Raymond Bentinck interviewed on Search

Stephen Arnold is the President of AIT an organization specializing in electronic publishing, marketing via electronic media, online system engineering, and database design. In addition to this his organization owns several well known and respected sites such as Beyond Search and the High Gain Blog. Steve interviewed Raymond Bentinck on the August 31, 2011 specifically around the Search marketplace.

The full text of this conversation appears below. You can visit the High Gain Blog website here.

Steve: How many times have we engaged in a “what’s ahead” conversation around search?

Raymond: I seem to remember that we chatted about this every time we met up in London. I believe that the “what’s ahead” conversation is probably more relevant now for search than at any time in the past ten years so I look forward to the next time we get the opportunity to catch up face to face.

Steve: What is your new venture?

Raymond: Thanks for asking. Over a number of years, I saw a general business trend where some companies seemed to defy the odds and become more successful than could have ever been predicted. In computing, examples include: Google, Apple and Facebook and these companies went on to define their marketplaces. I was always fascinated by how they acted differently to their competitors and what it was that made them more successful.

From my experience, when I started Exalead in the UK, I knew we would not be successful by following the same approach as the other search vendors. We were competing against the leading players at the time and Autonomy was even based in the UK. Why would anyone choose a start-up like Exalead over these established players in the marketplace?

Out of necessity we addressed the market in a different way. Over the years that followed, this proved successful and we consistently performed better than Exalead’s other subsidiaries, won almost every competitive engagement against the competition and replaced the market leading solutions in many Fortune 500 companies.

When I decided to leave Exalead, I took the time to analyze how other successful companies and salespeople worked and tied this to the latest and most innovative scientific research into how people made purchasing decisions. I believed that any business could be hugely successful by emulating the way these companies operated.

What I found was they all used the same five principles that enabled their success and positively impacted the perception of their companies and products, motivating customers to buy their solutions.

We call these businesses Superior Performing companies.

This work became the basis for the Unified Sales Method or USM. We believe that USM changes the paradigm around how companies should operate to be vastly more successful.

Steve: I have heard consultants talk about high performing sales teams. What is the difference between high performing and superior performing companies?

Raymond: Good question. When consultants talk about high performing companies they describe how to change a business’s performance to hit or surpass their revenue targets. There are also a number of sales methodologies that provide processes and procedures that promise to improve performance.

These methodologies, however, do not provide a formal understanding of why a client buys one solution over another. Successful sales people use a combination of these sales methodologies tied to their own skills and experiences in order to achieve their targets. This is one of the reasons why the successful sales people before training in one of these methodologies tend to be the same after training.

The fact is that even after training, companies find it difficult to maintain high performance selling over a period of time.

There are, however, examples of companies that work fundamentally differently to the majority and are able to significantly outperform their competitors over many years. These are the ones we describe as superior performing companies.

Steve: Can you give me an example?

Raymond: Let’s look at Apple. Many people will say that Apple was lucky with the iPod. They were a struggling company that hit the jackpot with their MP3 player. But if you look closer something more fundamental was happening.

There were many other MP3 players on the marketplace produced by companies that were in a better position than Apple to succeed. If you think back to the time when MP3’s were launched, few people predicted that Apple would rise to become the dominant player.

Apple addressed the market differently to their competitors and as a result they became the most successful and ultimately defined the marketplace. You could argue that Apple is now so successful that it is in a position to redefine the whole music industry. This is a huge achievement for a computer company.

Another example is with the launch of the iPad 2. This product was released around the time a number of other competitive products were launched such as HP’s Touchpad.

Both products were in reality very similar, although, if you look at the specifications, the HP product had some major advantages over the iPad 2. In fact, many consultants predicted that because of this the HP product would take a large proportion of the market-share away from the iPad.

As we now know, the reality was completely different. The iPad has gone on to cement its position in the marketplace whereas, the last I heard, Best Buy is struggling to offload its original stock of Touchpad’s and the product has now been discontinued by HP.

