How to succeed in the Industrial Automation vendor market when you are small.
The global industrial automation hardware market is projected to grow from USD 205.86 billion in 2022 to USD 395.09 billion by 2029. It includes products such as Programmable Automation Controllers and PLCs, Industrial I/O, Motion Control, Panel & Industrial PCs, Industrial Web Panels, and Industrial Monitors.
Likewise, the industrial automation software market is expected to reach $59.5 billion by 2029. The products in this market consist of everything from SCADA to Enterprise Resource Planning systems and everything in between. However, it is usually segmented into enterprise-level software and plant-level software.
Both markets are dominated by a few key players such as Emerson Electric Co. (U.S.), ABB Group (Switzerland), Siemens AG (Germany), General Electric Company (U.S.), Schneider Electric/Aveva (France), Honeywell International Inc. (U.S.), Rockwell Automation Inc. (U.S.), Omron Corporation (Japan), Microsoft Corporation (U.S.), IBM Corporation (U.S.), Mitsubishi Electric Corporation (Japan), Hitachi, Ltd. (Japan), SAP SE (Germany), Oracle Corporation (U.S.), and HCL Technologies Limited (India).
Due the high cost of implementing some of these systems, along with familiarisation of the system itself by operations staff, there tends to be little switching of suppliers once an incumbent vendor establishes itself within a production business. This effectively acts as a barrier to entry for other vendors, even if their set of products addresses the needs of the production business better. Of course, this is a simplistic view and other factors do come into play, but by in large it tends to be very difficult to displace an incumbent vendor once it has embedded itself into an organisation.
So, if you are smaller innovative industrial automation vendor, how do you firstly get a foothold in the market and secondly grow your share of it?
I’ve been in sales and marketing since I left school in 1982. Before setting up Evestico, a market entry and marketing services provider to industrial automation vendors, I have worked in senior positions across a range of industries. This included B2B, B2G and B2C. I’ve worked for large corporates with huge marketing budgets and small start-ups with virtually no marketing budget at all. Along the way, I’ve experienced a lot, met all types of people, been thrown into all kinds of situations and worked on solutions for just about every scenario. I’ve pimped myself out to global consultancies who pick my brains for an hour and then charge you $10,000 a day to regurgitate what I’ve told them. Just the other day I was invited to a country’s embassy because they needed help writing their state trade strategies. I’m not trying to blow my horn here, just establish the point that I’ve been around the block at bit.
But getting back to the point, which is why you are still reading this, here are few simply things you can do if you are a small industrial automation vendor or distributor struggling to grow your sales.
- Presentation is everything – It’s the same as going for an interview. You’ll wear a new suit, polished shoes, crisp shirt/blouse etc. The same goes for all the touch points your company has with the outside world, i.e., your website, brochures, office, staff, how you answer the phone etc. You also need to come across as both knowledgeable and communicative, so customers have confidence in you.
- Make a lot of noise – It goes without saying that you can have a great product, but if no one knows about it……well you fill in the gap. PR is the first thing, far more cost effective than advertising and it also provides great content for your website and social media. Find a PR agency that specialises in this sector. They will have all the right media contacts and you won’t have to spend hours teaching them about your sector and explaining technical terms. Write about things your customers care about, not your products.
- Lose the marketing bull – So what I mean by this, is that companies who sell stuff in our space often write web content and brochures full of marketing and industry buzz words which means absolutely nothing to their customer base. Write in plain English/Spanish or whatever your native language is. Explain exactly what you can do and how it will help your customer. It sounds obvious, but few companies do it.
- Keep one foot in the B2C market – Often what happens in the B2C space will eventually trickle down into the B2B space. It takes a while, but if you want to stay ahead of your competitors, look at how B2C companies are marketing and selling their products. After all, your customers are just people who also buying products from B2C companies and comfortable doing so.
- Continually look to innovate and be different – This almost follows on from the previous point. The bigger players don’t do this well because it is too risky for them. But they will quickly look to copy you if they see it working for you. So always stay one step ahead of them.
- Have a plan but make it flexible – You need to have some sort of plan, otherwise you’re going to go nowhere, but constantly review it and be prepared to swap out activity in the plan if you need to change tack.
- Have a ‘f#ck it’ fund – This is my favourite, but not popular with larger businesses. Quite simply, it is an amount of money that you are prepared to write-off to try a new and risky venture. So, if it doesn’t work, there is no come back. But you need to try new things without a fear of failure.
- Go for small wins – Don’t try to break into Premier Foods from Day 1 with a complete enterprise package, go for Joe’s Food Company and then also just solve one tiny problem he has first.
- Fill the product and market spaces that aren’t cost effective for the bigger players – Bigger players tend to sell products that suit multiple industry verticals in a general sense. Because of this, you can exploit the specific needs of just one industry vertical and become a specialist in that.
- Form alliances – No matter how much you try, your product or range of products isn’t going to solve all the needs of your customer, but that is exactly what your customer wants. Take the example of a water utility company that have a problem with water leakage. Now, you may have a product that detects a drop in pipe pressure, but that doesn’t really tell the water company where the leak is. Another company may have some geo-mapping software, whilst another company may have drones with imagery technology that show unusually damp ground. Together all three of you might provide the complete solution if you work together.
I’m Robin Buxton, Business Relations Director at Evestico. I hope you found this useful. If you want to buy me coffee one day and pick my brains further, I’d be happy to meet another human.