My first advertising campaign on Google was in the consumer tourism market in 2004.  We did a series of campaigns – Google, classified ads, print ads, and channel partners – and we tracked the ROI of each one by linking each sale to its originating campaign.

The whole prospect of deciding exactly how much you’re willing to pay for a new customer is very exciting.  I remember choosing how much we would be willing to pay per click for each new visitor to our web site, and what our daily budget would be.  I was used to advertising in yellow page ads and classified ads, where we’d cross our fingers and hope for the best. 

As part of our phone sales process we asked each buyer exactly how they found us.  We found that our Google campaign was the ROI winner by a wide margin. 

Since then I’ve spent thousands on Google campaigns to promote my own companies and those of my customers.  You learn what works very quickly when it’s your own money at risk. 

If you’re not advertising on Google today, then there are a few questions to consider:

• What are your ideal customers typing into Google when they go looking for what you sell?
• How many potential customers are searching on those terms every day?
• What if you could convert 1% of those searchers into actual leads?  How many new leads would this be per day? 

You can answer these questions in 5 minutes.  Go to Google’s free keyword tool (link to https://adwords.google.com/select/KeywordToolExternal) and find out now, or contact us and we’ll help you find the answers.

This is a bad conversation. How did it happen?  Your bluechip client knows that your firm delivers real value, but they also use overseas systems integrators, and they’re asking you to start “collaborating” with the Indian firm in hopes of cutting costs and boosting project ROI.

In other words, they’d like to have your senior resources modelling the solution and spec’ing requirements, and passing them over to the offshore firm for development, testing, and delivery.   This looks great on paper.   Standard IT resources like project managers and programmers are about 1/8th as expensive, so your hourly rates are competing with the overseas daily rate.  Spend $120 in North America for 1 programmer hour, or spend $120 in India for 1 programmer day.

You have to expect that well-managed companies will be asking these questions and testing offshore capabilities on non-core projects.

And cost cutting is the obvious response to economic downtown, so these conversations are going on more than ever.   I suppose Thomas Friedman predicted it when he wrote “The World Is Flat” in 2005.

But what do you do when a major bluechip client starts talking this way?

The only way to win these conversations is to avoid them.  You can’t win on the cost argument.  And your firm probably isn’t structured to make money with your best customer-facing resources defining solutions for off-shore delivery.

But how do you avoid the conversation?  The trick is to position your firm as a solution provider and to sell your solutions to decision makers who want to make or save money through your solution.  That’s it.  Your margin should be a function of your solution’s value,  measured in ROI.

On the other hand, if you price your solution using cost-plus pricing (i.e. you estimate the work effort, apply your desired rates, and call that your price), then you become susceptible to IT directors and procurement managers asking about hourly rates and wishing they were daily rates.

“Where there’s mystery, there’s margin”. Sell unique solutions that make or save money, and choose buyers who care more about their own business outcomes than your business inputs.

Of course IT may have to get involved as part of the complex sale, but their role should be limited to due diligence, alignment, and validation.  If your firm becomes perceived as a company that sells IT labour, then the mystery is gone, and the margin will go away.

Admittedly this is easier said than done.  Selling into the business directly is a more aggressive win-or-lose stance than cozying up to the IT director as a preferred supplier.  Positioning your firm as the group that specializes in “solution X” is a gutsy move.  It implies that you’re not the friendly and competitive neighbourhood systems integrator that’s ready to “solve business requirements through technology solutions”.   It implies that you’re not hungry for that low-hanging fruit of convenient local business.

But low hanging fruit will make you sick. If you position as a local systems integrator, then your non-customer facing resources will be subjected to commoditization and competition with overseas suppliers.  This is a losing game.  Daniel Pink describes this trend very clearly in “A Whole New Mind: Why Right-Brainers Will Rule The Future”.

The good news? You can position as a solution provider and avoid these outsourcing discussions altogether.  Take the road less travelled of selling solutions based on the client’s business outcomes rather than your labour inputs, and choose specialty areas where there’s enough client value and mystery to allow generous margins.

So the entrepreneur brainstorms its awesome potential in a room of whiteboards and creative colleagues, captures it all in a business plan, builds a prototype, and secures funding to “take it to the next level”.

Fast-forward 6 months. Product development took longer than expected, but version 1.0 of the platform is finally ready to go.

Now What?

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