In the 1990’s there was a software company that dominated the Novell NetWare backup market. Their market share was formidable in this space, and they were slowly but surely getting a strong contender position in the emerging Microsoft windows backup market. They also started to expand into associated management tools, namely in the online fax and security markets. All in all they were a business on the way up, with a very strong 2-tier channel of distribution.
A large software company that was dominant in large enterprise systems and wanted to expand and acquire a firm with a strong channel model acquired them.
After the take over, the small company was made to use many of the processes of their new parent; a normalized business model to create efficiency. These transitions always take time and in the interim, the product quality is always hard to maintain.
The key reason why they were acquired was to allow more products to start to use the channel model. But again there were teething problems, the biggest being that the large parent company had a strong sales force that was used to taking all deals direct. And sometimes when a deal was close to closing these direct sales reps would look to move the deal to the direct model rather than using the channel partner involved in the sales cycle, as they could then keep a larger share for themselves. Of course this did not please the channel resellers, who were seeing business being ripped from their hands.
These kinds of things don’t happen many times before the rumors of the issue spread. There is an old saying in Australia “shag one sheep, and your known as a sheep shagger for life.” Well there is pretty much no better way to sully your reputation with a channel than to take deals from them.
The reputation of the product and of the business practices with the channel partners was damaged and the impact on business was quick. The competition was happy to tell the market about these issues (what we call in the industry creating fear, uncertainty or doubt or FUD). And the business reflected these challenges. Numbers not only didn’t grow as expected, they were down.
Using Marketing to Improve Strategy and Execution
I joined this company at this exact time (2000), directly to offer my help with this problem. As a marketer, I saw opportunity to help fix many things.
The first thing we did was speak to customers and channel partners and hear what they had to say. What business problems did they have? How did they want to approach solving those problems? How were the vendors (like us), doing toward those two areas?, etc. And they were clear: there were product quality issues, product functionality was behind the market, the vendor/s ignored their real issues, and the channel conflicts were causing people to look elsewhere for their relationships.
What could we do to fix it?
We build a simple multistep plan, to test each concern and build a response.
Firstly we looked at product quality. What we found was that the product itself was strong, but the implementation process was highly complex, licensing was hard to use and support was harder to get than in the past. So we set about fixing these issues.
We rewrote the installation guide, reducing it is size from 184 pages to initially 16 pages and then to 1 fold out page. The rewrite took a weekend to fully plan (with the documentation team and myself and a lot of free pizza and soda) and then a month to complete.
The licensing model was harder to understand, because there were now more ways for customers to license the product. So we explained just how flexible the licensing now was, and built a simple configuration guide to simplify it. Customers now saw it as a benefit.
We streamlined the support process, making it easier for customers to get support, and showed them the advantage of the new “follow the sun” support model, so now they could get support 24 hours a day. It now became a benefit. We turned the change from a stand-alone, focused company to becoming part of a global enterprise from a weakness to a strength.
Next we needed to deal with the feature set. The product was rock solid but actually slightly less feature rich than the competition because it was designed to be easier to use (and was in fact easier to use) so we made a case to the market that “ease of use” was critical.
We asked reviewers from publications and organizations around the world to review our solution and compare and contrast it to the other market competitors. We created a “reviewer’s guide” for them with screen shots and quotable facts they could use in their reviews (the guide also helped steer them around or through any technical holes in the product). And sure enough
they came back and showed us that the product was the best in class, easier and faster to install and easier and more reliable in use, as it was harder to make a mistake. Again turning a weakness into strength.
Next we looked at the channel conflict issue. And to fix this we split the product into two. Creating one version specifically for the direct sales organization to sell. We changed the pricing and to some level the feature set to allow the direct teams a higher price point and a focus on larger accounts and a more technical market. Direct sales make use of much higher levels of discounting, so a higher list price provided a cleaner playing field.
We then shared all we had done with the market through the press and analysts and effectively gave them bullet points and facts that made it incredibly simple for them to write stories on the product and the company. We did all of this in under twelve months and started to see a positive impact on sales almost right away. Within six months more we had stopped the sales decline and were again seeing sales growing.
We spent a lot of time working with the press and they realized we were making their jobs easier. If there was ever a story anywhere in the world that involved our market, the press knew we would always give them an excellent quote for their story. We were everywhere. At the same time we “marketed” our product internally to effectivelytransform virtually every employee into brand evangelist for us.
Now we had a strong story to tell we then started to create demand generation campaigns again. Until this point our “spend” in terms of marketing were mostly in the form of shoe leather, phone calls, long days and a lot of hard work. But now we deeply understood our target market, the business problems they needed solve and how they wanted to receive information from vendors. With deep customer (and target market), knowledge and a clear story to tell we created and executed a marketing program based on “Buyer’s Journey” (not ours), and drove a huge amount of fresh demand.
We performed a very successful recovery of a good, but declining product.
We repositioned product set, rebuilt partner and customer preference, created excellent relationships with the industry analysts and industry press and took a collapsing revenue stream and re-seller network and returned them to healthy, strong growth.
And we had done all of this without focusing on marketing budgets or growing large teams. In fact we had not increased our marketing spend at all so as the revenue returned and grew, marketing costs as a percentage of cost of goods sold (COGS) actually had shrunk.
Our revenue and market share were growing, resellers wanted to work with us and we won virtually every industry award in our product’s class.
Small team, minimal expense, big results.