Let’s say you’re the CEO of a High Tech company …
Let’s say your business grew steadily from the time you started the company, but for the past couple of years you seem to be stuck on a sales plateau. No matter what you try, you just can’t increase sales beyond that point. You really want to grow your business to the next level, but you’re not sure how.
This is a situation that many clients have come to us with over the years. It is not only common, but also predictable for many High Tech companies, especially if they are within their first 5 to 10 years of operation.
In our experience, one of the most effective ways of getting High Tech companies in this situation back on a steady growth trend, is to help them transition from being engineering-driven to marketing-driven.
How An Engineering-Driven Culture Can Limit Sales Growth
A few years ago, the chief engineer of one of the High Tech firms we were consulting with came to me and said, “ Here’s what I came up with last night … do you think anyone might want to buy this?” This is what I mean by being engineering-driven. A talented team of engineers is constantly experimenting with how to combine hardware, software and firmware to create amazing new things, without any predetermined target group of customer prospects in mind.
Many High Tech firms have been founded on these “inventions” that were dreamed up overnight by engineers. Typically they show their prototype to a number of customer prospects to see if it has any commercial value. Eventually one of those prospects agrees to be their first customer provided that they can also make the product do x,y and z. So they do some custom tweaking and the first sale is made.
The problem is that every subsequent sale typically requires custom tweaking as well. While they can comfortably handle sales growth of custom jobs for the first few years, eventually they reach a production bottleneck. There are only so many custom jobs that can be handled at one time, and they can sometimes be unpredictable in terms of the time it takes for development and debugging.
As a result, these companies are now stuck on a sales plateau with no way to grow.
How A Marketing-Driven Culture Can Kick Start Sales Growth
The key difference between being marketing-driven and engineering-driven is defining the target audience up front and identifying their needs and wants as input to the product development process by the engineering team.
So, to overcome the problem of developing custom solutions for each new customer, in a marketing-driven culture you would study the market segments for each of your current product offerings to determine what features would automatically appeal to 80% of the prospects. That would enable you to work with your engineers to standardize each of those product offerings in terms of hardware, software and firmware so that they could be delivered as off-the-shelf products.
How would that help to get you off a sale plateau and increase sales for your High Tech company?
Having off-the-shelf products to promote to customer prospects significantly reduces the time to market by reducing expensive customizations and debugging. That means more units can be sold in the same amount of time than before, and at higher margins.
Furthermore, instead of spending time working out custom solutions that are basically variations on an existing theme, your engineers could instead focus on leveraging your core competency into a whole new product (based on pre-determined consumer needs) that might appeal to a whole new market. As you can imagine, this is where the really big growth can start.
Could your High Tech company increase sales by becoming more marketing-driven?