My centre is giving way, my right is retreating, situation excellent, I am attacking
—Marshal Ferdinand Foch
You make a nice UAV, and you wanna compete with DJI? By recent estimates they hold almost 75% of the US market. That’s a big number in any market. How did they get there? Mainly through excellent product marketing to fill what was then an untapped market. It wasn’t rocket science and they didn’t cheat, they did what any company should do:
- They built a clear understanding of their target market. Initially the primary market appears to have been adult male consumers under 35, and a broader mix of consumers probably represent the bulk of their market share today.
- Being basically a toy company, they understood mass production and distribution. Today their product can be purchased in Target and other retailers.
- They built a cool drone. When other UAV’s tended to look like flying collections from an Erector Set, DJI’s Phantom looked like a mini Federation Starship.
- Realizing that producing a quality image was the number one performance feature they needed to expand into commercial markets, they bought into a really cool camera company named Hasselblad and subsumed that outstanding brand reputation into their own brand. The timing of this acquisition was excellent, and the subsequent product integration very competent. (Note: DJI is known to hold a minority stake in Hasselblad, and reliable sources believe they acquired a majority stake in 2017. This last has been neither confirmed nor denied)
So how do you compete with DJI (and everybody else)?
Do what Marshall Foch would have done, flank ‘em! How do you do that? First, focus on B2B markets. The consumer market is rapidly going to a commodity sell because of DJI, there is not much anyone can do to pull that back. So that leaves selling to business/government, otherwise known as business to business or B2B. Selling technology into Government can be very complex, and requires a very different marketing/sales approach worthy of another article. This article will focus on commercial B2B.
B2B is in some ways similar to consumer sales, and they differ widely in others. B2B buyers are:
- Looking for answers to problems, not instant gratification.
- Making decision in groups, and those groups are getting bigger
- Doing a lot of research to support a decision. In fact, they may have done much of their deciding before they ever speak to your sales person.
- Not going to buy from a company they don’t trust to support their product
How can you successfully win business in the B2B drone market?
You Target Vertical Markets. How? Like this:
- Identify several target markets where they have money (the big players are financially healthy), and ideally are already embracing some sort of technology change. Digital transformation is a good one, may industries are currently trying to make this important change in the way that they do business.
- Pick one of those markets. This is your “market niche”. Be prepared to be wrong. Study the heck out of it, know who the players are find out what problems they are talking about, watch how they work. Understand their language and ways of communicating, and how they do business.
- Sit down with your product marketing team, and ask “of the big issues this market has, which of them can we solve with what we have, or can make, or acquire to add to what we have to build an answer”?
- Develop a plan to build that answer (hint: it involves way more than your UAV)
- Build a plan to take the answer to market
- If you don’t have the money, now is the time to find out if you can get some to finance your plan
- STAY FOCUSED. Go after that niche with everything you have.
I can hear my marketing brethren grinding their teeth right now. That’s because I just glibly described in general terms a process that can take months, in some cases years, to execute properly. Small companies don’t generally have the time or the resources, so they make do. If you don’t have a product marketing team, assemble one ad hoc from your stakeholders and others who have sweat equity in the company, then do your best. It is generally better to act on 80% certainty that you are right, than to try to get to 100%, which will probably never happen. In any case, talk to people who understand you and your business, don’t do this alone.
The market leader can’t be everywhere at once
Why is it worth doing as opposed to what you are doing now? Because the market leader can never cover all of the edges of the market, especially in this case where they really aren’t verticalizing at all. DJI is trying to turn this market into a horizontal commodity market; where price is the primary consideration. Prospective B2B clients who are trying to solve problems with UAV technology are left to work with what is available in a commodity market, investing their own planning and resources into a technology that is not mission-critical to them. They will pay more for answers to their problems.
There are many more advantages to target marketing that work well for smaller companies:
- You can study the vertical and identify common issues you can solve, perhaps in creative ways that the market leader can’t deliver
- With understanding of the common issues it is possible to develop use cases and business cases in the language of your customers
- Sales teams can be trained on a process that works with how the buyers make purchases
- Companies can focus scarce marketing resources on a small well-defined group of prospects. This means you can exhibit at the right shows, speak at the right conferences, put the right keywords on your website to drive traffic etc.
- There is an opportunity to understand industry trends and buying cycles unique to that market
- Verticals often have common beliefs on what constitutes an acceptable level of vendor service and support. Knowing this a company can assemble infrastructure to meet and exceed expectations. In B2B, this can win the business away from a superior product (or the market leader).
To move forward on a path to solving your prospective client’s problem, it’s time to accept several realities:
You can’t market to everyone
Target marketing requires you to focus your efforts on winning one segment of the total market. That means your dollars and time will not be spent appealing to other segments. This doesn’t mean you won’t take an order from outside your target, but bear in mind that they may be looking for a different level of support than you planned to provide. This first understanding is crucial, you not only have to buy into it yourself, you have to convince everyone in your company to commit to it completely. This can take some effort, but it MUST be done.
Your Client doesn’t care about your drone
They care about the answer you bring them to a problem they have. They care that solving the problem with your solution will provide more value than what they invested in your solution. This is critical; you aren’t selling a UAV anymore, you are selling an answer to a discrete problem. If your messaging, your website and all of your marketing materials lead with the drone hardware, you are missing your market. Drones are cool and are a physical entity you can hold, it is VERY hard to stop talking about the drone and start talking about your answer. That’s what you have to do.
Your Client doesn’t care about features
It is tempting to switch from talking about maximum lift, endurance and flight time/charge time ratios to a dialog involving the operational features of your solution. You have to focus on benefit, and how it applies to bringing your client value.
Taking your answer to market is far more complex than it looks
You can’t just hire a sales guy and get your engineering department to build a new website. First and most critical, you have to get your whole company to commit to the segment you have picked. You have to assemble a sales process that begins with effective lead generation, then prospect qualification, presentation, close, fulfillment and support. All of these parts must be in place. With a major player sucking up much of the oxygen in your market, you need to be very organized and focused to reach the market segment you are targeting. Also, today there are privacy considerations that add new complexity to the marketing process.
You can’t wrap yourself in the flag and expect them to buy from you based on that alone
They may be as patriotic as anyone, but remember they don’t buy influenced solely by emotion and “gut feeling”.
You probably need help
When you have grown your company organically from nothing, it can be hard to ask for outside help. Now is the time to do it. Experts in the field can help you define your product. Experts can work with you to set up the right sales process for your target market, one size does not fit all. The good news is, these people generally aren’t hiding. You can find them commenting on LinkedIn, Twitter, and speaking at conferences and events, some of which might be local to you. Talk to them, and find out what it would take to get some assistance. If you elect to go it on your own, there are some excellent marketing books out there, but before you dig into those, I highly recommend “Crossing the Chasm” by Geoffrey A. Moore. First published in 1991, it is still highly relevant, and will give you a framework for the dynamics of the UAS market. I’ll have more on this soon.
I understand that this is a lot to unpack. In a follow-on article, I’m going to offer some use cases in potential target markets, with outlines of comprehensive solutions that address real world problems in those markets. Some of these use cases will not be possible in the current regulatory climate. Some will be technically very difficult. I contend that now is the time to plan for opportunities that could open up very soon, and engage forward thinkers who are already looking for answers.
You can do this. Good luck. Connect with me on LinkedIn if you have any questions or need some further clarification.