NZ tech companies stunted by sales inefficiencies

Survey shows a lack of focus on sales efficiency, Market Measures says

The organisers of a survey of 300 New Zealand-based technology companies says it shows a lack of focus on sales efficiency that will prevent most of them from growing substantially.

Sixty percent of the companies in the survey were over 10 years old, 35 percent had annual revenues of less than $1 million and only two percent generated more than $50 million in turnover.

“New Zealand’s hi-tech industry will continue to be a few large companies and a long tail of small businesses, unless there is a much greater focus on sales efficiency,” says the Market Measures report.

It is based on a survey by marketing advisory firms Concentrate and Swaytech, sponsored by New Zealand Trade & Enterprise. It surveyed more than 300 New Zealand-based technology companies on their approaches to marketing and selling their products.

The managing director of Concentrate, Own Scott, said commentators often underestimated the huge challenge of marketing and selling New Zealand’s innovations offshore. “Our tech companies are developing world class innovations, but too few of them realise their potential as they struggle to cost-effectively scale their sales activity.”

The Wellington Customer Director of New Zealand Trade & Enterprise, Sharon-May McCrostie, said the organisation worked with high-tech companies of all sizes and stages to help them reach international markets and she urged companies going offshore to “relentlessly focus and invest in execution to really bring benefits to themselves and to New Zealand and grow bigger, better and faster.”

She said: “We are seeing more Kiwi companies executing competitive and truly innovative strategies and achieving game-changing results. But as the Market Measures study suggests, we still see companies staying in start-up mode for too long.”

Swaytech Director, Bob Pinchin, added: “The challenge for the small firms is extracting themselves from the long tail of hi-tech exporters by finding cost-effective ways to achieve substantial growth.”

To break out of the long tail trap, Pinchin said companies should adopt a three step approach. “First they have to increase the intensity of their sales efforts by focussing more tightly on which markets they target and the sales model they use. They need to become much better at communicating the value they deliver, so they can charge premium prices; and they need to be more adventurous in how they use digital marketing.”

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