VDC Research: RFID, Barcode, Retail Automation & Self-Service Market Blog

For Long-term Growth & Prosperity, AIDC Suppliers Should Take a Second Look at Disqualified Leads

Can a lead generation engine be too efficient? 

Leading AIDC suppliers generate tens of thousands of leads each year through website interactions including web inquiries and on-line referrals, whitepaper downloads, software downloads, and through inbound traffic generated from various marketing initiatives.  Separating the wheat from the chaff enables these suppliers to quickly identify opportunities with an immediate need and supporting budget from those opportunities that that will require nurturing. 

The lead management teams we have worked with understand that the cost associated with a lead increases exponentially as the lead progresses through the sales funnel, and that the penalty for a slow response to an initial inquiry is a lost sale.   For these reasons, those leads with easily qualified budget, authority, need and timing (BANT) are prioritized and distributed efficiently, and hopefully effectively.  Those leads that are not as easily qualified, the vast majority of inquiries, receive less time, attention, and follow-up.

From the perspective of a quota carrying account manager with limited resources, sales effectiveness depends more on effective lead qualification than any other step in the lead management process.  By only burdening account teams with those leads that meet the organization’s strict qualification thresholds, AIDC suppliers are able to improve their yields on marketing investments and close a higher percentage of deals.  That’s a good thing, particularly during recessionary periods, when resources are constrained.  Simply put, relaxing lead qualification standards to provide more leads to account teams and channel partners makes no sense. 

What does make sense is ensuring that those leads that do not qualify today are properly characterized and nurtured to yield future business.  In our experience, the lead management bone yard is often teaming with longer-term opportunities and valuable insights regarding emerging applications.

In fact, we know of one supplier that is particularly adept at periodically and systematically reviewing disqualified leads and lost sales opportunities to identify underserved customer segments.  In one case, this supplier was able to identify an emerging application quickly, making strategic investments in new channel development by green-lighting a short list of channel partners that did not previously meet the organization’s partnership requirements. 

In less than two years, the annual revenue contribution associated with the emerging application skyrocketed, eventually eclipsing revenues associated with the core applications for which the product was originally designed. 

Too many suppliers, even share leaders, are often overlooking this rich repository of information, sacrificing long-term growth and prosperity for near-term gains in marketing and sales efficiency.  We would argue that this is precisely the right time to revisit disqualified leads and see what can be gleaned from them to refine lead qualification processes and drive future product development and channel marketing initiatives. This is one of the themes we’ll be exploring in our 2010 Barcode Segment Offering Analyses. 

In the next installment of this series, we’ll be taking a closer look at another source of lead management effectiveness and entropy: lead distribution.  Until then, we’d like to hear from you.  Does your organization frequently revisit disqualified leads, and if so, what have you learned?

Retailers Rate Highest When Their Digital and Physical Experiences Map

Last week, Paul Carr wrote on TechCrunch about Amazon's botched release of Michael Lewis' latest book -- The Big Short:  Inside the Doomsday Machine.

Carr pointed out that the book had 64 one-star reviews, more than the total of 2/3/4 or 5 star reviews combined.  This might have lead shoppers to the conclusion that the book was trash. 

But Carr looked a little deeper and found that more than half of the one-star reviews were in fact NOT reviews of  the book at all, but complaints about Amazon not releasing the book's Kindle version. 

In other words, the harsh reviews were the complaints of disappointed buyers looking for the Kindle version, who, in their expression of ire, were in fact, likely contributing to the frustration of Amazon shoppers who might have been perfectly happy to buy the bound copy -- if they could wade through the shrill Amazon commentary to get to the real book reviews.

Which provides us with a great case in point about the need for retailers to map their customers' virtual and physical experiences -- or suffer the gap. 

During the past few months, we have been writing about requirements for success for next-gen retailers in the post-recession consumer economy.  Mapping customers' virtual and physical experiences -- and vice versa, was one of our top five themes. 

We developed these ideas from polling retailers and other b-to-c operations managers -- hundreds of them.  We have been sharing our findings with friends at various events, such as Ryzex' Invitational at NRF in January, and in greater detail with our clients.  Our clients are retail technology solution providers. 

Retail technology solution providers' clients are the retailers.  Some of whom show up on BusinessWeek's list of the Customer Service Champs from their March 1, 2010 issue. 

We did a quick dive into some of the entries on the list.  We were looking for evidence linking companies on this list with strategies, and IT investments, that supported our assertion that mapping virtual and physical worlds is a key to success in this environment. 

