By Francis Moran and Leo Valiquette

In a recent post, we introduced BlueArc, a maker of networked attached storage (NAS) systems for managing unstructured data in high-performance computing applications, and Ken Rosen, a corporate strategy and marketing consultant who worked with the Blue Arc team in the mid-2000s.

Rosen talked about how sales for the company had hit a plateau by 2004, forcing BlueArc to evolve its marketing and sales model. It could no longer rely on prospects being able to figure out for themselves how and why the product would be a fit for them. BlueArc needed to talk with key decision makers within its target markets and learn how to relate its products to their needs in a language they understood. It needed to win over those individuals with the influence to champion BlueArc within their organizations.

“The goal is to dissect the brain of the market and know at a conscious level how the market thinks … do that and you have a shot at being able to speak their language about things that really matter to them,” Rosen said.

In 2004 and 2005, BlueArc focused on animation, drug discovery and Internet services, then moved on to the oil and gas upstream exploration, design and simulation markets in 2006 and 2007.

How did BlueArc track and measure the efforts of its sales and marketing teams against results?

“A key tactic was simply identifying key markets as the only markets visible in the CRM system,” Rosen said. “This sounds trivial, but if reps saw that management was only tracking prospects in key markets, it was a strong signal that focus was serious.

“At the same time, pipeline was tracked by vertical market, so it was obvious long before deals closed whether the focus was working. Finally, the marketing team assigned a point person for each market to work with the sales teams. This person was motivated to support reps in closing business in the market and worked with reps to hear what parts of the targeting and messaging were and were not working.”

As always, executive focus was critical. In a telling moment, a successful, senior sales rep said, “I don’t think I need to know about these markets. I just need someone to get me in front of a prospect so I can ask about their pain.” BlueArc CEO Mike Gustafson and VP of sales Chris McBride responded with a single message: “Sales skills and the ability to do discovery are table stakes. Outselling the competition means our reps walk in the door knowing about key customer challenges, so they can become trusted advisors, not students.”

What was the outcome?

The result of this focused market segmentation and primary research? BlueArc posted six consecutive quarters of record revenue growth.

Executive buy-in and a shared philosophy were crucial. This, after all, had to be a team effort across the organization that could rely on whatever support it needed, from the front-line sales staff to the engineers.

Rosen remembers his first conversation with Gustafson.

“I began the meeting with, ‘Here’s what I believe, if you agree, let’s talk, if not …  we probably shouldn’t go on: If you want to sell to me, you have to solve my pain. And if you want to even discuss my pain, you have to do it in my language.’”

Gustafson of course agreed.

“To sell to the enterprise market, you have to talk to the audience, ask them what keeps them up at night and listen to how they talk about their challenges,” Rosen said. “The more valuable insights don’t come from asking about what product or feature customers want, they come from asking customers what they do, need, and crave.”

This entire process can be led internally or with external help such as Rosen, but the challenge of doing it in-house is significant.

“There are two practical challenges: first, if you believe in doing the research, it can be hard for someone in the company to ask questions without selling…and hard for a prospect to open up without feeling like they are in some sort of sales cycle. On the other hand, if you believe you should just hire someone who already knows about your markets, it simply isn’t practical to find someone whose task is to be, and continue to be, an expert on all functions of all the potential markets you can sell into.”

What were the key lessons learned?

On his blog, Rosen has distilled the lessons learned from his experience at BlueArc into a five-point scale for deciding which target markets to pursue.

To quote:

1. How intense is prospect pain in the area you serve?

If the pain from the problem you solve isn’t setting prospects’ hair on fire, if they don’t think about it almost every day, your sales cycle will be longer. Personally, I greatly prefer customers who use words like “pain” over “need,” but both trump “desire.” Sell aspirin, not vitamins.

2. How well do you solve that pain?

This is where most companies are most comfortable, because it is the most inward-looking question: Do we solve the problem? For too many companies, a “yes” to this question implies “OK, let’s hire the sales force and start advertising!” We humbly disagree. It’s one of five criteria and you’re not likely the only firm solving the problem.

3. How strong is the competition?

This criterion is pretty obvious: less competitive environments ease the sales cycle.

4. Can you actually close deals?

Many companies think about the problem they solve without worrying about whether they can actually reach a decision maker. Maybe he only buys integrated products. Maybe she only buys from Fortune 500 companies. Maybe he hasn’t changed vendors in 10 years because the cost to change is too high. Maybe the ideal market is fragmented and requires a sales channel too expensive for this stage of your development. You have to convert someone whoneeds your product into someone who buys your product.

5. Long-term value of the market

Market selection doesn’t mean you cut your growth aspirations. Far from it. It means you believe the fastest path to growth is by saying something compelling to someone specific. So our final criteria: What is market growth? Will success lead you to adjacent markets (Geoffrey Moore’s bowling pin strategy)? Does one market offer better-known references? Does your team have special background that makes success easier?

This is the second article in a continuing series that will feature case studies and anecdotal stories from entrepreneurs, consultants and veteran marketers about their efforts to develop, implement and measure marketing programs to bring technology to market and grow market share. We invite your feedback.

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