Selling New Technology to the Old School

Marketing new technology to old industries can be an arduous task – no matter the value of the product.

As a lot of entrepreneurs can attest, bringing an innovative new product to market doesn’t guarantee success. No matter how valuable the product, you’ve still got to sell it, and often that means convincing customers to change some old habits. That means knowing the target industry inside out and proving that changing is better than continuing in familiar ways.


 

The Problem

In 2008 Vancouver-based Subserveo Inc. launched software aimed at modernizing compliance and surveillance functions in the financial-services industry. Compliance is the legal term for monitoring adherence to the myriad demands of regulatory authorities such as the Securities and Exchange Commission in the U.S. or the provincial agencies in Canada. Penalties for non-compliance can be severe and expensive. Astonishingly, however, most companies in the industry still use paper-based systems and assign people to review all transactions for adherence to the rules. Subserveo created software to automate compliance monitoring but needed to convince inhabitants of this very traditional industry to change long-familiar methodology.

 

The Solution


Subserveo concluded the best way to educate potential clients was to develop a compelling value proposition. It discovered that the number of compliance failures was escalating throughout North America and fines levied by securities regulators were also increasing in size. Its product, which is delivered as on-demand software, promises more robust compliance (and thus less chance of infractions and resulting fines) for a lower price than traditional compliance methods. 


The company first beefed up its team to include experts with intimate knowledge of the financial-services industry. Co-founders Mike Hagerman, a veteran industry manager and experienced investor, and Shannon Susko, who has 20 years’ experience building technology platforms and companies for the financial-services industry, brought in Martin Orbach, a seasoned compliance expert, who has similar management experience in financial-services industries around the world. 


With the initial team in place, the company began some targeted networking to deliver its proposition. At first the industry may have been in the mood to listen to Subserveo’s value proposition, but it wasn’t ready to change its ways. However, the team continued to use old-school marketing methods such as cold-calling, presentations and general banging on doors to create leads. When the bank-led economic crash ushered in the recession in late 2008, closer monitoring of financial-services companies followed and Subserveo’s message began to resonate. 


Today the company has a staff of 15 as well as salespeople in New York and Baltimore. Its solution has captured a significant percentage of the Canadian brokerage market and has made strong inroads into New York, the world’s financial-services capital. Last April it was named one of the top 25 Canadian information and communication technology “up and comers” by the technology-industry monitoring firm Branham Group Inc. 

 

Lessons


• Understand your market intimately. Knowing your prospective customers’ problems helps hone your messaging for sales calls.


• Form a solid value proposition. Even a complex industry requires a clear, understandable and proven benefits statement. 


• Get the right riders on the bus. A startup team needs to know the industry it serves. It also has to be rigorous about advancing its business plan.