What You Don’t Know Does Hurt You!
By Per Sjofors, CEO, Atenga, Inc.
Groundbreaking market research reveals simple and effective method’s to better align vendors, users, and buyers of Remote Monitoring and Control products and services - you just need to know!

Did you know that the majority of users and buyers are substantially dissatisfied with the overall accuracy of the equipment? 

According to our recent industry research study on the true non biased perceptions of users and buyers of remote monitoring and control equipment, we can also tell you that:

1. Users and buyers are mostly satisfied with issues involving security.
2. Most buyers really don’t think that price affects product quality.

There is a lot more in the full report, but think about what just these tidbits mean to a vendor, if the vendor acts on the information.

Consider This: A vendor spending resources in the improvement of security can probably save or reallocate those expenses to improve and/or demonstrate the accuracy of their products.  

Companies say they know what their customers want - but do they?  Yet according to the data, there is a gap between what vendors deliver and the market actually wants. The reason for this can often be captured in the phrase “buyer - liar”. This means buyers don’t always tell the truth, or not the whole truth, about what they want in a product because they think the vendor will take advantage of them next time they buy. Think of this for a second. Last time you bought a car, did you say to the salesman “If you have it in green I’ll pay another $750!”
 
This also leads to, as research indicated, that the market is highly commoditized. This means specifically that buyers feel all competitive vendors are just about the same, and that competing products are the same too. As such, they make their purchasing decisions primarily on price. Knowing this, vendors feel forced to cut costs at all cost and to add more and more features in order to compete. They “win” their customers by providing “more for less.”, and this becomes a never ending viscous circle of declining profits and suffering business results. It’s certainly not good for the vendors, and in fact, long term, it ends up hurting the buyers as well.

But there is another way. Let’s learn from two companies in two different commoditized industries that most of us know and some of us love: Apple and Starbucks. What is their secret? Strategic marketing based on the right type of hard data about their market’s value perceptions, decision drivers, and willingness to pay.

Here’s Their Secret:   There are proven marketing strategies that will differentiate vendors from their competitors and decommoditize their offerings, increase their customers’  willingness to pay, satisfaction and repeat purchases. With the right strategic marketing they can provide “more for more” or even “less for more.”  Why don’t most vendors know this? These strategies are so effective that the companies who use them really don’t want anyone else to know about them. And they are all based on an in-depth understanding of the buyers’ decision landscape, perceptions and price elasticity.

Can you imagine the reply a proprietor of a coffee shop in 1995 would have heard if he or she suggested to start selling coffee with milk at $3.50 and not $0.99! Yet Starbucks found a way, a way driven by a combination of intuition, in-depth market research and a bit of luck. There is no reason why you can’t do the same.

Think About This: Buyers obviously are willing to spend more money on things they want than on things they don’t. While the buyer will tell the vendor they buy the lowest priced product that meets the spec, that is not normally the case. 81% of purchase managers buy what they say is “best value”, not “lowest price.” So what exactly is “best value?”  It consists of price, spec, AND the value perceptions of the people involved in the buying decision. The buyer will make a perception based assessment on how they think a product will hold up to the spec, how it will age, how difficult it will be to upgrade or replace, what services and warranties come with the product and how they perceive the vendor will live up to its promises.

And this is where the strategic marketing comes in:

1. Starbucks discovered that the experience of buying (typically) higher quality coffee in a pseudo-international setting with a tremendous number of choices laid the foundation for higher prices.
2. Apple discovered that a limitation of choices and an end-to-end solution that “just works”, along with a neat design, made it possible to sell MP3 players, computers and mobile telephones at two to three times the price of competitors (and sometimes more!)   

Strategic marketing is not about advertising, it’s not about glossy brochures, and it’s not about the website. It is about knowing what the customer truly needs in better detail than the competition, knowing the value perception of the customer in more detail than the competition, knowing the willingness to pay and price elasticity better than the competition and most of all it’s about acting on this knowledge in corporate, product and marketing strategy.   

Okay, okay, you will all say “we’re not Starbucks, we’re not Apple”. We don’t have the resources to be that strategic. Our market and our customers are “different”. Just remember, Apple was at near-death when the iPod was introduced and Starbucks started in one small coffee-shop chain of 5 shops in Seattle.  As long as we all sell products to other humans, the human traits will be the same; and perception of the best value will win.

Per Sjofors is the CEO and Founder of Atenga, Inc. he has more than 20 years of executive management experience and has built a number of successful, and very profitable, sales and marketing companies in Europe and in the US. Per co-founded industry association G-SAM and has published a number of articles in industry press. He is also a speaker at the Remote 2010 Conference & Expo.

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