Lone-wolf mindset leaves tech companies behind
Kiwi tech exporters are a long way behind their US counterparts in some key areas of marketing and selling their products, particularly using ‘cloud’ or internet-based technology, finds the latest Market Measures survey.
Conducted by marketing advisory firms Concentrate and Swaytech, the annual survey drew data from more than 300 New Zealand-based technology companies on their approach to marketing and selling their products.
“At an average annual turnover growth rate of 38 per cent our tech firms continue to do well,” says Owen Scott, managing director of Concentrate.
“But we remain a nation with a few large tech stars such as Orion Health or Tait Communications, and thousands of very clever, but small exporters.”
Thirty per cent of firms in the survey were more than 10 years old, but over 70 per cent of them record annual turnover less than $ 5 million.
The study found a ‘lone-wolf’ mind set dominates their approach to selling technology products.
“They rely on a talented sales person or sales team to do everything from finding prospects through to securing a sale, which restricts their ability to efficiently grow a company of scale,” says Scott.
The alternative is a more efficient, ‘pack’ approach – where a suite of indirect tactics are used to find, nurture and qualify sales leads for the sales team to convert to customers.
“Benchmarks we have sourced from the world’s most successful technology industry, the USA, show indirect tactics (e.g. direct marketing, advertising, email marketing, social media) deliver 80 per cent of their sales leads, compared to 23 per cent for the average Kiwi technology company in this study,” says Scott.
“It is a stunning contrast and at the root of why we have such a long tail of very small companies, and not enough hitting that magical $100 million annual revenue figure.
“Faster and more sustainable growth comes from focussing on a market, undertaking indirect activities to warm that market and qualify and generate sales leads for a sales force then to convert.”
Bob Pinchin, director of Swaytech says the exciting aspect of the study is that much of this indirect activity can be driven remotely over the internet.
“In almost any business, part of the buying process is conducted online, giving our tech companies the opportunity to reach them cost effectively,” he says.
The study found firms need to better embrace the internet as a channel to support their sales, produce the right kind of marketing content for online channels, and use social media much more aggressively.