When I am talking to senior executives within companies I am always interested to know why they believe certain products and solutions did not match their company’s revenue expectations. I hear the same old reasons every time: the sales team did not understand how to sell it, customers just did not “get it”, the competitors spent a lot more on marketing or the competitor’s product had certain functions that customers required which were not in their product.

These are all logical but the problem is that none of these, in reality, are the real reasons. If they were then the secret to business success would be simple… fix these problems. I spoke to one senior executive who told me that his sales people had for years complained that their product did not have a major function and that this was the reason they lost deals to a competitor. He was frustrated because once this function was added to the product, they still lost to this competitor. All that had changed were the reasons given as to why they lost.

The difference between the iPad and the Touchpad was not down to the ability of the sales people. Best Buy’s sales people, for example, were able to sell both products. It would be unlikely that providing a better sales methodology to Best Buy’s sales people would make any difference to the success of them selling the Touchpad.

The difference between the two products was also not down to functionality because as we have already discussed they were both very similar. If anything the Touchpad had the edge over functionality provided in the iPad.

The problem is that although the majority of companies believe they understand why people buy their products and services, they don’t. The secret to business success is by understanding the real reasons why people buy. These reasons are more insightful and interesting than anyone would imagine.

In reality, the differences between success and failure of these products was all down to how Apple approached the marketplace and used its understanding of why people bought their products and what to say in order to inspire and motivate people to buy. This is so fundamental that it influences every aspect of how Apple runs their business.

Steve: So, how can one vendor influence someone to buy its search solution over another?

Raymond: From your own experience with search and content processing developers and vendors, Steve, I am sure that when you ask this question they will give you a list of reasons based around their product. For example: We have the most scalable search engine. We have the fastest search. We have the most advanced architecture. We have the smallest footprint.

Some will even go into considerable detail about how their solutions achieve these capabilities.

Customers may justify the reasons for buying a search solution based upon these factors but research has shown that these are not the real reasons why people buy.

It turns out that people use the exact same methods of coming to a decision between different search products as they do when choosing between an iPad and a Touchpad.

Concentrating on what the product or solution is capable of did not work for HP and it does not work for search vendors. People buying in complex environments base their decisions upon five principles: human behavior, compelling visions, human perceptions, effective stories and value.

Understanding each of these, why they are important and how to use them is the key to success. This is what USM provides.

Steve: Is USM not the same as any other sales methodology?

Raymond: We see USM as complimentary to sales methodologies and not competitive. I would, however, argue that understanding USM is more fundamental for business success than implementing a new sales methodology.

Some executives believe that they can transform their business by getting their sales people selling more effectively. Although this is important, as I pointed out with the Touchpad example above, this does not guarantee success nor is it even the most important factor.

Is the reason why Apple is successful down to a sales methodology or is it more likely to be their compelling vision, their effective communications and how they motivate customers to buy their products?

If you are still unconvinced, here’s an example. Take a marketing document from any search vendor’s website. Simply replace the vendor’s name and logo with another and show it to someone familiar with the search space. When I did something similar, as part of my research, no one questioned whether this material was really written by this second vendor.

It is the same with just about every piece of communication that search vendors produce. Even though we would like to think it is compelling, the majority is ineffective, does not meet the aims we intended and is anything but memorable. This is a waste of time and money.

Which sales methodology on the marketplace today, for example, will explain how to create a compelling vision, make your marketing material inspire customers to engage with your company and motivate them to buy your solutions?

Which sales methodology on the marketplace today can truly claim to provide the secrets that can transform your business into a Superior Performing company?

Sales methodologies can provide more effective sales processes and increase your success in individual sales but do not get fooled into believing that they explain why people buy your solutions or that they will transform your business.

Steve: So you seem to be a long way away from search. Are you still interested in search?

