Every business has a central challenge. With my first business it was this: We were distributors for several famous software companies, reselling their products in South Africa through a network of partners that included IBM, Unisys, NCR, Accenture, DiData, etc, often as part of large systems solutions.
Our challenge was this: we had no control over the features or price of the products we distributed. One year our suppliers would come out with great features and aggressive prices, another year we would be lagging the competition and be crippled by being more costly. Yet year after year we outsold most of our competitors and were ranked by our suppliers as one of their top distributors in the world.
How did we do this? By using a simple strategy called “the flower”
The key to the flower is realising that your clients don’t just need your core product - they need many other things with it, such as support, training, third party developers, a user community, etc. These are the “petals” of the flower that make up ‘a whole product’. And, unlike the core product in our case, these we could control.
By carefully crafting world-class “petals” for our flowers, we created ‘whole products’ that were vastly superior to the offerings from our competitors who had a strong core but suffered from poor or missing petals. We did this by carefully analysing all the petals we would need for each flower, prioritising these and then developing superb services in each area. Overall our products shone compared to theirs - and consistently outsold them too!
The flower in action
It is a quarter to five on a quiet Tuesday afternoon at my first company. A call comes through to me. It is a Mr Robertson, who tells me that he heads all the government business in Pretoria for NCR. He says “We’re looking at quoting Oracle for a very large government deal, but I saw your ads (we ran award-winning ads for our products - another petal) and I’d like to ask about your Progress RDBMS”.
We chat for a few minutes. Then after hanging up I write out a support slip for one of our marketing staff (every client interaction in our company is logged - another petal). She walks through to our reception area and picks out an already compiled information pack from one of a number of pigeonholes. This one is tailor-made for government clients, and is full of stunning marketing materials, many of them designed by us (another petal). She slips it inside a DHL pouch and addresses it. At five o’clock on the dot the DHL courier arrives at our offices. We didn’t phone him - we paid extra to have him come at five every day, in case we have something to ship (part of our marketing support petal).
By 8.15 the next morning the information pack is on Mr Robertson’s desk - because we pay DHL a premium for “first thing in the morning delivery” (another part of the petal). At 8.30 Mr Robertson receives a call from one of our staff to ask “did you received the package Mr Robertson? Does it have all the information you need? Is there any other help we can give you?” (completing the petal).
A few minutes later I get a call from Mr Robertson. He says he has been asking my competitors for information for over a week and is still waiting. He is extremely impressed with how responsive we have been, and would like us to work with him on a multi-million government tender. We will go to do many millions of business with him over the years to come.
Protecting your idea
I often say to entrepreneurs “you have a great idea, but it could easily be copied. How will you protect it?” The one answer I often get is “we will patent it”. But in reality many things cannot be patented, patenting things is expensive, and fighting patent infringements if someone does copy your idea is even more expensive.
The other answer is “we will keep innovating and adding new features ahead of the competition”. This is naive. If a larger competitor decides to move into your space, the chances are that they will easily be able to outspend you on development.
Both of these strategies are focused on the core of your offering. Differentiating yourself by coming up with world-class petals is a better approach, because like the proverbial bulk of the iceberg, these are harder for your competitors to see and copy. My competitors never really saw how I was consistently pulling ahead of them, because they never saw all the millions of small details that went into our “flower”.
We all yearn for beauty and elegance and ease and style in our lives. You give this to your clients when you give them superb whole products. Next week we’ll look at how to put the systems in place to support them, as you work
Neil Hinrichsen is the founder of Koi. An entrepreneur all his life, Neil has cofounded two startups both of which were acquired, and is now working to develop the next generation of entrepreneurs in SA through his Koi platform, comprising a methodology for startups, classes, coffee sessions, mentoring, the KoiTips newsletters and a thriving online group. He loves working with young entrepreneurs who want to change the world. Neil also helps Microsoft with their BizSpark programme for top startups, provides mentoring at the Innovation Hub and other incubators, consults with corporates, advises the CSIR in South Africa on commercialising research, is an accredited specialist with the University of Pretoria and serves on the advisory board for Stellenbosch University's LaunchLab incubator. On the personal side he's involved in youth ministry and mentoring township teenagers. Learn more about Koi: KOI GUIDE | EMAIL neil@koistrategy.com
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