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It's Not About Technology

The problem many RFID solution providers have is that they are too focused on their products instead of on potential customers' problems.
By Mark Roberti
Feb 23, 2015

I received a lot of positive feedback about my column RFID Goes Into the Shark Tank. I'm glad people enjoyed it. When I first wrote it, I was concerned that some RFID solution providers might feel I was poking fun at them, but nothing could be further from the truth. I have a lot of respect for the folks who produce RFID solutions. But most are struggling to sell their solutions, and I wanted to illustrate a big reason why.

Many of the problems come down to an obsession with the technology. More specifically, vendors are in love with their products. I get that. I am very proud of RFID Journal's products. But putting too much focus on the products and their features makes it harder to sell them.

Here are a few of the mistakes I see solution providers making regularly.

1. Not providing a budget for marketing new products. Many RFID companies invest heavily in producing some very impressive new products. In most cases, they do not allocate any budget for a product launch. This is true of established companies as well as startups. In his new book "Escape Velocity," Geoffrey Moore advocates having a marketing budget equal to the product-development budget—so, for instance, if you spend $400,000 to create a new product, then you should spend the same amount to advertise it.

2. Not inventing what the market wants. There are certainly many new products launched each year that were developed because an end-user company needed a tag or reader that didn't exist. But some RFID companies develop products because they can, and not because the market is asking for them. I often ask firms who their product is aimed at, and typically get the answer "anyone who needs it." I've also talked to businesses that have said they had a solution for an industry that doesn't seem to be looking for one (perhaps because the problem isn't serious enough).

3. Inventing what only one company needs. As a corollary to number two, some firms invent a solution that only a single company requires. They find a customer that wants an item-level tag for tracking, say, eyes of newt, and they create it. Then they get some short-term revenue out of it, but can't sell the tag to anyone else.

4. Promoting product features instead of the problems they solve. If you look at most materials produced by RFID companies, they usually focus on the "speeds and feeds" of their product—how fast their reader can interrogate tags, their tags' read range or the number of reports in their software. End users are interested in solutions to their particular problems, and only want to discuss the specifications of a certain product after they are convinced it might solve them.

5. Not partnering with other companies to create a complete solution. Most RFID firms sell tags, readers or software. Some make none of those things, but provide systems-integration services. This means that a company with a problem RFID can solve often has to engage two, three and sometimes four other firms to create a solution. That increases the risk involved and turns a lot of potential customers off. If RFID businesses focused on the problems that potential customers face, they might band together to create exciting and market-changing solutions.

Ralph Waldo Emerson reportedly said that if a man could make a better mousetrap, the world would beat a path to his door. That might have been true in Emerson's day, but today, there are so many companies claiming to have a better mousetrap that those with rodent problems have become cynical. They don't believe any claims. And they certainly don't care if your trap flies shut 20 percent faster than the nearest competitor. They want the cheapest, most effective solution to their problem. Period.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

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USER COMMENTS

Philippe de Matteis 2015-02-27 11:41:38 AM
Thank's Mark for that v ery good paper and insight! I totally agreed and more. I noticed that most of the RFID vendors are technical engineer as well as RFID company founder or leaders...of course their visible value added is include exclusivelly in technics and their marvellous product... Very often they do not really understand why they do not succeed as a business company... I have many exemple of that...

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