Monday, September 13, 2010

My Advice to Mobile Applications Vendors, Part 1

Over the weekend I had a mobile start-up contact me and share their challenges in getting a working sales channel set up and rolling in the enterprise mobility market.  Since this is a challenge that is shared by many small mobile start-ups, I thought I would share some of my thoughts on this matter.
  1. One thing that I learned years ago is that resellers and systems integrators like to jump on a bandwagon. If there is no bandwagon, they aren’t motivated to jump. What does that mean? You need a bandwagon that plays music and attracts a crowd before the resellers or systems integrators come.
  2. The bigger the market you are targeting, the bigger the amplification system your bandwagon needs.  You need bigger and louder noise in order to be heard. 
  3. Another lesson I learned is that resellers want to focus on a repeatable model in a market they can leverage. What does that mean? It means if they sell to an SAP customer, they can reuse the SAP integration and experience with other potential SAP customers, have an SAP reference case and demonstrate knowledge in SAP environments. They can build a good reputation in a specific and defined market.
  4. Understand resellers and their business models. They don’t care as much about what is the very best technology. They want the best selling technology. The high tech world is littered with better technology that went nowhere. The best selling technology is the one with a bandwagon. This is a very important concept to understand.  They are out to make money.  They want to offer solid, reliable technology that works and will make them the most money with the lowest cost of sales.
  5. Some companies focus on extending SAP and other ERPs to mobile devices.  These are large and defined market places.  While other markets, like the mobile field data collection market, are made up of thousands of small niche markets with thousands of small resellers. It is hard to leverage a mobile bridge inspection application with an EPA application assessment or clinical trials project. The audiences, markets and resellers do not overlap so it is difficult to leverage success in one niche market into other small markets. It seems you are always starting from scratch in the next market. This means you cannot gain momentum and selling does not get easier over time. The cost of sales continues to be far higher than it should.
  6. The marketing investment in one niche market is difficult to leverage in another dissimilar market.  The result is a higher marketing budget requirement per customer.  It is easier and more cost effective to attend one ASUG Sapphire or TechEd conference and meet thousands of potential customers, than to attend many small conferences and meet dozens of prospects in different markets. 
  7. It often takes the same sales and market investment to close a $50,000 deal as it does to close a $500,000 or $5 million deal.  The difference is you may lose money on the $50,000 deal when the cost of marketing and the cost of sales is factored in.
  8. A rule - The sales process must get easier over time.  You need your marketing system, your reputation, brand, reference cases, industry expertise and referrals to help you gain momentum and speed.  If your sales process does not get easier over time it is broken.
  9. Once you have worked with the big boys in the ERP space you can understand why this is a good market. Good reputations can be developed through an accumulation of successes and SAP customers are often large enough to buy thousands of software licenses.
  10. SAP customers within certain industries like oil and gas or chemical all belong to the same special interest groups and they talk. Not only do they talk, they attend meetings together and have regular webinars. SAP has dedicated sales and industry experts that support these markets. Success with one large customer is quickly known around the industry. With each success the work is easier and the cost of sales goes down.
  11. You can replace the name “SAP” with Oracle or IBM Maximo or any number of companies and ERPs. The idea is that big markets, with large customer bases, that belong to the same industries are very good areas to invest in. It takes big markets to gain leverage and economies of scale.
You can see these strategies being implemented by SAP mobility partners like Clicksoftware, Leapfactor and Syclo.  They are focused on supporting the needs of SAP customers and developing a great reputation mobilizing the business processes of SAP users.  As their customer bases grow, so does their expertise, brand recognition and reference list.

If you are interested in discussing this topic in greater detail please contact me

My Advice to Mobile Applications Vendors, Part 2
My Advice to Mobile Applications Vendors, Part 3
My Advice to Mobile Applications Vendors, Part 4
My Advice to Mobile Applications Vendors, Part 5
My Advice to Mobile Applications Vendors, Part 6

Kevin Benedict, SAP Mentor, SAP Top Contributor, Mobile and M2M Industry Analyst
Phone +1 208-991-4410
twitter @krbenedict
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Full Disclosure: I am an independent mobility consultant, mobility analyst, writer and Web 2.0 marketing professional. I work with and have worked with many of the companies mentioned in my articles.