Build it and they will come, but they may not buy

Chris Bohrson signing in for week #4…….

 

Last week, related to the TMC case I wrote on selling whole products, I talked about how we used VOC to find a large revenue opportunity and an early adopter customer. But we also realized we had some skill gaps that would have to be addressed if we were going to capitalize on this. So, this week I will talk about these and why they came about.  

 

To review, the core business for this Division was providing service assurance systems for phone companies to support voice services. The VOC uncovered that phone companies were looking for a new source of revenue as their traditional phone service was in decline. This was important as with voice in decline they were going to spend less on voice service assurance. 

 

The result of the VOC was we found a market opportunity for providing DSL pre-qualification to phone companies. The background on this is that the ability of a particular copper phone line to support varying speeds of DSL depends on the gauge and length of the line: thicker and shorter lines support faster DSL service. Also, phone companies over the years installed devices called bridged taps and load coils as part of their provisioning for phone service. These devices disrupt DSL service.

 

At this time, most phone companies had inaccurate records for length, gauge, bridged taps and load coils. Thus they really did not know with any great accuracy the ability of many of their millions of phone lines to carry DSL. As provisioning DSL service was expensive most phone companies were very conservative in informing a consumer that their line was capable of supporting DSL. In fact, studies we had done concluded that large phone companies were giving up millions of dollars in annual revenue because they were turning down consumers for DSL service when in fact the lines were able to support it. 

 

So, as the group had developed a very unique and innovative approach to qualifying lines in mass, we saw a big opportunity to sell new, multi-million dollar systems to current customers as well as winning new customers. This was particularly exciting as winning new customers in the Division’s service assurance business was very, very difficult. This is because phone companies typically did not switch suppliers as the costs were enormous and therefore hard to justify.

 

However, there were big challenges we ran into from the start in trying to sell DSL pre-qualification systems:

 

· Latent requirement: for most phone companies, the technology experts did not believe there were any good alternatives to their current records system. Also, the loss of revenue was not visible to senior management. The buy-off of both these groups was essential as this new system required a multi-million dollar investment. 

 

So, demand for DSL pre-qualification systems had to be created!

 

· Champions: any sale requires a Funding Decision and a Selection Decision. That is, the customer needs to budget money to buy something and then decide whom they are going to buy from. The vast majority of selling is to win the Selection Decision. However, in nearly all cases we came across there was no money budgeted for a new DSL pre-qualification system. Thus, we had to create a Funding Decision. In order to do this, we quickly realized we needed to develop a senior management champion who would fight to put budget in place. Once we had this we were confident that we had a very unique, high value system with which we could win the Selection Decision. 

 

So, Champions were needed!

 

· Team skills: the skills of the current product marketing and sales team were more aligned to satisfying demand with current customers. They had less experience and skill at creating demand, winning a Funding Decision and developing Champions. 

 

So, we had to develop new skills in the team!

 

Next week I will outline what we actually did to close the skill gap and how we approached the market. 

 

Until then have a good week…….