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What RFID Startups Should Do

Vendors that want to grow revenue must focus on companies that have expressed a real interest in RFID technology.
Posted By Mark Roberti, 03.03.2015

I have written many columns over the years about the mistakes that providers of radio frequency identification make. It's easy to criticize, but criticism without informed advice is just empty rhetoric. So let me explain what I tell the few RFID startups that seek my input.

First, let me make a point that might not be obvious to everyone. RFID Journal does more marketing of RFID products than any other company in the world. We run an estimated 1 million banners annually, send hundreds of thousands of e-mails, mail out some 200,000 print brochures and use social media aggressively. And that's just for our own products. We also run banner ads, host webinars and perform a lot of marketing on behalf of RFID vendors. Having done this for 14 years, I have a pretty good sense of what does and doesn't work. With that said, here are the steps a startup should take (if you have been in business for a while, you can also take this approach).

Pick the right industry. This is something most RFID vendors don't do, but according to Geoffrey Moore, the author of "Crossing the Chasm" and other important books about technology adoption, new technologies tend to be adopted in one vertical industry, and then a neighboring industry. At first, solutions need to be vertical-oriented, and then they can become more horizontal. RFID companies typically offer a horizontal solution that will work in any industry, but this requires customization for which end users often do not want to pay.

So what's the right industry?

There are number of factors to consider. One is the current level of interest in RFID, as well as the level of competition. In apparel retail, interest is high right now, but there is also a great deal of competition. Hotels have not invested much in RFID (though a few have switched to RFID-enabled door keys, and some have invested in RFID-based loyalty programs). Some banks have invested in RFID-enabled credit cards, and a few have used RFID to track IT assets, but by and large, this sector has not jumped on the RFID bandwagon either.

Perhaps the biggest issue is your firm's knowledge of the issues and challenges in a particular industry, and your ability to develop a solution to address those problems. If you really know retail and can develop a solution that will deliver a lot of value—and that is better than anything developed by your competition—then that is a sector to go after. If you know nothing about retail but are focused on it because it's currently hot, you will likely lose out to an RFID company that has a head start in that market, and that understands the problems retailers face and can help to solve them.

Develop a solution to a problem. Too often, businesses make a tag or reader merely because they can, without thinking about who will buy it or why, until it comes time to sell the product. If I were advising, say, a company that developed a tag able to be placed on a medical device that will be sterilized in an autoclave, I would encourage that firm to partner with a software company and a reader company. That way, it could retrofit autoclaves with a reader that could identify a particular medical device's tag ID and transmit that information to a hospital's back-end system. This would help it to track medical devices and ensure that they are properly sterilized, thereby reducing the possibility of infections and resultant lawsuits. Without the reader in the autoclave, the tag on the device isn't much good.

Market the solution to those likely to buy it. The first inclination of a company that has developed a retail solution would be to attend a retail event and try to sell the product there. Similarly, a company offering a system for tracking medical devices in an autoclave would immediately want to go to health-care events. This is not a terrible idea, as long as you have the marketing funds to do it, but it's unlikely that companies attending these events are seeking an RFID solution. Even though they may see the technology's value, they will likely wait until other companies are investing in it (see Understanding the Decision to Adopt—or Not Adopt—RFID).

The key, at this stage of the adoption lifecycle, is to target those who are looking for these solutions. Doing that does not require a lot of money, but it does entail a lot of work. It means going to RFID events, searching out attendees from the industry you are targeting and e-mailing them, rather than just sitting in your booth waiting for buyers to stroll in. It means responding to questions on RFID bulletin boards, as well as spending time searching for potential customers on social-media sites, such as RFID Connect. It means running target banner ads offering white papers or case studies that give value to those searching for solutions, in exchange for their contact information.

Most of all, being successful requires a change in your marketing mindset. Instead of thinking everyone in the industry is your potential customer, you need to realize that there are a select few who "get it" and are willing to invest in RFID today. And you have to focus all your attention on this select group. If you have extra resources available, then you can put effort and funds into marketing to the larger pool of folks in that industry.

Startups that do focus on companies looking to deploy RFID will win one reference customer and then another and then another. Eventually, RFID will hit the tipping point and the larger pool of end users in your industry will not only be ready to invest, but desperate to invest, because they will know that they have fallen behind the customers you already have.

This is the approach Moore describes in his books, and everything he writes is true. I see it every day. That is why RFID Journal changed its marketing approach, and why I spend so much time trying to help each company that contacts me. These are the people searching for RFID, the people ready to invest and the people we need to get to the tipping point.

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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