Ralph E. Grabowski - marketingVP - fact-gathering, analytical Marketing to steer the enterprise



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Acugen Software case study

Acugen Software case study

World market dominance in 18 months with no capital and no sales force!
"You engineered my secret weapon!"

The problem and my assignments
Process, methods, and tools
M/E Ratio™, an investment in Marketing
Results and payback
A role model for startups
About Acugen Software


The problem

Acugen Software of Nashua, NH has been developing semiconductor test software for PC's and workstations.  Their software is known as Automatic Test Generation, or ATG.  It automatically creates test vector patterns for testing semiconductor chips called PALs (programmable array logic) and PLDs (programmable logic devices).  An average selling price above $10K put it firmly in the big-ticket league of capital budget goods normally entrusted to a direct field sales force.  At the same time, that price was not enough to support a field organization.


The market was controlled by a Fortune 2000 corporation, Data - I/O, selling software alongside their logic programmers and instrumentation.  Data - I/O had a direct field sales force of over fifty people.  They were the established name and a safe buy, even with product deficiencies.

New technology

With new technology, Acugen Software created a superior product and began to sell a few units.  The founder hired a salesperson.  Results were poor and sales came at the expense of a significant fraction of the entrepreneur's time and energy.  They parted and the President became the sole employee again.  While they had a steady stream of raw leads, the close rate (conversion to purchase orders) was completely inadequate.

Technical superiority alone had utterly failed to gain Acugen Software either sales or market share.


My assignments

Peter de Bruyn Kops asked me to jump-start Acugen, and simultaneously brought in operations staff to implement my ideas.

Overcome constraints

While he charged me with forging an engine of rapid growth, we faced constraints:

Capital No outside capital to fund expansion because the entrepreneur wanted to retain control.  He did not want Venture Capital.
Margin Not enough money in the product to support a sales force.
Time No time to find, train, and develop a sales force to a productive level. 

Many sales managers believe that a new salesperson, who already knows how to sell, becomes fully productive only in the third year.  After all, the new job, new company, new territory, new product, and new market require time to get up to speed.  That means that the new salesperson is relatively unproductive in the first year, just when the entrepreneur (and the investors) would like the company to take off quickly.

People No track record of successfully hiring sales talent.
Entrepreneur Less of the President's time available for sales, or for sales supervision.  He focused on Acugen Software's technology to maintain their competitive advantage.
Competition Entrenched rival with a 50-plus person direct field sales force.


Rise above inadequate traditional selling

Traditional selling's two steps have been inadequate A more pervasive problem, beyond Acugen Software, is that traditional selling has been inadequate.  Two steps have marked a conventional opening response to a raw lead:

Step 1  Mail a standard literature pack (with everything in it).

The normal weighty lit-pack frequently overwhelmed prospects so that they do not read it.   I have given this literature dump the name "thud," for the sound it makes when it hits the "to be read" pile.  It is normally never read.

That "one size fits all" package has sent the same literature to all prospects, no matter what market segment they might be in.

Step 2  Send (raw, unqualified) leads to the salesperson for follow-up.

Many sales managers believe that less than 30% of leads are followed up because raw leads are, by definition, unqualified.  Hey, why would the salesman waste his time with unqualified leads?  They typically cry, "Send me qualified leads!"


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