High-tech firms taking low-tech approach to marketing
High-tech firms taking low-tech approach to marketing
Kiwi tech companies missing out on growth opportunities with low tech marketing approach
Christchurch, 1 October 2013 – Kiwi high-tech companies are decidedly old-school in their offshore marketing, a new report says. Despite spending almost a third of their annual income on sales and marketing, less than 4% of local technology firms use specialist software to automate their marketing efforts.
This is one of many insights contained in the 2013 Market Measures report, which aims to help local technology firms to overcome issues and distance and scale in selling to offshore markets.
“It’s a symptom of a deeper problem in the way we market our technology products offshore – we tend to equip sales people to go out and sell customer by customer, but not back them with marketing programmes that communicate to a target market en-masse, which increases brand awareness and makes the sales person’s job easier,” says Owen Scott, managing director of Concentrate, which organises the survey with fellow technology marketing company Swaytech.
“Low use of the marketing automation software is a real area of opportunity for the average Kiwi tech exporter, who could really transform the efficiency of their marketing process.”
New Zealand Trade & Enterprise and AJ Park are the principal sponsors of Market Measures 2013, a national benchmarking survey of the sales and marketing activity of New Zealand technology companies.
346 New Zealand firms completed the survey, which showed tech firms on average grew their turnover by 39% and spent almost a third of their annual income on sales and marketing.
“Market Measures shows our tech firms live and breathe by exporting, with 77% of the respondents selling offshore, most of them from an early stage of growth,” says Mr Scott. The firms have doubled their exports to the US since the 2010 Market Measures report.
The survey also identified some key characteristics of the highest growth technology firms, he said.
“There’s no absolute blueprint for technology exporting success, as we are selling so many sorts of technology products to so many different countries and industry sectors, but there are a few common ingredients that are associated with high growth.
“What characterised these companies is a strong understanding of a distinct target market; a tight focus of activity on that market; an aggressive and confident attitude to promoting to that market; and, a willingness to measure the effectiveness of their marketing activities.”
While most firms are marketing through social channels, their efforts are often a bit half-hearted. Social media requires constant measurement, refinement and commitment. Companies who make strategic use of social media do see good results, the survey says.
To companies who feel their marketing might not be as effective as they’d like, the survey suggests putting more emphasis on fewer target markets. Don’t be afraid to make a big sell—as one survey participant puts it, “Kiwis undersell everything”.
Copies of the report are available from www.marketmeasures.co.nz.
SUMMARY OF 2013
• 346 New Zealand technology companies completed the 2013 survey, a 25% increase on 2012.
• 49% were established firms, 36% characterised themselves as early growth and 15% as start-ups, with the majority either software, IT services or electronics companies.
• The majority (77%) continue to be focused on exporting their products, mostly to other businesses (84%). Exporting is focused on traditional markets like Australia, US and UK. Exports to the US have doubled since the 2010 survey.
• Average annual turnover growth was 39%.
• Firms continued to invest in sales and marketing, on average spending 29% of turnover. Consistent with international benchmarks, early growth companies (41%) spent significantly more than mature tech companies (21%).
What opportunities are there to improve sales and marketing performance?
Examining what sales and marketing attributes correlated with high growth amongst survey respondents showed some interesting insights into how Kiwi high-tech can further improve its performance:
1. Having a good understanding of all aspects of their target markets
2. Focus sales and marketing activity on distinct market opportunities
3. Investing aggressively in your sales and marketing programmes, especially promotion
4. Confidently execute their whole commercialisation programme, from product development to IP protection to promotional programmes
5. Measure their sales and marketing activities carefully
About Market Measures
The Market Measures study has been operating annually since 2009. The concept was developed by consulting company Concentrate, which organises the survey along with technology marketing specialists Swaytech. New Zealand Trade & Enterprise and AJ Park are the principal sponsors of the 2013 Market Measures survey.
It is supported by most of the industry’s representative bodies, including the New Zealand Hi-Tech Trust, the New Zealand Technology Industry Association, the Canterbury Software Cluster, the New Zealand Software Association, Taranaki Technology, and Priority One (Tauranga).
Concentrate is a technology marketing consultancy that helps Kiwi technology companies grow by finding and exploiting market opportunities.
The company uses its technology industry experience and an international best practice model to deliver market clarity for technology companies - practical, actionable insights into how to take their products to market successfully.
Swaytech is a specialist communications and marketing consultancy for technology companies. It offers a full range of services from public relations and communications, marketing strategy and execution, to print design and full web design and development.