Xero UK teams up with CBR to explain how a partnership approach can help tech start-ups overcome the distribution challenge.
From CRM systems to point of sale and inventory management, developers around the world are creating new and innovative cloud-based B2B apps that make routine and specialist business tasks more efficient. However, despite the fact that most of these apps are relatively low cost for users, attractive to investors and target a huge and often underserved audience, many fail to achieve any real scale.
Add to this challenge the fact that many of the IT firms responsible for sales and distribution are vying for the largest untapped and difficult to reach market on the planet when it comes to cloud software – the small business. However innovative or ground-breaking the technology, according to Compass, a specialist research firm that compares and benchmarks data for tech start-ups, the biggest stumbling block for start-ups in getting new apps off the ground is distribution.
So, having done the hard work in developing the app, what can smaller tech firms do to get it noticed? Here are some top tips from Gary Turner, MD at Xero UK.
1. Evaluate the best sales channel
Rather than being an effective route to market, legacy channel partners can be a barrier to change. Specifically, many are resistant to cloud operating models that may pose a potential threat to their businesses. For these reasons, leveraging existing channels can be challenging. So it’s up to those marketing B2B apps directly to think hard about the most effective distribution route, seek advice and develop new channels. Many companies opt for in-house sales teams to sell directly to small businesses. However, while this can be effective, it is also costly.
2. Sell with confidence and be prepared to convince disillusioned early adopters
Many small businesses are resistant to technology change because they are often confused about how cloud apps work and view them as a complex, expensive or insecure. Conversely, some early adopters may have had a bad experience of using cloud-based software that may deter them from considering any new SMB apps. As such, it is crucial for those marketing the product to be clear on the efficiencies or other business-driven advantages their app delivers, as well as being prepared to overcome security concerns.
3. Use social media – but don’t expect to go viral overnight
Firms without big sales and publicity budgets sometimes turn to viral methods such as social media to market their apps. Yet, while this can be effective, they rarely achieve the kind of rapid adoption enjoyed by games and other consumer-focused apps. After all, unlike bored teenagers and commuters that are happy to kill time shooting pigs on Angry Birds, most small business owners don’t sign up for business apps on a whim.
4. Don’t fear Goliath
One of the reasons smaller tech firms struggle when it comes to distribution is because they are up against a large incumbent. While David vs Goliath stories exist across all verticals, larger and more established technology brands are especially hard to disrupt because of the proprietary ecosystem they have built over decades. However, while reputation goes a long way in any industry, small businesses can and will be persuaded by an app that can solve a business problem more effectively, enable them to work more efficiently than the technology currently used or offered by a larger rival.
5. Speak to established providers and explore a partnership approach
In the world of open APIs, a partnership approach is one of the most effective routes to market – especially when the app occupies a previously unfilled niche in a wider solutions infrastructure. The established provider benefits from extending its functionality and providing added-value to its end users, while a previously unheard of app benefits not just from market exposure but also its association with an established and trusted brand. In this respect, it doesn’t have to be a case of David versus Goliath, but rather David and Goliath.
In the competitive world of technology, the bottom line is that start-ups that seek out opportunities and capitalise on the best distribution channels stand to gain the trust and attention of small businesses which may otherwise fail to notice them.
For more information on Xero’s partner ecosystem, visit http://developer.xero.com/partner/