We have talked to hundreds of Outsourcing / Engineering Services companies over the years that want to enter the DACH market. When searching for Unique Selling Points, we are always shocked by how surprised they are to find out that much of what they think in unique to their company is actually the opposite of unique. These commonly claimed USPs are actually in at least 90+% of all engineering services companies attempting to enter the DACH market.
Unique Selling Points (USPs) That Actually Aren’t
- We have special expertise in Banking, Telecom, and/or Government. These are the three biggest domestic buyers of tech in nearly all markets offering engineering services and all these companies buy locally from their local tech companies. Who did not work for a Deutsche Telekom branch or a Raiffeisen branch?
- We have exceptional engineering processes. Enterprises and product companies (the companies you want to sell to) need to be great at sales and marketing and just good at engineering. Engineering service companies must be great at engineering and engineering processes. Compared to their client, most outsourcing companies have stronger processes and QA. Compared to their competitors, not so much.
- We deliver a very premium service and only charge slightly higher prices than the cheap guys. Anytime you replace an engineering services supplier, you might be fooled into thinking that the outgoing services company represents the ‘norm’ especially as your new customer explains how great you are compared to the other. Don’t be fooled, even that outgoing supplier has a new customer somewhere else that is saying the sweet words to them.
- Our recruiting process is very comprehensive and selective. We only hire the best. Outsourcing companies live and die by recruiting. They also have high volume– that means there must be a process.
- We deliver according an agile/iterative development model (Scrum or Kanban). 15 years ago, this might have been unique, but not today. It is the norm. Clients who are not advanced (eg. Banking, Government, Telecom…) see you as advanced: but don’t be fooled, all your competitors have this as well.
- We can work in various/flexible engagement models. Nearly all suppliers will sell staff augmentation, team extension, and project work– they may call it different, but only models like build-operate-transfer (BOT) or revenue/risk share would actually be unique.
- We aim for long term relationships with our clients. The only real way to make money in this industry is to spread out the costs of customer acquisition + onboarding/ramp across as large a team and as long a duration as possible. Even web-agencies which tend to do large numbers of small projects tend to think of clients as long term engagements.
- We can develop complete products – UX, DevOps, front end, team leader, testing…. Everyone does this now. UX is occasional left out and business analysts might be unique but for the rest it would be unusual not to have any of these. If you want to earn margins beyond a recruiting agency, you need to deliver the full team.
- We do workshops to define the detailed requirements together. Everyone knows that customers can’t write good specifications and even trying means project start delays. Non-billable (waiting) time is a profitability killer. Everyone now tries to shape the specifications and get them out fast by doing workshops– paid or free.
- Our engineers can travel to Germany for meetings. Any supplier within the EU can do this and most from outside the EU as well. The biggest thing is can you get them to move on site for a longer period of time or can they speak good German– that would be unique.
- Labor costs here are lower than in Germany. UK, US, and Germany are the 3 large markets with above average labor costs. As a result EVERY engineering services company in the world is either selling to these markets, tried to sell previously, or is planning to sell to these markets and everyone has a lower cost base than their prospective customer.
The good news is that if you have something in addition to these 11 Non-USPs, you likely have a very good one that brings you among the top 10% differentiators. If not, here’s some Not-So-Obvious Differentiators For SW Development Companies for you to brainstorm.
If you can’t identify good differentiators on your core offer then you need to create an entry point offer (EPO) that differs and attracts new clients. Read more about Entry Point Offers here.