The SaaS market has proven to be one of the most resilient to economic shocks during the pandemic. Various variations of cloud solutions “shoot” in a crisis and bring dividends to their investors.
Therefore, the guest of this interview was a person who is well versed in bringing software as a service to the market – Vyacheslav Sotnik, director of marketing and PR of the EDIN IT company, founder of the MarketingGen marketing agency. Using the modern electronic document management system EDIN as an example, we talked about how to promote SaaS in Ukraine, what strategy and channels to use, how to allocate the budget, as well as what are the prospects for EDI in Ukraine, and whether quarantine should be feared.
Vyacheslav, hello! Previously, we collaborated with you as the Marketing Director of HH.ua. How did it happen that now you are promoting the electronic document management service in Ukraine?
Hey! In fact, the situation is a little different, since the start of quarantine, I decided to open my own marketing agency – marketing. In the past, I was connected with EDIN by the overall launch of this brand in the Ukrainian market and marketing management at the launch stage. An organic continuation of the work was his transfer to the status of a key client of the agency. In fact, marketing support is implemented for this client at the stage of developing a strategy, integrating it into business processes, and, of course, support in lead gene and PR. That is, it is a complex client and comprehensive support.
I have been familiar with the sphere of e-document management or, if you like, the service for transferring electronic data for 6 years (since 2014), when I first came to the role of CMO in E-COM. It was there that I learned the meaning of such abbreviations that even Google did not really understand. For Example, EDI (electronic data interchange), EDO (e-document management), YUZD (legally significant document management), and EDS (electronic digital signature). At that moment in Ukraine, such key queries online were driven by a maximum of three companies in the context of EDI’s narrow specialization. As a funny thing at the time, it’s probably worth noting that Google, when trying to type EDI into the search bar, always intended to suggest FOOD instead of EDI. Therefore, I am well versed in the essence of the issue.
Tell us more about the EDIN project itself, and its advantages for business?
The essence of e-document flow is to give customers a competitive advantage, accelerate the turnover of funds, and open up new business opportunities. In the realities of, say, large retail (retail chains + suppliers + distributors), where there is a supply of products from the customer to the recipient, this is a mandatory requirement. That is, earlier, when ordering products for the network, you had to call, send a fax, and correspond by e-mail. mail, and then wait for paper documents with a seal and, God forbid, at the time of arrival of the goods you have errors in the documents … Now, this is all fully implemented electronically on a web service or integrated into the user’s accounting system (Oracle, SAP, MS Dynamics, etc.).
In short, from the introduction of EDI and SWD, any business:
- Automates business processes up to 70%;
- Accelerates the speed of making deals by 2-3 times;
- Reduces human factor errors in the enterprise by up to 80%;
- Indirectly reduces the terms of receivables;
- Cashflow speeds up.
The list of benefits can be continued indefinitely, but I would rather cite international statistics as evidence. So, in companies with a staff of 500 or more people, due to inefficient processes associated with doing business on paper, there are annual losses of up to $ 5.7 million. If the company continues to do business on paper, then about 6% of the profit goes to maintenance, This is just about the economic effect.
What are the prospects for EDI as a niche in Ukraine?
As for the prospects, it is worth noting the fact that 99% of all documents in the office are created electronically, after which they are printed, scanned, endorsed, and exchanged with counterparties. Only this fact, without global statistics, suggests that this is the future of Ukraine for the next 10 years, with a constant growth trend. I can give another example: if 6 years ago about 3 main players competed in the category of EDI providers, now this number is approaching 7, and these are only the most prominent market participants. I’m not talking about providers of e-reporting and e-document management in general, including electronic legally significant documents. Here the numbers have long gone beyond the mark of 10+ players and new players appear several times a year.
To what extent is the Ukrainian e-data exchange market inferior to the West? What factors contribute to companies moving to electronic document management?
It concedes in some moments so significantly that it doesn’t even make sense to translate it into some numbers. But some solutions and “chips” created by the guys from EDIN go far beyond the borders of Ukraine in terms of novelty for Europe and the West. There are a number of solutions in which we have moved much further. At the same time, in Europe, there is a normal EDS standard (CEP), which is valid in any country, but in our country, they are only approaching the fact that our EDS can be read in other countries. Now our electronic keys for signing e-documents are rather an internal document within the country, while in Europe it can work in or out. Well, a lot of things related to government regulation inside.
Is there support for electronic document management at the state level? How does this manifest itself and why is it important?
Support and development, of course, are. In general, the trend towards the digital transformation of government bodies continues now, where the state seeks to make interaction with business and citizens as simple and transparent as possible. These are services for the population “Diya”, and legislative changes.
For example, not so long ago, new transportation rules came into force, which recognized the consignment note in electronic form. This opened up a lot of opportunities for both business and EDI providers. Another conversation is that the state apparatus is often not as flexible as business, and all innovations are sometimes broken down into laws or realities of implementation (when there is a solution, but there is no conditional material and technical base for implementation).
Are there tenders in the field of E-document management? How is the participation process going?