Here is what we found in a quick and dirty investigation:  At least 5 of the top 10 ranked companies on the list rolled out solutions and/or programs that integrated customers' physical and digital experiences in 2009. 

 

We do not think this is coincidence.  Customers are only migrating further toward the internet -- the mobile internet -- to shop, buy and manage their accounts.  Consumers increasingly expect that their merchants will be at least as adept at transitioning from digital to virtual and back as they are.  When they are:  High rankings with JD Power and Business Week.

If you and your teams are developing, marketing, selling, installing and/or supporting traditional or next-gen retail solutions inside any b-to-c enterprises, you might consider making sure that your positioning meets retailers' need to balance and integrate their customers' digital and physical experiences. 

To stay on top of these opportunities, please consider working with us as we build out our 2010 Retail Automation Market Intelligence Service. 

RFID Convergence with Biometrics Takes its Next Step

The convergence of RFID with Biometrics has been anticipated for some time due to the ability of each solution to compliment the other – both technologies are proven to provide reliable and secure access control/ID solutions.  The marriage of these two technologies enhances the value propositions for each technology by providing a complimentary, value adding solution and an additional level of redundancy, a critical component of an advanced security system.  RFID and Biometrics have been evolving in parallel and competing for similar applications, so it was only a matter of time that these two solutions began to converge.

We’ve seen the rumblings of this convergence over the past few years from the introduction of several concepts and/or offering from firms that were integrating biometric functionality into RFID systems; however, these were more of a ‘mashing’ of already existing technologies and solutions as opposed to have fully-integrated and compatible devices.  

ZK Software, Inc., a developer of biometric scanners and RFID readers, just introduced the industry’s first fully-integrated biometric/RFID reader.  According to ZK Software, the iFace “detects the same face with 15 different facial expressions and is unaffected by varying light intensity, boasts one of the fastest fingerprint-and facial-matching algorithms available, includes a high definition "auto-learning" infrared night vision camera for user identification in poorly lit environments, easily integrates with any software application, and offers optional built-in Wi-Fi or GPRS for wireless communication.”  For the complete press release, click on the following link:  http://findbiometrics.com/industry-news/i/7886/

This is just the beginning.  This is a natural area of convergence in which both technologies not only compliment each other, but add value to the overall solution.   Keep an eye out – I think this will be a hotbed of activity and a green-field of opportunity in the years to come.

HIMSS 2010: Who Stands to Benefit from the Stimulus Package?

This year’s HIMSS conference was enormous.  With 888 exhibitors filling nearly all the space available at the Georgia World Congress Center, it’s impossible to understate the magnitude of healthcare’s largest tech event.  Everyone who wasn’t discussing the stimulus package was thinking about it.  With between $20B and $23B proposed for healthcare information technology (HIT), it’s easy to understand the all enthusiasm, particularly when you consider that the total HIT market was a meager $26B prior to the economic downturn.

But, this year’s exhibitors were cautiously enthusiastic, and justifiably so.  For years, market research firms have been touting healthcare as an industry ripe for technology investment.  After all, core enabling technologies including wireless networks, mobile devices, barcodes, RFID and RTLS are ideally suited to improve the efficiency and quality of healthcare delivery.  However, the adoption of sweeping reforms that would fuel these investments, e.g., EMR, CPOE, Unit of Use Packaging, etc., has been gradual, almost tectonic.  Some technology companies attracted to healthcare by the prospect of “full scale adoption” have since abandoned the market, while others have made measured investments in product development, strategic alliances and channel marketing that will likely pay dividends in the very near future.  What do these suppliers have to say about selling technology to healthcare providers?

1. Established processes are king.  Provide an investment roadmap that is evolutionary, not revolutionary.
2. Interoperability with existing IT infrastructure is essential (see the king with questions).  What does this mean?  Strategic alliances and co-development partnership agreements.
3. Every healthcare institution is unique. Reference accounts and ROI calculators only get you to the table.  The viability of technology investments must be proven in house.
4. Managed service offerings resonate.  The most effective managed service offerings provide the scale and flexibility required to justify ROI and extend core offerings to support new applications.
5. Healthcare practices within technology companies should be supported by dedicated key account management teams who provide accountability for installed systems and identify new business opportunities.

Whether a proposed $20B cash infusion represents a pay day for these suppliers remains to be seen.  But one thing is clear; those who have invested wisely in market development now have the market knowledge and relationships required to prosper, and the credibility required to fend off fast followers.

