by Tim Smith, PhD, August 28, 2002

<back| |next>

IAR Systems, a Swedish company with operations in the US and around the globe, is providing products and services to make developing embedded systems easier. While the embedded system market as a whole is growing at 13% per year, IAR grew 45% last year to $14 million. Successes like IAR's in generating revenue in high-tech markets deserve our attention.

Embedded systems are computer systems that are placed inside a product other than a computer. They are composed of microcontrollers, operating systems, and software applications to perform a specific function or set of functions. Embedded systems are found in thermostats, anti-lock brakes, heavy machinery, aircraft engines, and many more places. Embedded systems are designed to be a cheap solution to a specific problem in automating, monitoring, and controlling a piece of machinery or process. A common characteristic of embedded system markets is their high-volume/low-cost unit sales in B2B businesses.

IAR's products are programming tools for microprocessors. They enable design engineers, hardware engineers, computer science engineers, and electrical engineers to quickly write assembly code and "tiny C code" for embedded systems. One of their tools works with ARM microprocessors, a type of RISC microprocessors, as well as 8, 16 and 32 bit microcontrollers. The code generated by IAR's product will run on an RTOS, the most common type of operating system for embedded systems that competes with Windows CE and JINI.

Recently, Nadim Shehayed, Sales Manager for the Western United States of IAR Systems, was able to share with me how IAR Systems has achieved such success in sales. He described the process as sales 101, but there are important caveats to this description. One is in regards to how what communicate with their customers during the sales process.

A sale for IAR goes through a four step process taking 30 to 60 days to close. Marketing will generate a lead. A technical sales person will describe the features. A demo version of the software is tested by the customer. Then a salesperson will follow-up and close the sale.

At the Embedded System's Conference held in Chicago last spring, IAR Systems was there providing demonstrations of their products at a well staffed booth. Their banners and product brochure consistently use phrases about how IAR's products help people be more productive in developing embedded systems and make it easier to develop embedded system applications. Given such high-level claims, many prospects will be intrigued and investigate IAR's ability to deliver on their marketing promises.

Once this high-level marketing message has generated a lead, a technical sales person will guide the prospect through the features and benefits of the product. The end-user and decision maker for IAR's products are usually the same person - an engineer. This engineer will ask detailed questions about how the product works and how it can solve their particular design problem. The technical sales person adds value in the sales process by guiding prospective engineers through tool's features and functions. Importantly, the process of explaining the features and functions supports the high-level claims made through the marketing communications.

The next step in the sales process is delivering a demo version of the software to the end-customer for trial. At this point, the marketing promises are supported though the using the features and the benefits of ownership can be predicted. In trial use, prospects learn that IAR's products truly make developing embedded systems easier while shortening the time to develop applications by removing 2 to 3 days of writing assembly code.

The final step is closing the deal. Once the prospect is prepared to purchase, engineering will place a purchase order with the purchasing department. At this point the salesperson will negotiate a deal. Mr. Shehayed said that regardless of the size of the customer, the sales process is relatively the same. The only difference is that large customers purchasing a network site license will require far more negotiation than small customers buying a single workstation.

IAR's communication during the sales process follows a well known marketing strategy of using the customer hierarchy of needs. In the marketing theory of the customer hierarchy of needs, base level attributes or feature produce benefits, these benefits results in low-level values and in turn these low-level values deliver for high-level values.

With IAR System's products, two of their features include a graphical interface for producing C code and a compiler for writing tiny C code. These features benefit engineers by removing the need to write C code directly and enabling them to produce code that has a very small footprint within a limited piece of silicon. That benefit produces the value outcome of enabling engineers to develop low-cost applications easier and faster. The easier and faster value outcomes result in increased productivity, another measurement for high-level value of increased profits.

Using the customer hierarchy of needs to develop a sales and marketing message can be done in any business. IAR has built the features, benefits, low-level values, and high-level values of the customer hierarchy of needs into its revenue generation process and message. You can too.

---
Tim Smith, PhD is a principal at Wiglaf, a Market Research and Sales and Marketing Strategy consultancy serving tech-driven businesses operating in business markets. Small and medium sized businesses select Wiglaf for our quantitative and fact driven approach. www.wiglaf.biz.

------------
Also Appearing in

B-to-B online, Oct. 2, 2002

<back| |next>