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Users Tell RFID Vendors: "Show Us the References"

RFID Update research highlights what influences prospective RFID end users and shapes their attitudes toward vendors. The results show nothing is more influential than reference accounts -- which are often scarce.
Nov 28, 2006This article was originally published by RFID Update.

November 28, 2006—In May RFID Update completed a major study that sought to better understand how RFID end users and solution providers around the world view RFID vendors and their marketing efforts. The result was the 2006 RFID Marketing Strategies Report, which measured what marketing messages and mediums most influence RFID professionals, and which vendors are effective at using them. Data was gathered from a survey offered to more than 9,500 RFID Update subscribers (see RFID Update Publishes Top 10 Rankings).

Results were received from 559 respondents. Of these, 302 identified themselves as working for companies who provide RFID products or services. The research included respondents at all levels of RFID experience and at all points in the purchasing process, from companies who had been running RFID systems for years to those who just started learning about the technology. There was also great diversity and large sample sizes based on respondents' stages of RFID implementation, company sizes and geographic locations.

One of the key findings from the resulting data was how strongly the RFID user community and reseller channels value vendor customer references -- references were the most influential item identified in the study. Respondents at all experience levels, company sizes, implementation stages and geographic locations placed tremendous value on reference implementations. The user community rated implementations as much more important than the vendor's company size, brand or focus on RFID.

By a clear margin, the number of RFID implementations completed was the most influential criteria contributing to the positive perception of a vendor. The next most influential criteria was whether or not a vendor had implemented RFID systems at companies similar to the respondent's own organization.

Reference implementations were much more influential than a company's marketing materials or how frequently it is referenced in media and analyst reports. The complete survey had 20 questions and dozens more response options, which produced hundreds of measurement scores, but no response to any question was rated more powerful or influential than the effect of references on shaping positive opinions of RFID vendors.

Perhaps references are considered valuable because they are relatively rare. Many companies who have successfully implemented RFID systems refuse to serve as reference accounts because they fear losing a competitive advantage by publicizing an effective process, or because they do not want to call attention to past problems or inefficiencies in their operations. Companies who are willing to share their RFID experiences often have their stories told several times over in multiple media outlets and presentations. METRO Group, for example, has been very open about its RFID efforts, efforts which have been cited widely in the press and at trade shows. (A Google search of "METRO Group" and "RFID" yields more than 150,000 results.)

RFID vendors who do the best job of showcasing their successful implementations have a strong opportunity to win the attention and respect of the end user and integrator communities. That creates a chicken-and-egg dilemma for RFID providers: how to get reference customers if references are required to attract customers in the first place? Chicken-and-egg barriers are nothing new to the RFID industry, although the focus has traditionally been on tag prices. Vendors have long told prospective users that lower tag prices will lead to ROI. Now they need users themselves to tell the story.

To learn more about the RFID Update 2006 Marketing Strategies Report or to purchase a copy, visit www.rfidupdatestore.com.
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