Lead Management Is the Key to Growing Channel Partner Relationships; Is Your Organization Managing Leads Effectively?

Lead Management was the leading AIDC supplier selection consideration in 2009.  Partners want better qualified leads, and more of them.  Many AIDC suppliers cut their marketing budgets in 2009, producing fewer leads for their channel partners (responses to informal inquiries suggest total lead volume dropped in 2009 from 30% to 40%).  Doing more with less requires that we devote more time and attention to each of the core steps in the lead management process:
 


 
Lead Creation

Years ago, I attended a channel strategy seminar at a Chicago business school.  Sales and Marketing executives from leading technology companies were in attendance.  A Marketing Director was making a presentation, sharing some impressive statistics regarding the number of leads her department had generated through various campaigns.  She wanted advice on how to more effectively manage her budget.  Her peers offered up the usual suggestions: outsource highly regulated processes, consolidate spending with a short list of highly qualified agencies, etc. 

Eventually, one of her peers, a channel sales manager from a prominent technology company asked, “what is the value of all these leads you are generating?” 

The following conversation ensued:

“I’m not sure I understand the question.”

“Well, you’ve undertaken a series of marketing campaigns.  Each of these campaigns represented an investment for your organization.  What was the return on each of these investments?”

“Oh, like the pie chart I presented earlier that showed the lead volume associated with all of our inbound and outbound marketing activity?”

“No.  I’m talking about the value of the leads you created, which is a function of the dollars you spent supporting each of those activities and the revenue you generated.”

There was an awkward silence.  I was stunned.  It’s been years since that seminar and the technology companies I work with have become more and more adept at managing their channel relationships.  Still, relatively few excel at lead management, actively managing and refining the process by capturing the data required and putting this data to work to increase their yields.

I’ll be devoting my next three posts to lead qualification, lead distribution and analysis, exploring common disconnects and discussing best practices.  If you have ideas or experiences to share, please post them.  The AIDC industry has been challenged by the recession.  Growth will depend on careful management of scarce and valued resources, and leads are no exception.

Innovation in ICs: Impinj, Verayo and Tego

As RFID solutions evolve and become more complex and core to an enterprise, additional focus is being placed system performance, security, and enhanced alignment with end use applications and environments.  Examples of this trend can be seen in the recent wave of product announcements and account wins from leading/emerging companies in the Transponder and IC communities, including:

• Impinj’s release of the Monza 4 product family
  Not only does initial testing by several end users, integrators, and test facilities rank the Monza 4 as one of the highest performing EPC UHF ICs available today, but the product family is also well-aligned with target application and user environment requirements.  Features include improved read/write reliability, more memory, and an innovative privacy solution.

• Tego and MAINTag Win Airbus Contract for High-Memory Tags
  Airbus will be using the Tego/MAINTag product – FLYTag – for part tracking applications on its A350 XWB fleet.  The use of high memory tags enables the company to store a plethora of information on each transponder, which will in turn provide increased visibility and business intelligence within its value chain. 

• Verayo’s introduces a Non-Clonable RFID IC
  Using silicon “fingerprint” technology, Verayo has been able to create a non-clonable RFID IC that ensures a higher level of security and authentication.  Initial applications of this first generation product include transit ticketing, security/access control, and anti-counterfeiting.

What Keeps Your Retail Clients up at Night?

Among other things, we think it’s the (in-store) inventory management vs. out-of-stock mitigation issue.  
Stores stock the “must have” merchandise according to an agreed-upon plan - but why does it seem so difficult for them to meet or exceed the plan?

• Store managers over-allocate their resources to inventory cost management and they wind up having more out-of-stock than predicted, expected or acceptable by today’s consumers.
• Store managers over-allocate their resources to out-of-stock mitigation; but they cut out margin due to inventory carrying costs.
• Store managers make matters worse by slashing prices to move the extra inventory and wind up losing margin. 

This is the retail CMO’s nightmare. 

On the other hand, the retail CMO that sleeps soundly at night has:

• An enterprise mobility solution that includes a small, dense, mobile computing/communications platform;
• An enterprise mobility software suite that includes connectivity to retailer and supplier supply chains to track inventory on the floor, in the stock room and in the chain; and
• Training programs for associates that have them focusing on customers first, merchandising second and inventory management third.

In other words; stores CAN meet plan with the solutions you provide – but are you positioning them correctly?