While speaking with international providers across different software market segments of PLM (e.g. PDM, CAE, CM, AM, CAM, Viz, DM, etc.) I am often asked how engineering software marketing and sales differs around the world, as well as how it has changed over the years in the United States.
In Part 1 of this PLM Alliances Alchemy post I shared the first five differences observed from my work, travel, or time living abroad:
- American technology markets are crowded, noisy, and confusing for both software sellers and industrial users alike.
- The U.S. economy offers a magical combination of imagination, motivation, innovation, and monetization opportunities.
- While Americans like to talk win-win and collaboration, our business culture is hyper-competitive to the point of obsession.
- The product you are marketing and selling to American managers is not the software code.
- It’s best not to lead the sales cycle with technology and certainly not with the product.
The next five discussed in Part 2 were:
- Having the better technology or best product at the lowest price or from the most qualified provider rarely closes the deal.
- Most sales cycles should be driven from top down and bottom up simultaneously, whether an enterprise solution or departmental software.
- Decision makers operate on a shorter time horizon for ROI.
- There is less continuity of professional employment and relationships are more transactional in nature.
- Because of this continuous change of personnel, deals are not done even when they are done.
And here are the final five:
- Establishing a presence and building momentum in a new geo market will take longer than you think. The time it takes to reach business sustainability is often independent of the monthly cash burn rate. Pouring more money in does not guarantee faster success! Regardless of how different your technology is or great your products are, give yourself several years of modest investment. Often having too much initial capital allows you to make mistakes you don’t know about and thus cannot learn from until it is too late. Learning from setbacks and losses in the beginning that result in a change of market strategy may be more valuable than quick gains from lucky one-off wins. A competitive advantage that international firms can have over their U.S.-based competitors is the ability to play a steady long-ball game without the gyrations due to the inflated expectations of venture capital investors, private equity, or the CEO’s quarterly Wall Street analyst calls.
- You cannot rely on a partner or reseller to do everything that needs to be done to open and penetrate a new market. Don’t expect others to invest in the fundamentals of your business when they rarely have enough capital and resources of their own. While partners can help with regionalization, they will not have the bandwidth, expertise or motivation to create or complete your go-to-market strategy, sales presentations, websites, proposal templates, value propositions, and demonstration scripts. You will need your own people either full time or frequently on the ground, especially if you have new partners to train and support. However, partners will be motivated to invest if they are given a sense of undisputed ownership in something that you uniquely craft for them. Read more about this in Myth-Stakes of Partner Building 103.
- Great employees, contractors, consultants, and partners are abundant in America. Hiring for the core competencies and finding independent contractors to do the rest is easy in the freelancing gig economy of the US. However, with so many seemingly qualified candidates the hiring process can be more time consuming and risky because you may hire the wrong person who can do substantial damage while the clock ticks and cash flows. Don’t overlook a deep pool of proven mature professionals, many who have taken early retirement and consult on the side. Likewise, there is a new generation of younger workers anxious to develop their own professional brand, especially with globally-minded multi-cultural firms. You may be told often that compensation is what attracts good talent, but the great performers are motivated by something very different; typically the opportunity to create and lead something out of nothing.
- Don’t let a common spoken language deceive you into thinking that there are not big differences in business cultures. Norms of decision making, organizational power, communications, risk tolerance, conflict resolution, uncertainty avoidance, trust, persuasion, and directness are culture landmines in waiting. What you will find even more exasperating is that the culture of an entire industry or individual company adds a whole other layer atop the international culture that must also be peeled back. In the U.S. the personalities in the executive office or egos of the founders can influence the company culture as if it was its own little country. While working internationally some years ago I experienced the challenge of managing a team comprised of eight different nationalities. While they all spoke good English, I had to learn the hard way that everything else was different in nuanced ways. Was I ever a rookie, but my resulting education was the best international MBA that could be earned. When I returned home I found the textbook “International Management: Culture, Strategy, and Behavior” by Fred Luthans and Jonathan Doh to be extremely useful in helping me to digest all I had learned, as was “The Culture Map: Breaking Through The Invisible Boundaries of Global Business” by Erin Meyer.
- In the U.S. there is less business shame in trial and error, experiencing failure, having to pivot your business, reinventing yourself or even in seeking redemption for a mistake. Trying and failing is considered more respectable than not having tried or playing it safe. Sometimes failure is even valued more by executives, boards, and investors who preach fail early and learn fast. It demonstrates grit and resiliency in the face of adversity. This cultural norm creates an ethos of professional freedom which can power risk taking and innovation at breathtaking speed in a way that is uniquely American. It’s one of the best characteristics of technology markets in the U.S. that we are exposing to the rest of the world. Although it also has a shadow side of unjustified overconfidence, excessive exuberance and not taking responsibility for mistakes when things go wrong.
In reviewing these final differences I am once again reminded how engineering software marketing and sales has evolved over the years. Yes, in response to earlier comments I received, there really was a time some years ago when you could effortlessly gain access to both users and decision makers, give them a gee-whiz demo without much requirements discovery beforehand, provide a rather standard proposal, and close a deal in a matter of a few weeks. The reality of engineering software sales today, especially at the enterprise level or as illustrated in the 15 elements shared in the last three posts, makes it clear those days are long over.
In fact, the execution of software marketing and sales now requires so much skill and “productization” of its own (read more about the sales product in Myth-Stakes of Partner Building 107) that some solution providers have abandoned it all together by resorting to just giving the product away for free to get users hooked. Little do they know that this just means the hard work and real selling comes later to keep the product installed and licenses renewed as there is fragile commitment to the product and less loyalty if any to a business relationship. What a shame that the process of understanding customer requirements, which builds relationships, is now often absent. But it serves as a reminder that deals are never done and customers are always in play.
What has your experience been with global engineering software sales and marketing? Share a comment below – anonymously if you like – whether you agree or not with the differences presented or have others not cited herein. In the final post of this series I will share insights from other global software sales and marketing executives.
For assistance with helping your organization to fully understand these differences, or creating a regionalized go-to-market plan for entering North America engineering software markets with partners, view our portfolio of consulting services HERE then contact Rich McFall at PLM Alliances at email@example.com.