There is no separate story that all projects go to tender and the best ones are selected there. I will say, even more, that not all of the providers on the market are physically and technically able to participate in these tenders. There are certain requirements for security, the manufacturability of the platform itself, and the adaptation of business processes. Many offer only boxed solutions, so at the technology level, they cannot take part in tenders.
For participation, there are internal procedures for agreeing on the selection of contractors or counterparties on the client-side. The more structured and systematized the client is, the more complex his business processes, and the more stringent the registration procedure.
By the way, online tenders are a product of EDIN-TENDER, which is also independently developed under the EDIN umbrella.
Are there up-to-date statistics on the dynamics of the electronic document management market? How has the market size changed compared to previous years?
I would comment in general:
- The EDI market is changing. Hybrid products are emerging that no longer just cover the pain of exchanging business e-documents between partners quickly and correctly. Now it is rather a tool that integrates deeper into the client’s business, becomes a part of it, is finalized custom for the client, and opens up new opportunities;
- Based on this order of things, next year I see 2 times more such hybrid products among providers. I personally know that EDIN is preparing a number of cool launches this year and scaling them up next;
- In general, if we take Eastern Europe, where there is Ukraine, then the market of the so-called. e-invoicing currently accounts for about 3% of penetration. The niche is essentially at the start of its development. It is also important to understand that in Europe e-invoicing includes both an invoice, an invoice, and an act within 1 e-document, but for us, it all works separately.
I answered earlier about the changes from last year, but the main point is that in Ukraine there is no association or community that would conduct annual ratings or rankings of companies according to various indicators. Therefore, everyone can say that he is No. 1. Three indicators remain a common measure: the client base, the depth of penetration into the client’s business processes, and the position in a narrow niche.
Now let’s move on to the actual promotion. How was the EDIN marketing strategy developed? What did they bet on and did they play? What were the difficulties?
This market has its own rules and peculiarities. Firstly, you are appreciated for your technical support and the ability to close all technical issues right here in Ukraine, as is the case with EDIN. And there are representatives in our market who have technical support and development abroad with all the consequences.
Regarding the marketing strategy, it is created and edited at the end of the financial year. The approach to strategy development is classical. In a nutshell, the process consists of the following steps:
- Identify business goals with the owner/TOP team;
- Build marketing goals to solve business problems;
- You generate marketing activity for each of the projects that solve a marketing goal, which in turn solves certain business goals.
The main emphasis was placed on:
- Leadership in innovations and custom solutions that competitors cannot reproduce, with subsequent reporting through offline and online channels;
- Practical cases and formation of brand advocates;
- Dominance in search results for competitive and niche queries;
- Work with opinion leaders and exchange experience at offline events (here quarantine has made its own adjustments);
- Launch and testing of new online channels to test hypotheses and prepare for the WOW start this year.
The difficulties were mostly related to quarantine restrictions. Among them:
- “Disabling” the offline channel, personal meetings with clients;
- Traffic migration and search for new working channels;
- Changes in seasonality and types of documents.
What strategies are used by competing companies? Why did EDIN go the other way?
Competitor analysis is a monthly activity. For this task, the marketing department and the product development department are used.
Everyone’s market strategy is different. One of the competitors decided to dump or give away their service for free in order to attract a new audience to their product. My opinion is that this is a short-sighted strategy if you do not plan to keep the investment over the next 3-5 years. Well, in general, when you give something to a client for free or cheap, you kill the value of the product. Service and quality cannot be “on par” and at the same time the cheapest on the market.
It’s like Porter’s strategy when you “drown” (meaning “sick”, “very supportive” – ed.) for the “cost leadership” strategy. If for the production it will work somewhere, then in the SaaS market, the user is not ready to buy a “so-so” product at a cheap price. As a result, it hits the pocket more than saved.
Therefore, EDIN always keeps the level and prefers to give more value, opportunities, and individual solutions than to sell at the lowest price. Everyone has their own strategy, and its effectiveness is measured at the end of the year by achievements, income, and profit.
What audience is the product aimed at? How did you segment it and search for it on the Internet? What customer “pains” did you end up focusing on?
The main target audience of the product is enterprise and smb clients. If we talk about the collective images of customers, then they are conditionally divided into:
- CEO, GM, Owner;
- TOP management (CIO, CFO, СOO, CLO);
- Heads of direction for the implementation of e-services in the business of clients, etc.
Pain for everyone. For some, this is an opportunity to grow a business without increasing staff, for others, it is a reduction in fixed costs for handouts or acceleration of cash flow. We dig very deeply into the business processes of our clients and find solutions at the intersection of our technologies and business vision.
We are very interested in your approach to pain management for each type of client. Surely, this requires certain customization of the product under the category?
Objectively, the market for mass consumption of E-document management services with a conscious decision continues to grow and develop. This is not a formed acute demand. We have to meet the same objections that were 6-10 years ago. For example, a medium-sized business often does not understand why to pay for it, because everything works anyway. And if it is large, then the element of paper remains there in such processes that the enterprise can really still exist in paper form.
