How IT outsourcing gets customers in wartime: positioning and marketing strategies

Dmytro Semyonov, strategist and co-founder of MarTech startup Aiter.io, in the author's column for AIN.UA outlines the current challenges IT outsourcing companies face and shares potential solutions from a marketing perspective.

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I spoke with several founders of Ukrainian outsourcing IT agencies, all of them outlined similar problems:

The number and volumes of orders are falling. The market has fallen in general, venture funds are reluctant to invest in new projects, AI has made development cheaper (especially for lower-level work, in the format of website development). Although the data indicates that overall the market will resume growth, which is not so bad.

Clients are reluctant to order from Ukrainian teams because of the risks of war, security or mobilization of workers.

There are no simple solutions in this situation, it is complex. Undoubtedly, we have to be more competitive than others and stand out with our approaches to marketing. He compiled his experience in developing marketing strategies for IT outsourcing companies. Perhaps it will help someone or prompt them to change their course.

Positioning is the foundation

Is your company different from others? Who is it for? Often the positioning is blurred "best software development studio", and therefore the company is simply "one of".

Let's consider what types of positioning are available for IT companies and which are effective under current conditions:

1. Customer type. Startup, SME, Enterprise, Government. Not bad, but not enough. Conditionally, if the company chose exclusively enterprise, then it competes not with the entire market, but with a quarter of it. That is, it is still too large a segment.
2. A characteristic or emphasis on a particular process. For example, a company is strong in transparent processes, speed of development or focus on data security, and builds its communication around this characteristic. This is a good positioning strategy that opens many avenues for communication. The only thing is that it is costly in terms of time and resources.

   First, content creation usually requires the involvement of a larger number of C-level employees. Secondly, the promotion of this brand message and its "rooting" in the heads of the audience will also take more time.

3. Technology. A company that specializes in development exclusively on Node.js or high-load APIs, for example. This is a rather narrow specialization, suitable for small teams. A risk is a change in technology, which leads to a change in positioning. Disadvantage — SEO, SMO and SOO are cut out of the target audiences (except those with a technical background). Most of the company's audience is service stations and technicians in corporations.
4. Price. Positioning on price is almost always a bad idea for B2B companies.
5. Cycle size. You can often see the positioning that "we are full-cycle development". It does not stand out in the market, because there are many such companies. Concentration at a certain stage of development (MVP, Scaling) also works poorly. Therefore, it is better not to go here either.

6. Job to be done (JTBD) — positioning through specialization in a certain task. For example, the company exclusively rewrites software in large workloads, transfers it to the cloud, conducts audits, optimizes software. This is good positioning for small teams — if the customer sees the focus on the task they need, it increases the likelihood of conversion. Also, this positioning gives an advantage in PRC companies and SEO optimization of the site.
7. Industry. The company specializes in one/several specific industries. For example, EdTech. From experience, this works best. Why:

• The team acquires a narrow expertise that is difficult to find elsewhere.
• Over time, a large number of tasks can be automated/templated due to their repetitive nature. For the same reasons, there is a lot of room for optimization of business processes and costs.
• It's much easier to create content that converts. It is not limited to the technical component, but speaks more about the industry. Finding specialists to create such content is easier.
• When looking for developers, clients first look at case studies in their industry. Specialization in a specific direction, like a large number of projects, convinces more.
• An ecosystem of partners who also specialize in this industry is being built quite organically: accountants, lawyers, consultants, lobbyists, etc. This provides both an additional and very high-quality channel for obtaining clients, as well as additional income from referrals.
• Development of their products. I consider this one of the biggest advantages. After many cases and gaining expertise, teams often come up with ideas for their own products in the industry. In this way, you can implement the "barbell" strategy according to Nasim Taleb, when there is a low-risk and low-profit activity (outsourcing) and high-risk and high-profit projects (products). The creation of products and increases one's own prestige in the industry, and provides an opportunity to diversify income. One of the best examples on the Ukrainian market, albeit from the field of marketing, is Netpeak Group.

  In general, it would be very cool if the entire Ukrainian market specialized in certain industries: it would give cumulative value to all Ukrainian companies in the international IT arena. I think we have good potential in AgroTech, Fintech and Miltech. There is still a desire for us to be a strong EdTech player. If someone from IT companies wants to move and specialize in that domain, I can help.

8. Development of certain products. This is an even narrower specialization — the development of specific solutions within a certain industry. For example, only CRM, payment systems, LMS. Great for small teams. The advantage is that it is easier to get speaking engagements at niche conferences. As the team grows, you can position yourself across the entire industry.

   In general, derivation of positioning always has a large part of individuality. After all, it is necessary to take into account the wishes and strengths of the founders and the team. A combination of two positioning strategies is also often effective, but their implementation takes more time.

Personal brands

The more we enter the age of AI and ad fatigue, the better live human faces and personalities work.

It is better to choose a few people from the company who will be brand ambassadors and pump up their visibility through maintaining a personal LinkedIn (interesting, not "I'm excited to announce"). Here you can follow the 80/20 rule — 80% professional publications, 20% personal, to show your humanity. Expert articles in relevant media, speeches at events, and ideally your own YouTube channel work great.

Regarding personal brands, there are two interesting points. One - people are often ashamed of their English/Spanish etc. The world belongs to the brats here - most people don't care about the accent as long as they understand you. Many founders/CEOs of tech companies have a strong accent, but that doesn't stop them from getting their point across, and their YouTube videos get millions of views.

The second is that companies are paranoid that they will invest in the personal brands of employees, and they will go to competitors. If there is such a fear, then there are problems with personnel policy and remuneration, they need to be solved. And, conditionally, even in a year of work of a personal brand, he will pay off his investment, this reduces the risks. Well, first of all, it is worth "pumping up" the personal brands of the co-founders.