Raymond: Absolutely, you do not spend as long as I have in a sector of the industry and lose interest. I still keep up to speed with what is happening and I truly believe there is a huge opportunity to redefine search into a hugely successful sector. However, for a vendor to succeed it requires a change in approach.

For example, whether we like to admit it or not, many customers need a lot of convincing and proof that search can provide a solution to their mission critical business problems. Even after they have implemented an innovative project, there can be reluctance by the customer to promote search as central to its success. Can you imagine someone who implemented Business Objects being reluctant to talk about their successful “business intelligence” project?

A search vendor who takes the opportunity to modify their approach has the potential to redefine the search market in a way similar to how Apple redefined the MP3 marketplace.

One thing is for sure, by not understanding the techniques taught within USM, the chances of this happening are extremely slim.

Steve: Search vendors seem to be evolving in many different directions such as data management or business intelligence solutions. Do you think any of these will be successful?

Raymond: Vendors at the moment are searching for the Holy Grail; the solution or application that will propel their company to being the premier vendor in a massively growing market sector.

Some vendors have realized that selling feature/benefits is not successful. Many of them are opting to building and selling solutions such as data management and business intelligence because they have seen other companies being successful using similar solution selling techniques.

However, for every one successful vendor selling solutions there are many that have failed. The principles of why people buy remain true no matter whether you are selling a product, services or solution. Attempting to develop solutions without understanding the principles behind USM will probably turn out to be an expensive mistake.

Steve: Open source search is either the greatest thing since the pain au chocolate or digital rat poison. What’s your view of open source search?

Raymond: I am fascinated with open source search and its perception in the marketplace.

If you were taking a business course, you would learn that the successful companies are the ones with the best solutions in the market, the ones that employed the best people and/or were better financed than the competition.

But here we have something that breaks all the traditional rules. Open source is not managed like a traditional business, there is not a huge marketing budget, there is not a single sales team and the engineering team is not organized like other search vendors.

The people who advocate open source have an over-riding and infectious belief that this is the right solution to meet the requirements of the customer. Can you see similarities between these people and fans of Apple products? This is not a coincidence.

Whether you believe in open source products or not, understanding the principles behind its success are hugely important. Realizing that these same principles are the ones behind the success of Apple or any other superior performing company is the key to unlocking your businesses revenue potential.

Steve: General purpose search seems to be on a path toward commoditization. What’s the next search horizon you are watching?

Raymond: As we have discussed several times, I do not believe that search is a commodity. As a user on websites, I am frustrated too many times with search to believe it is a commodity product.

I have been hearing that general-purpose search is now a commodity ever since Google entered the marketplace.

Just because an idea takes hold, however, does not mean that it is true. For a product to be described as a commodity it would not matter which company sold it for the product to be a success. For example, I get my electricity supplied to my house by one company. I could switch suppliers within a day without any disruption. This is an example of a commodity product.

When Google entered the general-purpose search marketplace their price was perceived to be lower and it was easier to implement than the leading search vendors. However, it was not true that there were no other vendors selling general-purpose search at the time. For example, companies could download Inktomi and deploy it in less time than it took to order and receive a Google box. What is more, Inktomi was sold at a price equivalent or lower than Google and people who had used both products would tell you that Inktomi’s product was also technically far superior.

Therefore, we have two products that you could argue were commodity products. One was more advanced, was cheaper and was quicker to deploy while the other transformed the marketplace. Google broke the traditional business rules.

Google was not a success purely because of better marketing. Although a larger marketing budget helps there are many examples of companies who are in a great market position but failed when they launched a new product. Google was also not more successful because it had a better sales team than the competition. Do you think that providing Inktomi with the best sales methodology would have had any effect on the final outcome?

The major reason for Google’s success was because they started from the basis of why people would buy their product. They created a vision and strategy that linked into these reasons and as a result were successful. You would be forgiven if you believed that their success was inevitable but in reality they could have failed for one of any number of reasons.