Imagine a farmer who does not plow his field. Does not fertilize it. Does not
irrigate it. Does not even plant seeds in it. Yet at the end of the growing
season, the same farmer has every expectation of reaping a harvest he did not
Or consider the hunter who lays no traps. Who uses no bait. Who
employs no weapons or tools for capturing prey. Yet despite his lack of effort,
this hunter fully expects to mount the heads of many a beast as trophies on his
Sound preposterous? Welcome to the prevailing philosophy that
guides business development efforts at many Israeli companies.
hear in glowing terms that Israel is a fountain of world-class products in
agriculture, biotechnology, computers, aviation, telecommunications and many
other fields. What we don’t hear about is that the effort to market and sell
these world-class products is grossly inferior to the level of effort that went
into creating them.
Israeli companies often pour everything they have
into breakthrough innovations but then leave little or nothing for marketing and
sales. Like the farmer who does not farm or the hunter who does not
Recently in Israel’s press, Eitan Wertheimer of Iscar Metalworking
shed some light on this phenomenon, observing that Israel’s management culture
lacks an emphasis on international sales, which prevents startup companies from
becoming large multinationals. He further pointed out that Iscar itself did not
become a big international firm until it changed its priorities “from investing
in production to investing in marketing.”
In pondering why so many
Israeli companies refrain from making a meaningful investment in marketing and
sales, it’s helpful to consider Israel’s reputation with regards to hasbara. The
importance of hasbara to national security has now been well established, but
for a long time its importance to Israel wasn’t taken
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Marketing and sales are just as critical to a company’s
economic security, but as Wertheimer points out, Israeli corporate executives
don’t take it seriously, and I humbly suggest that, like hasbara, they need
As a business-development consultant specializing in helping
companies from Israel establish or expand their operations in the US, I am
astounded at the number of Israeli companies I talk to that don’t have proper
marketing and sales programs in place to generate a level of business
commensurate with their ambitions.
Marketing and sales cannot be an
afterthought to a company’s innovation. If the innovation itself solves a
problem, then marketing is critical for targeting qualified prospects to explain
which problem it solves and how.
Selling is a continuation of that
process, explaining to individual customers how their specific problem can be
solved by deploying the company’s solution.
If the marketing and selling
functions are not endowed with a level of resources corresponding to sales
expectations, then companies shouldn’t be surprised when lofty revenue goals
fail to materialize.
Besides, what’s the point of pouring so many
resources into creating an innovation if there is nothing left over to drive its
adoption? Unfortunately, many Israeli companies have a woefully similar strategy
for addressing this dilemma – signing up third-party agents to market and sell
their products or services on a “success fee” basis (“100% commission structure”
in the US). In other words, after failing to allocate budget to properly market
and sell their solutions themselves, many Israeli companies seek to outsource
that burden to an outside party, who is then expected to do the marketing and
selling on their behalf.
In addition, regardless of how lengthy the sales
cycle is, the outside party only gets paid if they succeed! Many Israeli
companies I’ve spoken with who choose this path have not completely thought
through the ramifications of employing a success-fee strategy. The common
misconception seems to be that this is a safe “hands off” approach that leaves
the reseller with most of the risk and themselves with most of the gain. Further
analysis, however, will reveal that in fact this is not the case.
look at it from the reseller’s point of view. Why should a reseller take on the
burden of doing all the marketing and selling for the Israeli company? What if
there are other suppliers in the same market who are also looking for resellers
but bring much more value to the table? For example, assume a foreign company
that sells widgets is looking for resellers to represent them in the US, and it
will support them by doing the following:
• Analyze target markets in the US,
segment them and share this market intelligence with their resellers.
Conduct a comparative analysis of their primary competitors and highlight their
own competitive advantages so resellers will be better positioned vis-à-vis
• Produce an ongoing, sustained demand-generation
effort that funnels qualified leads to their resellers.
co-marketing funds to help finance events and other marketing campaigns their
resellers engage in.
• Assign a dedicated USbased business-development
specialist to provide firstlevel marketing support, sales training and
assistance with all marketing initiatives.
A rational reseller looking at
this from a strictly business perspective will logically conclude that the
foreign widgets manufacturer will be much more supportive of his efforts than
the Israeli company that offers nothing more than a success fee. In this
environment, guess who gets the best resellers – and more importantly the
greater market share? It should now be apparent that the success-fee strategy is
not risk-free, but in fact fraught with its own peril.
who seek to compete in and grow their share of the US market must commit to a
greater investment in their marketing and sales efforts.
In fact, some
percentage of that famous Israeli brainpower that generates so much product
innovation should be reapplied toward producing innovations in marketing and
sales. That would be a real strategy for success.
Guy Nadivi is CEO of SolutionBridge, a US-based consulting firm specializing in
helping Israeli companies establish or expand their operations in the United
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