Create. Increase. Accelerate. tm
OutsourceWorld 2008 – Emerging Providers Missed A Great Opportunity
October 23, 2008
OutsourceWorld 2008 Observations
This year’s OutsourceWorld conference featured several dozen individual providers from regions and countries worldwide. As Esteban Herrera, the President and founder of NovaSphere Group LLC, a global sourcing consulting firm, said on his blog, we too were surprised by what appeared to be a light showing of buyers for such a dynamic, resource rich event. Many of the attending providers possess truly unique and creative business models, legitimate BPO, ITO, LPO and other outsourcing specialties and demonstrate a real alternative to the well known Tier One players and regions which dominate today’s outsourcing provider landscape.
Regrettably, as capable as these firms undoubtedly are in technical offerings, most were noticeably deficient in marketing and sales best practices. In fact, most of our conversations with the provider community went something like this.
“Welcome to fill in the blank Outsourcing. We have all these skills and certifications and many more which are not listed,” the provider representative would say, pointing to the pre-printed signs of certifications and specializations affixed to the walls behind them. Then they would add, “AND we are a U.S. based operating entity. Our headquarters are in fill in the blank (NY, CA, DE, etc.).”
“Great,” we would say to them, “But what does that mean for your customers?” This is where they would really puff out there chest and proudly exclaim, “We are a legal US company, but all our teams are off-shore in fill in the blank (China, Vietnam, Poland, Ukraine, Mexico, Jamaica, etc.).”
Most of these discussions ended here, with the providers telling us what they felt was their strongest differentiator, “So we cost less than India and we are fill in the blank (smaller, closer, easier to understand, less busy) than Indian ITOs.”
At this point we would thank them and move to the next booth where, with few exceptions, we heard the same message repeated again and again.
Selling Competencies are as Important as Technical Competencies
From the buyers we spoke with and those who presented, it is clear most feel a need to diversify their outsourcing engagements across some number of emerging providers and regions, but where they should look and what they will find when they get there is far less evident. There was a lot of discussion and speculation about locations “other than India”, but the actual advantages of these geographies beyond geographical diversification are not so defined. If labor cost arbitrage is truly becoming less of the driver than it used to be, then unique differentiators and value propositions for these emerging regions and providers are necessary to create a compelling reason for buyers to pay attention.
Here are our recommendations for the many emerging providers we spoke with who wish to improve their sales readiness. Of course, feel free to comment or add to the list!
The Top Ten Marketing and Sales Ideas for Emerging (Market) Provider CEOs:
1. The US business community is a multi-trillion dollar system, not a single, mass market. Carefully choose the segments you can best serve.
2. Think strategically about your sales model. Maximize leverage and speed to market.
3. Identify innovative and creative approaches to positioning yourself relative to your competition.
4. Be unique in communicating your value proposition and the benefits your solutions provide.
5. There is no stack of magic leads or secret Rolodex of buyers. No one who truly adds value to your marketing and sales process will work for contingency fees.
6. Buyers are looking for process improvements and innovation from outsourcing relationships, not just cost cutting. Identify examples you can provide during your presentations.
7. Stop worrying about whether a slow economy is good or bad for outsourcing. Your own decisions and actions determine your success far more than the latest stock market headlines or buyer surveys.
8. Do not ignore your existing customers in your efforts to grow your revenues. Remember, they are your competitor’s prospect!
9. Consider in-direct relationships (alliances, partnering, sub-contracting) as an alternative sales market.
10. Define a sales process for your company and follow it faithfully.
Comments
5 Responses to “OutsourceWorld 2008 – Emerging Providers Missed A Great Opportunity”
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Great ideas as always, Matt! I personally get asked these questions as to how can service providers improve their bizdev activities to generate better leads and more revenue. My first question to them is- why do they call it bizdev and not ‘sales’. Their answer: because they offer a complex array of services and the solution offered to every client is unique. Sales denotes selling things out of the box.
That’s the point. By hiding behind the cloak of ‘complex array of services’ ( by which they actually mean- “I’ll provide you whatever you want”), they are being lazy in not clearly articulating what they stand for and not recognizing what the potential client needs. Isn’t this very much like a job seeker not knowing what kind of a company or job he wants and who tells potential employers- “I will do whatever you want me to do” ?
I think this is the fundamental starting point for such companies in their quest to improve sales effectiveness.
Very perceptive read on the selling competencies Matt! I had some very interesting observations on the buyer/ provider dynamics, particularly on the human end of things.
We witnessed good provider participation from emerging markets such as Bangladesh, Jordon, South Africa, Costa Rica, and China (not to mention seasoned ones from India). Their interactions were segmented i.e. huddled among their own cultural groups and circles of comfort. I took the opportunity to visit a few providers and had water cooler type conversation on how they thought the convention was going and how well they are able to connect!
The people interactions were ‘cautious’ and ‘scripted’ at best. In one panel discussion about viable alternatives to India, the moderator’s closing question to the panelists was ‘What is your nation’s unique selling proposition?’ and each of the panelists called out ‘people’ as their single and most valuable differentiator. Interestingly enough, their interactions among themselves and the buyers did not bring out the best of who they are and demonstrate the value differentiation.
If I may, here is my additional sales & marketing idea for emerging providers:
1. Prepare your sales teams with business skills and cultural capabilities to succeed in targetted markets.
Good points, Matt; I largely agree with you.
Too often in a conversation about outsourcing, the answer one receives from a vendor is “Yes”. No vendor can be an expert in every area of a client need, and being clear about what cannot be done is as important to an effective customer relationship as being able to articulate what can be done.
As the leader of a vendor in the “Knowledge Services” space, I am particularly moved by point #6 in your list. Buyers, especially in today’s tough budgeting environment, are looking for clear, simple, and innovative improvements. They do not have the time to wait 24 months for the benefits to be seen, and the benefits cannot relate to cost-cutting alone.
I look forward to conitnuing to read your posts.
[...] America—almost any emerging provider or region could use them. My friends at 3forward have also posted some great advice to emerging providers trying to establish themselves credibly in the [...]
[...] At last year’s OutsourceWorld conference in NY (now called the Global Sourcing Forum+Expo, New York City, November 11-12, 2009) 3forward colleague Dan Hudson and I were shocked by the lack of sales readiness demonstrated by so many providers. (For the details read last fall’s blog post titled OutsourceWorld 2008 – Emerging Providers Missed A Great Opportunity). [...]