing its client base.
5. Capture value from customers and create profit and client
equity – By creating superior customer value, a company can create
satisfied and loyal customers who will continue buying. This translates into
captured value for the company in the form of growing revenue, profit,
market share and long-term, profitable client relationships.
Within this concept, customer-focus and creating customer value are the
paths towards revenue, profit and sustainable growth.
The following case examples illustrate how two different technology
companies, each at different stages in their development and growth, are
using an enhanced marketing focus to help create value for their customers,
while capturing value and fuelling business growth.
21
G. Armstrong, P. Kotler, “Marketing: An introduction”, 11th
Edition; Pearson Publishing, 2013
Figure 2 - The Marketing Concept
17. Marketing helps companies create and capture customer value, fuelling growth
merkadoservices.com
17
Rather than focusing on making continuous
product improvements, a company must begin
focusing on ways to create value for its customers
by organizing and managing itself in such a way
to systematically create, communicate and deliver
what clients really value and will pay for.
18. 18 The path for creating customer value and business growth!
merkadoservices.com
MARKETING!SUCCESS!CASES!
TFS!achieves!2x!client!growth!rate!in!first!9!months!after!the!launch!of!new!SaaS!offer!
The Floating Stone (TFS) is a French Web and software design agency founded in
2007. TFS combines the creative energy and the technical know-how of its two
founders, Andres Gleixner and Greg Fournel.
In addition to carrying out custom web projects for a range of institutional clients,
TFS offers a range of slick, fun and easy-to-use professional SaaS-based tools
catering to the needs of independent workers and small businesses. Their current
Web-based services include Pictomos, an online image gallery for artists and
designers; Tomosfactory, a point-and-click, object-oriented Web design platform;
and Factomos, an online invoicing service targeted at small businesses operating
in the services sector.
TFS’!Business!Challenge!
Following on the success of Factomos, and with the
support of reputed Paris-based accounting firm, TFS
began developing Factomos Xpert, a new SaaS offer
directed at accounting firms, allowing them to
quickly and easily access their clients’ invoice data
stored securely within their respective Factomos
account.
This online client-accountant connection would allow
accountants to eliminate data re-entry and reduce
possible accounting errors, while helping to forge a
closer and more collaborative relationship between
accounting firms and their businesses clients.
While experienced in creating and selling Web-
based services for independents and small
businesses using mostly online B2C marketing
techniques, TFS was unsure on how to approach the
more traditional and highly regulated accounting
sector.
To successfully introduce Factomos Xpert TFS faced
a number of issues that they needed to resolve:
" Building a sellable offer – The product
development of Factomos Xpert started out
with a technically driven process of developing
specific functions allowing accountants to access
and manage their clients’ invoice data. While
this gave their first accountant users the ability
to read and import their clients’ data, it did not
address the full range of requirements and
demands needed to commercialize the online
service to other accounting firms and their
respective users. Further capabilities were
required to allow group registration and
payment, user support for accountants and their
clients, as well as additional management and
collaborative capabilities between accountants
and their business end-clients.
" Targeting professional institutions – Up
until now TFS had been successful at
commercializing online services to small
businesses like themselves, using the Web.
However, to successfully indentify prospective
accounting firms and create awareness for the
new service would require a different approach.
Previously accustomed to dealing with creative-
sector professionals who live and work on the
Web, TFS had to find new ways and more
appropriate channels to engage with the more
traditional and institutional accounting firms.
" Effectively marketing a B2B offer –
Beyond simply developing an effective online
software suite to help accounting firms save
time and reduce accounting errors, TFS needed
to create an attractive value proposition to
properly address this group. This required
promoting the benefits of its new SaaS offer to
accountants, and to firms interested in adding
19. Marketing success cases
merkadoservices.com
19
value to their existing accountant-client
relationships and streamlining their current
processes. This would require developing new
methods and tools to create awareness and
interest around the customer value offered by
Factomos Xpert.
The! Solution:! Deliver! its! product! to! market!
using! an! integrated! commercial! launch!
program!
