What CEOs of RFID Companies Need to Know

Here is some much needed—though perhaps uncomfortable—advice for the heads of RFID firms.
Published: December 13, 2012

The current issue of our digital magazine contains an article in which I spell out 10 facts that CEOs should know about radio frequency identification (see It’s Time for CEOs to Take the Lead). The story’s premise is that RFID has been incubating for a decade, and has now matured to the point at which CEOs need to begin thinking about the technology. They need to do more than just sign the check for a system that will provide some incremental benefits—they need to think about how RFID can help them stay competitive or outflank their competitors.

While writing this story, I began thinking about the facts that CEOs of businesses selling RFID solutions need to know. Here are a few that came to mind. I hope you will take them in the spirit in which they are intended, which is to help your company be more successful.

1. No one cares about your technology. As I alluded to last week, many RFID company CEOs are engineers who had a big hand in developing their firm’s RFID products (see Prisoners of Their Own Device). They are justifiably proud of their solutions, but many mistakenly believe that faster read rates, longer read ranges or some other aspect of their solution is what end users care about. In fact, end users care little or nothing at all about the technology. What they do care about is solving their business problems or achieving business benefits. And they want the cheapest, simplest solution that will get the job done.

2. Your marketing (if you do any at all) stinks. Most RFID companies don’t conduct any marketing; instead, they rely on partners, such as Avery Dennison or Motorola, to market their solutions for them. Many smaller RFID companies that do market their products suffer from two major problems: They aim most of their marketing dollars at companies that will not deploy RFID any time soon (see No. 3 below), and they focus on what their technology can do, rather than on how it can solve end users’ business problems (see No. 1 above).

3. You need to read (or re-read) Crossing the Chasm. Geoffrey Moore’s seminal work on the technology-adoption life cycle makes the point—correctly, in RFID Journal‘s view—that during the early stages of adoption, most businesses will not adopt a new technology, even if they know they can benefit from using it. Rather, they will wait until there is a clear standard, a market leader and a critical mass of companies like theirs that have proven the business case. RFID has not crossed the chasm, and yet most RFID companies focus their marketing dollars on firm that won’t adopt the technology until it reaches critical mass.

4. Your sales representatives are not doing their jobs. Given that most RFID providers do little marketing, many end users don’t know which companies offer tags, readers, software or services. RFID Journal encourages exhibitors at our RFID Journal LIVE! conference and exhibition to reach out to end users attending the event via our RFID Connect social-networking and event-planning tool. RFID Connect lets RFID technology providers identify attendees who could benefit from their products, and then set up appointments for these individuals to visit their booth. Yet, reports from RFID Connect show that the vast majority of RFID providers do not use the site to reach out, which means they are missing out on meeting the early adopters most likely to deploy the technology within the next 12 to 18 months.

5. There are customers out there, and you can reach them cost-effectively. While RFID has not yet achieved the kind of growth predicted for it back in 2004, there are many companies actively using or seeking to utilize the technology. RFID Journal‘s Web site and digital magazine continue to be read by some 200,000 people monthly, and roughly 400 new people sign up every month to receive our e-mail newsletters. RFID providers could reach these individuals cost-effectively with pay-per-click ads that can be targeted to those researching specific solutions, such as item-level apparel tracking or asset tracking within hospitals. While RFID Journal has offered this low-cost, targeted solution, most marketing people still have not tried it (see No. 2 above).

I realize that selling RFID systems to skeptical end users is tough, but there are end users that want to buy RFID technology, and solutions providers are not doing a good job of reaching these potential customers. Later this month, we will publish The RFID Marketer’s Handbook: Smart Strategies for Finding Potential Buyers and Converting Them Into Customers. This report is based on data regarding the state of RFID adoption across a variety of industries, culled from news stories and surveys of RFID Journal‘s readers. We also asked our readership about their deployment plans, how they gather RFID product information and how they make purchasing decisions.

The RFID Marketer’s Handbook includes strategies for reaching these buyers cost-effectively. The guide will be made available in a few weeks, via the RFID Journal Store. Alas, I fear that most RFID companies will ignore it, hoping instead that their superior algorithm will draw millions of buyers to their doorstep.

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.