Modern warfare in Telecom Equipment sales to mobile operators

Market ShareMarket Share


•Competitive Play- the big game
•Demand driven design and R&D
•Customer Relations

•Perceptions are Differentiators
•They will buy from you if they want you
•Group of customer Individuals matter
•Eventually it’s the technical rating
•How far will you go to get intelligence?
•Strategy of War
•Perseverance

Equipment sales methodology in telecommunications industry has changed quite significantly over the last 5 years. And so has the competitive landscape. While in the past it was dominated by likes of Motorola, Siemens, Nokia, Lucent, Alcatel, Ericsson and Nortel, it’s a very different story today. The meteoric rise of likes of Huawei and ZTE in such a short time is the most under studied piece in the telecommunications industry and most of the players from Europe, United States and the world outside China have grappled to understand what hit them. Explanations are often sparse, confusing and dissatisfactory. Looking at just the Radio Access Network market share, it’s now two European equipment makers versus two Chinese with Europeans shrinking and consolidating over the last years.

Chinese suppliers over the years have executed very systematic tactics, implemented advanced supply chain concepts, mastered customer organizational behavior, strategized and deployed art of war in corporate world, disseminated propaganda to create perceptions, and adopted very aggressive stance many times to be bailed out by the financial and government machinery, which has very few avenues today to maintain China’s growth. It’s not the lower price that wins one business. What it takes to win in today’s world as Telecommunications equipment provider is a thorough understanding and the grit to execute on one’s plan.
Competitive Play- the big game
Game theory, signaling and price discovery happen almost real time during a sales engagement. You come to a conclusion that no amount of study can predict or even ascertain probabilities to an outcome. If you break the price discovery into broader pieces, it will be a function of individual styles of account managers for each supplier, procurement manager, willingness of the supplier to be a partner, product, willingness of the operator to partner, and certain hidden power centers for all the suppliers and the mobile operator. The interplay of these factors and timing, is quite complex. However eventually, certain patterns will emerge. For example, in a three player scenario two suppliers will always be closer to each other than the third. Questions to ask then are how long these two will stick together, what price levels have been signaled, how each of the player will position oneself and how long can they thwart the third one out. What is important, to win is that one cuts through the clutter and understands on a real time basis where the competition is heading and then change price strategy based on this real time information. For example, if you are winning, then where to stop, if you are losing then how to make price situation tougher, and then how should one time these moves. Something the Chinese suppliers have perfected and execute on a war footing. Every piece of information is valued, and a system, that can filter, cross verify, process, think and respond to this real time information, is well in place. The only way to beat the game is to play the competitive information game better than the competition.
Another tactic that is deployed is, spreading misinformation that customer is not spending. This misinformation if spread successfully, will discourage the competition to deploy enough resources in an engagement and will benefit the one spreading misinformation through larger share of wallet, better margins and weaker competition.
Demand driven design and R&D- “Designed, researched and developed to Order”
Demand driven supply networks are well accepted and understood in supply chain in manufacturing in industries such as retail, consumer products, automotive etc. In telecom however, suppliers have taken it to another level. If just in time production, lean manufacturing, and lowering variability in demand data is being perfected to optimize inventory and expedite time to market in other industries, in telecom all of design, research and manufacturing is a result of customer requirement or real time demand. Any parameter such as port density, throughput, open APIs, power, form factor, size etc. that is required by the customer is committed at the time of compliances and technical evaluation to reach the number one rating, even though the product may not have been designed or planned at all. Post customer commitment ‘Designed and Researched to Order’ delivers in committed time- for the most part. Any product is the outcome of tradeoffs of parameters such as quality and time to market and the envelope get pushed further every day. May times though, quality invariably suffer due to wrong commitments and inability to deliver. However, there is no doubt that this process of designed and research to order has eliminated a lot of inefficiencies and resulted in record yields on R&D dollar investments. Looking even deeper to this approach one would realize that to begin with certain risks were taken but as you progressed you could manage those risks. In High Tech industry measurement of key KPIs post deployment for on-ground performance is very difficult. Risks get managed through fine prints, operator’s inability to measure, agreement or disagreement with operator on what to measure and eventually relationship with operator personnel engaged in measurement. Nobody wants trouble with a deployed network. However, “researched and designed to order” is a first that the Chinese suppliers have mastered and despite tradeoffs on quality they have been able to manage the deployments very well. If not managed at a presales stage one’s product will get killed by someone with this approach even if it is superior. Unless the competition adopting such strategies is killed by highlighting the hazards of design and researched to order, right at the presales stage, one is sure to suffer at the commercial stage.
Customer Relations
Every customer individual you deal with has weakness and strengths of character. None is perfect after all. It is up to the sales professional as to what behavior he accentuates. However, make no mistake that some of one’s competition is finding it easier to capitalize on your customer’s weakness of character. A simple cognizance will help the sales professional to counter competition by his own attempts to accentuate the strengths of customer’s character. For example, greed of an expensive dinner can be countered by a personalized training of technology concepts that can help one progress in career. What’s important though is awareness of attempts by your competition at individual level and a counter measure through one’s own positive engagement. Pulling your customer out of your competitions grip of especially if one has slipped deeper will never be easy. However, full awareness of the situation and having one’s own plans to help one’s customer succeed personally in an ethical and positive way will be much more rewarding.
Perceptions are Differentiators