To help TFS ensure a timely introduction and
effective commercialization of Factomos Xpert,
Merkado designed and kicked-off an integrated
commercial launch program with several aims:
Gain an clear understanding of the customer
value offered by Factomos Xpert
Create a customer-centric plan to introduce
an improved, market-driven offer to the
French market
Provide some key processes and tools to
further develop its Factomos Xpert business
The 3-month project began with an audit of their
initial situation. Based on the finding a number of
related actions where taken to prepare for an
effective introduction of an adapted product.
Key steps taken include:
A study of the usage and expectations of
existing customers
Design of an adapted marketing strategy
Implementation of a market-driven product
roadmap process
Creation of various sales and marketing
tools and client testimonials to support a
successful commercial introduction
Management of external partnerships in the
areas of e-mail marketing and IT systems.
With these areas covered Factomos Xpert was ready
for commercial introduction in early 2012.
Business!Result:!2x!client!growth!in!the!first!9!
months!after!launch!
The Factomos Xpert service was launched at the end
of Q1 2012 with a dedicated Website (Figure 1) to
specifically address accounting firms and spotlight
the service and its benefits for that market.
Factomos Xpert currently offers prospective
accounting firm customers the ability to try the
service for a limited time, while giving existing
customers the means to easily help their business
end-clients make the switch from their existing
invoicing tool to the Factomos online invoice service.
To create awareness and demand TFS began
targeting accounting-specific channels – both online
and offline – including French business registries and
the yearly French Accountants National Congress.
Finally, by leveraging the existing Factomos invoicing
service, Factomos business end-users now have the
ability to give their existing accountants access to
their invoice data, effectively generating new
demand for Factomos Xpert, from the bottom-up.
In the first 9 months after the commercial launch of
Factomos Xpert, the number of client accounts grew
by over 2x.
With its innovative Factomos Xpert SaaS offer, which
helps accounting firms be more productive and forge
stronger relationships with their end-clients, TFS is
well positioned to further grow its business in the
promising collaborative accounting tools market.
Figure 1 - Factomos Xpert Homepage
20. 20 The path for creating customer value and business growth!
merkadoservices.com
OneAccess!captures!€300k!contract!with!customer!business!valueLdriven!white!paper!
OneAccess is a leading, worldwide provider of business multi-service routers,
Ethernet access devices and managed service software, enabling
communication service providers to deliver profitable communication
propositions to business customers of different types.
It supplies routers to over 120 service providers in over 50 markets worldwide,
including 4 of the 5 largest European providers, and currently holds over 30% of unit market share of branch office
routers in EMEA. The companies was incorporated in 2001 and employees over 400 people in 13 locations
worldwide.
OneAccess’!Business!Challenge!
As an established player in the business router
market, OneAccess’ strength lies in working with its
clients to design and build custom devices tailored
to their particular requirements. Its commercial,
engineering and operations teams work in close
collaboration with their client counterparts to quickly
define and deliver adapted products.
While this approach has helped OneAccess develop
its client base and consistently grow its business
despite a tough economic environment, when
compared to the market leader, it is sometimes
perceived by service providers as a router vendor
rather than a key partner capable of helping them
create and jointly go-to-market with new business
communication value propositions.
To make the shift from a network device supplier to a
business partner it faced several issues:
" Instilling greater client business focus –
OneAccess’ customer-facing teams, including
engineering, operations and field support, are
one of its key assets. However to accelerate the
company’s shift from network device supplier to
business partner it needed an effective way of
internally capturing and transferring business
and market-specific knowledge based on its
experiences, including past client successes.
" Offering clients value for creating
successful services – As part of its offer
OneAccess delivers product design, technical
support and other services related to the
customized devices it sells to clients. While its
technology portfolio is an important part for
delivering successful communication services,
there are other equally important business
issues and considerations for developing
successful services. As a global supplier to
service providers around the world it has access
to such valuable information that other clients
would find beneficial. OneAccess needed a way
to share these insights and best practices with
clients and prospects, thus confirming its
commitment to their business success.
