|
 
|
Cognos & CrossKeys -
Creating Niche Leadership
- Part III
"In
innovation markets...the best way to deliver investor value is to attain
niche
leadership."
from the desk of Peter Fillmore
April 2000
Finally, the last part of our series on "Creating Niche Leadership." This
time, we share some ideas and some experiences of both CrossKeys
and Cognos.
Adjust technology focus as market matures - Market
promotions, partnerships, PR, sales process, and 'customer consulting'
bring back a wealth of ideas on where the market is going. This guides the
product development effort. Early spotting of trends in adjacent markets
is one important activity. In CrossKeys case Service Level Management was
a known need for the carriers. But now their customers' customers, the
enterprises, want service level management at the application level. "They
even want to buy it when they need it, pay for what they use, and get
performance at the level specified by their 'Service Level Agreement (SLA),'"
said Ian McLaren, CrossKeys President & CEO.
"We are making service level management part of our niche leadership plans
and positioning."
Also, mergers or acquisitions may be a great way to add well-suited
technology. For example, CrossKeys have signed an agreement to acquire
Dynamic Broadband Networks (Pennsylvania) who specialize in broadband
access technology and software. This provides CrossKeys with a position in
broadband access (e.g. cable) as this type of Internet connection grows.
It also extends their market coverage from the core network to the user
connection - the "last mile."
Build a value-based Sales Process - Build a sales
organization based on "customer value" in an emerging value chain, not
based on product features. Usually you should add application services to
your product line mix, focused on typical project phases that you know
might slow down achievement of customer value. These "consultative"
relationships create new orders and also provide a constant flow of
information on customer buying behavior. CrossKeys has doubled spending on
marketing & sales as a % of revenue, which is appropriate for a young
products company. In addition, they have enhanced their customer
engineering field force to help customers get applications up and running.
This helps in several ways - improving sales productivity, avoiding
distractions of "product specials", and providing feedback to product
planning, all paid for by the customers.
The next (ongoing) step - Sustaining leadership - Cognos
is a company that has won the first few rounds of their niche leadership
efforts - the current challenge is to sustain leadership perceptions.
Rob Rose, V.P. Product Marketing, made several comments.
"You have to work hard at substantiating leadership. At every turn, the
progress and evidence needs to go out to the marketplace. Also, some new
market phenomena emerge - e.g., in many software acquisition situations
Cognos gets included by acclamation. Overall, this is good news, but some
of the leads are not really a good fit for Cognos, so they may be
distractions. Sales Management needs more 'go-no go' rules - they must
become more selective as time goes on."
Also, get used to being attacked. The competitors will now be using you as
a "cause" to energize their people. Sales Management needs to be both
pro-active (to sell the accounts wanted), and re-active (to deal with
aggressive competition). Marketing has to support this with more
competitive analysis. For Cognos the hard work has paid off. The company
has earned the largest share of BI revenues and continues to fend off
attackers as the sector grows.
Recognize investor education as a marketing challenge -
About two years ago CrossKeys had an IPO. The culture change was amazing -
with over $50 million available from the IPO proceeds, the company felt
the scrutiny of regular public reporting, and the investor pressure to
show profitability. But having liquid assets in excess of annual revenues
is an unusually difficult management problem for young growth companies.
When CrossKeys went into a downturn the profitability disappeared. This is
when the financial goals changed, and CrossKeys set out to focus resources
on their niche leadership opportunity. In innovation markets, especially
fast-growing ones, the best way to deliver investor value is to attain
niche leadership. Easy to say, hard to do - I trust some of theses ideas
will help your company meet the challenge.
Crosskeys - Creating Niche Leadership - Part I
Cognos - Creating Niche Leadership - Part II
Your comments, questions, and suggestions for future articles are welcome
fillmore@westpark.com
|
|