In technology selling, a great amount of work happens evaluating the technical specifications. Given, that some of the suppliers are adept at committing to higher specifications which are still in the works, selling becomes a game of perception. In such a scenario those suppliers who stick to their own product specifications and aim to defend them are always playing a catching up game. The perception game then begins. Pick up the parameters where your competition may be most vulnerable, commit to a higher specification and then run the better perception campaign at every level in the customer organization through constant messaging and propaganda. After a point, the same message starts to resonate after several reflections by various customer individuals in different meetings. This is how ones product gets established and eventually the perceptions start to determine if your product is a differentiated one and is rated better.
They will buy from you if they want you
A sales engagement is a long drawn process with its twists and turns, ups and downs and sometimes it leads one to a situation wherein ambivalence to push ones customer any further or wait starts to dominate vision. What’s important to keep in mind is that you can sell only if the customer wants to buy from you. Has one managed to create a want or desire in ones customer to buy ones products? This want or desire supersedes any strategy, plan, or trick. The focus on every effort then should be to create a bigger need and developing a desire in your customer to want your product. Price discussions are contingent on big is the want.
Group of customer individuals matter
A sales engagement especially a “Request for Proposal” driven one involves a number of touch points and many stake holders in the customer’s organization. From an execution standpoint it is important to manage the whole process to meet the requirements. However, one has to be cognizant of the fact that eventually there will be very few, perhaps only 3-4 individuals that would decide the fate of participating suppliers. One has to identify, and engage them and make constant attempt to position and demonstrate ones differentiators. The point is that if energy and resources have to be channelized, it has to be on this group of customer individuals more than the other stakeholders. It is ironical that all the efforts, hard work and engagement will culminate in decisions taken, basis the perceptions and judgment of so few individuals. However, that’s the harsh reality!
Eventually it’s the technical rating
Most of the sales managers would always harp on price as the most critical element of winning a deal. That’s not completely untrue. However, in reality, battle is won in the technical stage. The harmless appearing technical meetings where discussions are mostly, genial are the most treacherous. Minds of technical evaluators are constantly working measuring and rating one’s products though it may not appear so. How the technical evaluators are constantly rating ones products will determine how eagerly, commercial teams will be willing to negotiate with the supplier or pay a premium for supplier’s products at the commercial stage. Winds are not always in favor of a supplier. What will withstand the pressure of time and lobbying by one’s competitor is the rating of one’s product which will remain an undeniable truth and survive various tests during a sales engagement. So a high technical rating is indispensable.
How far will you go to get intelligence?
There are references, innuendoes, and few very harsh accusations on few suppliers that they go to the extreme to get competitive or customer intelligence. In today’s world where smart phones are everywhere, it is very simple to click a picture, make a video or record a conversation. On a similar note, in today’s materialistic society, where traditional values are fast eroding, every means gets justified, and the lines between right and wrong are fast eroding. Sometimes, ethics are hard to explain if you question the very principles of modern organizations. If the objective of one’s organization is to create shareholder value then what entitles shareholders to make disproportionate profits as compared to salaried individuals who are sweating and slogging to make those profits. If the objective is to create stakeholder value then again, why are financial benefits not proportionate to all of the stakeholders? Most of the times, those in position of decision making in customer organization get swayed and fall trap to the slippery slip of taking material or other favors, consciously or subconsciously. Out of fear of misalignment with seniors or for personal benefits, even cautious individuals in organizations do get swayed completely in favor of certain suppliers, even though their behavior is not in the best interest of their own or their organizations. Most of the times realization dawns too late to make amends and the personal and organizational damage is done. Besides, it is extremely difficult to correct one’s course.
Most sales person, will increasingly, come across this situation. We recommend that one sticks to one’s organizational values and path of righteousness without falling into the temptation of gross wrong doing. Of course, one has to keep one’s eyes and ears open. Competitive or customer intelligence when traded, should be in exchange of knowledge, education, better project and supply deliveries, and offering career enhancement opportunities for the larger benefit of customer organization, individuals and relationship of trust. No material or cash benefits should be traded to seek intelligence, is the bottom-line.
Strategy of war
Most of vernacular in cultures across the globe is filled with wisdom on winning strategies on war. More of these strategies seem to have taken over industries today. Whether it is the Art of War or adages that tell you to surround a city to take it down, you can find war tactics implemented all around you in a sales situation. Intelligence and espionage, strategic attack, forces, variations and adaptability, and so on, all of these are adapted to a deal scenario and deployed in a very systematic way. The only choice one has in order to sell is either to be alert, intuitive, aware and smart to deal with situations as they come or train one in these strategies. These strategies are deployed and executed in a planned way by the suppliers and they have their organizational apparatus at the senior sales and management level executing at a mass scale. A supplier is sure to get killed mercilessly without deployment and execution of one’s own strategy of war at every level in the customer organization.
Perseverance
A sales cycle follows its own path, like a free flowing river. To stay the course the one quality that will see one through is perseverance to survive every terrain, season and time. There will be times when it may seem like the end of the road. What is important to keep in mind is that organizational relationships don’t get built or broken in days and months. It takes time for relationships to mature and once built they do not break so easily either. Keeping a longer term objective and considering every success or failure a milestone is the only way one can build one’s own or one’s organization’s credibility.
There are no shortcuts to success and there is no substitute to success built on sound fundamental values.