" Broadening and strengthening client
relationships – OneAccess has been quite
successful at establishing client relationships
with its commercial, engineering and network
operations client counterparts. However, to be
viewed more as a strategic business partner and
increase its circle of influence, it needed to
broaden and strengthen its customer
relationships with other client decision-makers
and influencers, including the marketing and
strategy-focused teams.
The!Solution:!Offer!customer!business!insights!
using!strategic!white!papers!
In order to help OneAccess improve its commitment
to its clients’ business success, and help further
broaden its relationships, Merkado designed,
researched and developed a comprehensive
strategic report on creating successful
communication services, targeting its clients’ strategy
and marketing leaders.
This value-driven strategic white paper had several
objectives:
21. Marketing success cases
merkadoservices.com
21
Provide an updated market and customer-driven
view of OneAccess’ business voice services
portfolio
Demonstrate to service provider strategy and
marketing leaders the business value offered by
OneAccess’ business IP voice portfolio, as
shown through successful customer cases.
Provide OneAccess customer-facing teams with
valuable, business-oriented discussion points for
engaging with other client executives, thus
helping broaden and deepen client relations
The custom report included an overview of current
business communications market trends, a discussion
of the business end-user market and an overview the
key considerations for successfully commercializing
new business IP voice services. These points were
further highlighted through a set of comprehensive
service provider success cases, clearly demonstrating
the value from partnering with OneAccess.
Business! Result:! Strategic! white! paper! helps!
net!a!€300k!contract!
The strategic white paper was published in early 2012
and is currently being used as a strategic commercial
tool for value-selling OneAccess’ business
communication offer to prospective clients, while
helping broaden and strengthen client relations.
The customized report (Figure 1) offers business-
minded readers’ relevant information and insights –
in the areas of product strategy, marketing, sales,
and distribution, operations and customer
satisfaction - for creating successful business IP voice
services for today’s clients. The recommendations
are further reinforced with a set of success cases
focusing on two distinct European communication
service providers. Each case example clearly shows
the qualitative and quantitative business benefits that
have been achieved by working with OneAccess.
In one particular instance, the white paper was
distributed to some staff at a prospective client that
was in the process of evaluating several router
vendors, including OneAccess. One of their senior
business managers read the report and found it
particularly compelling and relevant to his business.
To influence an upcoming investment decision from
his management team, he extracted various key
points and insights from the report and included
them directly within the project-funding request.
Following the management review, the funding
request was accepted and the project was given a
go-ahead with OneAccess as supplier, leading to a
€300,000 contract for them.
Figure 1 – Value-driven, Strategic White Paper
22. 22 The path for creating customer value and business growth!
merkadoservices.com
THE!WAY!FORWARD!
Never in recent history have there been so many technology companies
battling it out to win clients and attain a leadership position. The most
successful ones know that to stand above the rest they need to focus on
what’s important: tuning in to the market and listening to their customers in
order to provide what they value and are ready to pay for, all without fail.
For growing tech companies this is especially critical if they are to continue
on the upward path. Whether it is a 5-person tech start-up setting its sights
on its first set of clients or a 500-person technology firm targeting its next
quarterly results, tech companies face many commercial challenges when
developing and delivering winning customer value propositions, ensuring
satisfied clients, and investing in business growth.
An integrated marketing-focused approach offers technology companies a
true, customer and market-driven philosophy, paving the way to success.
When done right it helps companies create and deliver customer value, and
fuel business growth. The benefits include:
Recognizing new, viable business opportunities
Reaching clients in new and effective ways
Capturing additional customer revenue
Creating net customer growth
Forging broader and stronger, profitable client relationships
With its full range of integrated go-to-market service solutions, combining
professional advice, practical assistance and proven methods, Merkado has
helped many types of technology companies bring new offers to market,
capturing value and creating new growth.
To see how Merkado can assist you in achieving your company’s business
objectives, contact us through our website: merkadoservices.com