ContractExec’s focus is on high-tech companies that deliver high-value, complex products and services to other high-tech businesses (B2B) and that need a ‘high-touch’ marketing and sales approach.
Given the nature of the industries in this segment also the contracts are complex, long-term, and therefore managing contract value is essential and a means to optimize margins during the lifecycle of a contract.
In this short post, I will further define this segment that is so important for the economies of so many countries around the world.
What are High-Touch High Value High-Tech B2B Companies?
The industries where high-touch, high-value, high-tech B2B products and services are sold are for example:
- High-Tech Manufacturing Industries (B2B)
- Information Technology
- Industrial Machinery
- Pharmaceutical and Medicine
- Engine, turbine, and power transmission equipment
- Semiconductor and other electronic components
- Navigational, measuring, electromedical, and control instruments
- Manufacturing and reproducing magnetic and optical media
- Electrical equipment manufacturing
- Other High-Tech Manufacturing Industries
- High-Tech Services Industries (B2B)
- Software publishers
- Wired telecommunications carriers
- Wireless Telecommunications Carriers
- Data processing, hosting, and related services
- Other information services
- Architectural, engineering, and related services
- Computer systems design and related services
- Management, scientific, and technical consulting services
- Scientific research and development services
- Management of companies and enterprises
- Other High-Tech Services Industries
- Other High-Tech Industries
- Oil & Gas
- Electric power generation, transmission and distribution
What are ‘High-Tech’ Companies?
Let’s start with what we mean with ‘high-tech’ here. I found a definition on the Harvard Business Review site which pretty much covers what the criteria are for your company to be considered a ‘high-technology business’:
- The business requires a strong scientific-technical basis (‘STEM’: Science, Technology, Engineering, and Mathematics).
- New technology can quickly make existing technology obsolete.
- As new technologies come on stream, their applications create or revolutionize markets and demand.
Now I am going to add a few more characteristics:
- The products and services are high-value and complex.
- The sales cycles and negotiations of the contract are lengthy.
- Their marketing and sales require ‘high-touch’.
What are ‘B2B’ High-Tech Companies?
Now the term ‘B2B’ stands for ‘business-to-business’; companies selling to other companies and not to consumers (called ‘B2C’). B2B can be divided into three main areas:
- Standardized products and services
- Engineered-to-order solutions (custom-designed)
- Combining the two above
What is a ‘High-Touch’ B2B High-Tech Business?
‘High-touch’ refers to the fact that the product is sales-intensive, as opposed to being marketing-intensive. Customers will respond better to sales than to marketing.
The two are often overlapping, as we will see in a future post I will be writing about account-based marketing and account-based sales. But the B2B high-tech companies we work with, the prospects and customers react more positively to personal sales and building personal relationships.
Factors that contribute to ‘high-touch’ and b2B high-tech industries being more sales-intensive:
- Price: the values and prices of products and services are higher and the economic decisions for customers are larger so you need to do more selling.
- Market size: The pool of customers is smaller, and they need more attention before they decide, which makes direct sales more inefficient.
- Product complexity: The products and services are more complex and require training so you need a salesperson and technical people to explain the features and benefits to potential customers.
- B2B: You are selling to companies and they need to be sold to.
- Relationships: your success relies on building a long-term relationship with a customer so you need sales to connect more regularly with people.
High-touch high-tech B2B companies in general are active in supply-side markets associated with innovation-driven high technology. The high-tech company’s top strategic and marketing objective is to achieve profitable commercial applications for output generated by their R&D.
In market development, R&D is the prime driver behind marketing. R&D has to make sure their high-tech efforts are based on the identification of market desires or customers’ requirements. Also here a ‘high-touch’ approach by bringing R&D into the marketing and sales cycle and meet with customers is essential for success.
Read more on this subject here.