Personal contacts

In this industry, networking is key. Attending trade shows and industry events works if there are good salespeople. If there are women in the sales department, they can go to relevant events for contacts abroad. Another option is to hire field salespeople on a project basis, for specific events. However, this requires a very good infrastructure to onboard sales managers in a short period of time. It also works well to build informal relationships with people with similar interests in the industry, which can be found in LinkedIn groups and Reddit.

Close involvement of founders in sales

This item was written by my colleague Danylo Golota, CMO at Fintellect startup.

In the service business, there is a stage when the company hires lead generators, SDRs and generally scales its funnel of receiving and closing leads. This makes sense when the company is actively growing. When a company is struggling for survival or growing on a small scale, the founder who deals with sales is the mast. When the founder (or one of the partners) does not sell, then the control over the incoming money into the company rests with the employees. Let them be professional, highly bonused and motivated, but no one can be more motivated than the founder.

On the other hand, the client often wants to speak with someone who: a) makes the final decisions. b) has carte blanche to talk about money. c) competent in what the company can and cannot do. d) is at his level of understanding and hierarchy.

Therefore, in a situation of war and crisis, it is important not to give away control over key processes. And sales is such a process, because an empty funnel is the reason why companies shrink and go bankrupt. So when it's controlled by a founder who can sell, make decisions and close customers, the company has a much better chance of survival than when the founder just waits for someone to bring him leads.

Reviews

Customer reviews on Clutch and Goodfirms are very important for getting new customers. And the further use of feedback in retargeting, promotional materials and articles is a very effective channel of persuading interested potential customers. For example, when I worked for a fintech company in London and they needed contractors, they looked for them through Clutch.

Specialized content

Do not write general articles in the format "10 mistakes startups make in development" or "What is software development outsourcing". It's boring and uncompetitive. Take narrow questions like "10 most common LMS development bugs", "How to integrate your payment solution with banks in Brazil", etc. By covering a more narrow and targeted need, you increase your value for the client and stand out by solving a question that is relevant to him.

Expansion of the sphere of influence

Increasing demand is not just for development, but for the generation of value for the end customer. The implication is that a client can develop a project that few actually need, and you can shine a light on how to make a truly valuable product.

Therefore, for example, it is better to have not only project managers, but also product managers who will be able to increase the value for the end user through the study of the audience and competitors. Another option is the partner ecosystem mentioned earlier.

By collaborating with UX, marketing and consulting agencies, you can provide more service and value to the client, increasing both your value to them and your overall price tag.

Modernization, taking into account changes due to AI/AI

"Intellect" transforms development by automating many routine tasks, code analysis, and documentation creation. Accordingly, companies can significantly cut operating costs and become more competitive through the use of AI tools.

It is equally important to increase your expertise and train employees in the field of AI to remain competitive. It is also worth paying more attention to high-value services that are difficult for AI to cover. For example, designing the architecture of systems and products.

Strategic partnerships and ecosystems

Corporations are increasingly preferring to outsource work not to individual contractors, but to ecosystems of partner companies that cover needs comprehensively (Ecosystem Based Outsourcing). This involves working with many specialist service providers and partners to create a network of expertise. Companies can use the specific skills and capabilities of different partners to address different aspects of their operations, resulting in more flexible and customized solutions.

Accordingly, it is worth forming strategic partnerships with complementary businesses (marketing and recruiting agencies, consulting) in order to increase the number of lead generation channels and to form your ecosystem for providing services. Companies trust recommendations, so if one of your partners already works with foreign clients, their words can be the beginning of a client's cooperation with you. And the more integrated Ukrainian businesses will be among themselves, the more they will be able to cross-recommend the services of partners to their clients. This is one of the ways to promote the business brand of Ukraine. It is also worth building relationships with Ukrainians abroad who work in companies you are interested in (there are many of them now) — they can become your entry point into the company.

Creating products or partnering with product companies

This is a good way to diversify the company's income and risks. After years in the market, you definitely have developed expertise and may have developed ideas for your products. Perhaps their implementation can become an additional source of income for you or a pivot for the company. More than one food company appeared in this way.

Or you can partner with existing product companies/startups, offering development for the company's share. It is often a win-win for both parties. I think that our quantity in outsourcing will turn into quality in terms of cool Ukrainian products. The more our products are known and used in the world, the stronger Ukraine is.

Engineering as marketing

One of the most effective channels, and you need to do what you love anyway. Develop microproducts that provide value to your customers and generate traffic and leads. An example is Hubspot Grader, which analyzes the SEO performance of a person's site after they leave their email. Think about what audience questions you can solve with similar tools — they can generate leads and customers for you.

In addition to finding new customers, increase the LTV of current customers

This experience was shared by the founder of the IT agency GoodFace, Max Yakubovych:

Retaining an old client is 7 times cheaper than attracting a new one. This should be taken into account when building a strategy of interaction with customers.

Create a comfortable environment for collaboration. This is not about blind adaptation to the client. Rather, it is about being able to be flexible, helping the client with solving problems, sometimes even if it is not related to your service. You can attract other contractors, share contacts or make a more convenient payment calendar. At the same time, you should not sacrifice your main processes, which should also be focused on the convenience of the client.

By combining unique positioning and more targeted marketing approaches, Ukrainian IT companies have a better chance of getting customers, despite the difficult situation of war. I believe that the IT industry is the future of our economy. I hope these recommendations will help your company become stronger.

ps The column is not the ultimate truth, because each company is unique and needs its own approach. This is probably an invitation to dialogue. I'd be happy to read any comments or approaches I missed.

Read also on Newsky "Czech Prime Minister on ammunition for Ukraine: 500 shells will be delivered by the end of the year" and look at "Boring Pence" YouTube channels.

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