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RFID Freeloaders

Some RFID vendors take advantage of the education that RFID Journal provides, while others just don't know how to market effectively.
Posted By Mark Roberti, 03.09.2011
I was exchanging e-mails with a gentleman who launched an RFID company a few years ago. He has bootstrapped the entire effort, and is now at a point at which he is seeking funding to refine his products in a way that will help him gain a greater share of the emerging passive-tag market. He mentioned that he very much hopes this happens, and that he would like to start advertising with us because "I know I am a freeloader."

By this, he meant that his firm has benefitted a great deal from the education that RFID Journal and other media companies provide to end users. There are a lot of businesses, of course, that have benefitted but have never supported us, and that doesn't bother me—if a company can not yet afford to advertise. If, however, a firm doesn't believe there is value in doing so, that's a business decision with which I strongly disagree. But in the end, I understand that every company must do what it believes to be in its own interests.

What I find frustrating, though, are companies that don't understand how technologies are adopted, and that make the same marketing mistakes I saw businesses make and pay for last year, and the year before that, and the year before that. Clearly, they haven't read Geoffrey Moore's books, Crossing the Chasm and Inside the Tornado (see Geoffrey Moore Discusses RFID Adoption Strategies, The (RFID) World According to Moore, Moore Has Spoken—Were RFID Vendors Listening?, More Musings on Moore and Geoffrey Moore's Strategies for RFID Adoption).

I have seen many companies adopt strategies suited for a particular period during which the market may be in the tornado, or mass-adoption, phase, rather than an early-adopter phase. Instead of targeting the handful of early adopters deploying RFID systems now (namely, readers of RFID Journal and other RFID publications), they keep marketing to the masses that attend vertical-industry events with no RFID content. And that's a mistake, as such people do not attend these shows seeking an RFID solution—and if they aren't going to RFID events or reading RFID publications, then it's very likely that they won't adopt the technology until the tornado commences.

Last year, the CEO of a company that offers a solution it adapted for food-services firms told me he wasn't planning to exhibit at RFID Journal LIVE!, because he was only going to do food-services events. I told him the early adopters were at our event, and that he should do both. He refused. That company is now searching for funding in an effort to stay afloat.

Marketing is a tricky business. It's not just about building a better mousetrap, or building it and telling the world about it. It's about building a better mousetrap and then finding those willing to invest in a new kind of mousetrap.

I've learned this the hard way—mostly from the mistakes I've made. But I've tried a lot of things and stuck with what works, discarding what didn't. I look at which strategies work for other companies like mine, and which don't. I've also learned to listen to those who make sense. Geoffrey Moore makes sense when he says a strategy must evolve over time. Both product positioning and marketing need to change, depending on what state of adoption the new technology is in. Interestingly, the approach that works best is counterintuitive.

Moore suggests making your product highly focused on a vertical industry at the onset, and then making it more generic or horizontal as adoption takes off. Some RFID companies are beginning to target vertical industries, but many offer a generic solution that they can sell to any company in a given industry. (You can almost hear some vendors parodying Apple: "Yeah, we got a tag for that.")

Moore suggests focusing heavily on one vertical market to begin with, and targeting early adopters with a laser-like focus (which is why our events are vertically focused, or offer vertical-industry tracks and seminars). As the market begins to enter the tornado, you need to switch from a vertical approach to a horizontal one, and switch from trying to find more early adopters to broadening your message to a wider market.

Some RFID marketers take a horizontal approach, while others employ a vertical approach, but go after those not in the early-adopter pool. Neither strategy is working right now. Perhaps they're betting on free coverage in RFID Journal, letting competitors fund RFID education and promotion while they put their eggs in other baskets.

The most successful technology providers are going after early adopters in vertical sectors—building critical mass one early adopter at a time. These vendors will be at LIVE! 2011, which will feature five vertical-industry tracks, as well as five preconference seminars focused on verticals. Those attending our conference and exhibition are early adopters within those 10 vertical areas. And the savviest companies exhibiting at LIVE! are using our social-networking site, RFID Connect, as well as other tools we provide to connect with end users interested in adopting RFID. That's the formula for success.

If Moore is right—and I believe that he is—those attendees will be the winners who will stick around for the long term.

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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