Part 2: Do your homework (Navigating the marketplace)

Hey friends, 

For years, we’ve been trying to make the smart buildings marketplace, AKA the vendor swamp, less murky. 

To consolidate all the content we’ve produced on this, we’re publishing a newsletter series (and whitepaper) on navigating the smart buildings marketplace. If you missed part 1, read that first. Today, in part 2, we’ll discuss what buyers need to know before engaging vendors.

If you’re a buyer, this series contains our best advice on how to make sense of the marketplace. If you’re a vendor, this doubles as a way to stand out from the competition by meeting buyers where they’re at.

Part 2: Do your homework

The first step in navigating the marketplace is to know where you’re at in the buying process. Or maybe, step 0 is to have a buying process in the first place! 

Based on all of our interviews with buyers (across diverse verticals, geographies, and roles), a solid buying process (whether it’s documented or not) looks something like this:

As shown on the left, the first step in any buying process is to develop a Smart Building Strategy. The strategy determines your smart buildings program's why, who, where, what, and how. Only after answering those questions does it make sense to move on to step 2: Procurement. 

As shown with the yellow highlighter, there are two stages when a buyer actually engages with the vendors in the marketplace. During Strategy development, they need to do Preliminary Market Research. And during Procurement, they need to Shortlist Vendors. It’s vital for buyers to know which stage they’re in because each stage has different goals and requires different homework. For vendors, it’s equally important to understand what stage their prospects are in. Let’s walk through both of these stages.

Preliminary Marketplace Research is essentially “kicking the tires.” In formal procurement processes, it’s done using an RFI or RFQ. If you were shopping in a retail store, you’d tell the sales associate you’re “just looking.” You’re just trying to understand what technology exists and what it’s capable of. You’re filling in gaps in your smart building strategy by answering questions like:

• Which categories exist?
• What can they do?
• How might they help our business?
• Which of our peers are using this technology already?

As a vendor, you’re trying to educate the buyer, validate your category, and show you’re a leader that should be included if and when procurement happens. Being salesy at this point is detrimental to your chances—they’re not buying yet!

Vendor Shortlisting, on the other hand, is much more advanced than Preliminary Marketplace Research—you need to do more homework to progress to that stage. If you were shopping in a retail store, this stage is analogous to taking a few items to the dressing room. You need to know your sizes, the colors you like, and, if you’re like me, which of your clothes need to be replaced because your wife says so. 

Similarly, a strategic smart buildings buyer will answer all the questions required to create a Smart Building Strategy before moving on to Procurement. Questions like:

• Which outcomes are we trying to achieve with smart building technology?
• Who will use the technology and how will it improve their workflows?
• Are my digital infrastructure layers ready? Which devices, networks, and data are available and what are the obstacles?
• Which use cases are the highest priority based on ROI?

Once you answer these questions, you’ll find that you can navigate the vendor swamp with ease—it’s like having a compass and a map and sitting in an airboat gliding on top of the murky waters.

We know this because we see it happen every day. During a recent vendor shortlisting process, we filtered the murky list of vendors from 44 to 2, just by asking two vital questions that came from interviewing the buyer on their strategy. 

Buyers… which stage are you in and what are you buying? Hit reply and let us know… we’d love to hear from you. 

Stay tuned for part 3!

—James and the Nexus Labs team