However, we do not customize the product separately for each audience. EDIN is essentially an umbrella brand, where each of the products is already a custom solution. For example, EDIN-TENDER is responsible for working with tenders and options, and EDIN-PRICE is responsible for price negotiation. The user himself can choose the services that he needs.
In copywriting and storytelling creatives, we choose the communication format that matches the product and, conversely, we choose the product according to its promotion channel.
What internet marketing tools did you use to promote the product? Which ones do you still use and which ones have you abandoned and why?
We use and continue to use:
- Contextual and media advertising;
- Search engine optimization;
- Selective launches of promo on social. networks (Facebook, youtube);
- Direct advertising;
- Email marketing.
They didn’t refuse anything. On the contrary, starting from the new year, we are launching an updated strategy for SEO and individual lead generation channels, creating webinar platforms, and planning to launch automatic sales tunnels.
Are there any trends for advertising in SaaS?
We don’t use “SaaS” as a keyword for promotion at all. This is a fairly broad concept, so it is unlikely that you will be able to find customers using it. You need to clearly understand the keys, which are very segmented for the target audience. In our case, these are low-frequency or mid-frequency requests. We do not conditionally spend a million on advertising in order to be at the top and compete for positions in the search results.
For SEO, we make articles and long reads in which we talk about the value of the product, and give successful cases. This is both PR with the client and an entry point for a potential client.
Recently, we have also started to work more actively with webinars. Previously, they were educational in nature, but now they have replaced offline events. Here, the process is similar to SEO: we start a client page with interesting content and then send it along the chain from useful to private. We do not sell directly. We also always ask you to give feedback and answer questions, so that we can process these requests later.
What type of promotion in this niche is the most costly, and which is less?
More than half of our advertising budgets have always been devoted to paid advertising. It is still the main source of customers. But this year we are changing the strategy a little and strengthening SEO. One of the tasks is to bring this aspect to a new level of traffic consumption together with customers. This will play a big role in promotion, about 30-40%. And the rest we will invest in video content, which will be a mix of success stories and brand advocates.
In fact, we are creating new tunnels this year, which we will use on the one hand to warm up a potential client, and on the other hand, this is due to the fact that the chain from acquaintance with a product to purchase can take a week, a month or more, and the integration process itself up to six months or more.
Almost all business in Ukraine has divided itself into “before” and “after” quarantine. How did almost four months of offline downtime affect you? What exactly has changed? What problems arose and how did you solve them or continue to solve them?
Everything is classic! We switched to google meets, implemented daily reporting and mastered working remotely. In our segment, where you occupy one of the leading positions as a service on the platform of which the entire process of sending and receiving products in retail takes place, we have rather grown together with our customers.
In general, EDIN has a vaccine against coronavirus – we have a digital product itself, which was in an online format before, and with the coronovirus its demand has only increased.
In this case, I want to ask about optimizing advertising budgets. Did you manage to do it and how effectively?
We have optimized budgets for offline events and moved some of them online. We did not cut other budgets for online promotion.
What’s the boldest marketing decision you’ve made in the last few months?
I can’t voice it yet, but very big changes are coming very soon, which will definitely not go unnoticed by competitors and the market as a whole. I’ll keep a little intrigue
How do you feel about collaborations as a new form of marketing activity? How applicable is this for SaaS? If so, what format options are possible?
“Collaba” is often more plus than a minus. In our work with the EDIN brand, this is reflected in cooperation with well-known clients, the formation of success stories with international names, and the “packaging” of this into the company’s PR strategy. Storytelling + success stories is an excellent combination for this product, for knowledge generation, and objection handling.
In a separate line, you can build collaborations with related services. For example, with certificate authorities of keys. If you have an E-document management service, then you definitely need the EDS/CEP key for the client. This need gives rise to various partnerships.
What should be Internet marketing for SaaS businesses in quarantine conditions? Aggressive or calm, aimed at specific “pain points” or complex?
It must be strategic. If an aggressive strategy was laid down at the stage of analysis and “search” (from the English search – search, ed.), then why not. If this is a spontaneous decision, then you don’t want to look indistinct for the market in the end. Quarantine is a strength test, a test of the strength and “fragility” of a business.
During the year, it can be aggressive for a niche market, but completely invisible to the general market. The EDI market is in most cases conservative strategy, but the task of the right manager in the field of marketing is to find niches and approaches in such a way that your product first enters the mind of the consumer.
Should I be worried that some clients of EDI services will leave the market amid a long quarantine?
Most of our clients are a large systemic business that is becoming more difficult for retail, although we are trying to actively change this now. If we take such retail giants, then none of them left. On the contrary, the share of food consumption has increased manifold. Accordingly, no one has canceled either the operation of the platform or the exchange of documents. The security check was that the clients we work with were ready for such a product and they grew their businesses even more. Perhaps small businesses sank a little, but this did not affect SaaS.
Whenever there is a crisis, they start talking about optimizing or cutting costs. Electronic document management goes hand in hand with this moment.
The service automates a huge part of the work and serves as a lifesaver for companies in a difficult economic period.