Orbcomm faced the challenge of winning customers that hadn't heard of satellite
tracking and monitoring services when the company had just two orbiting
satellites. Being first to market can have advantages, but as Orbcomm learned,
it takes a pioneer's spirit. The company blazed the trail for satellite
services that will soon be offered by the likes of Iridium, Globalstar and
Teledesic, and in the process learned some valuable lessons about selling.
Keeping an eye on orbiting satellite networks, CommunicationsNOW Senior Editor
Roberta Woods, takes you inside Orbcomm to learn how they market their
services.
The opinions expressed here are those of the author and not necessarily those
of WirelessNOW. The authors and WirelessNOW encourage your feedback and seek
opposing views. If you would like to respond to this column, please send
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WINNING CUSTOMERS BY CREATING DEMAND
By Roberta Woods
Orbcomm faced the challenge of winning customers that hadn't heard of satellite
tracking and monitoring services when the company had just two orbiting
satellites. Being first to market can have advantages, but as Orbcomm learned,
it takes a pioneer's spirit. The company blazed the trail for satellite
services that will soon be offered by the likes of Iridium, Globalstar and
Teledesic, and in the process learned some valuable lessons about selling.
Orbcomm, so far the only satellite service with paying customers, has some
lessons to teach companies that hope to market a service that appears to have
no demand. "We have learned to be a solutions company because there is no
inherent demand for our service. What that means is showing companies how our
service will give them communications payback for their investment in wireless
connectivity," said Orbcomm President and CEO Alan L. Parker.
The company's "Little LEO" services are the orbiting equivalent of paging
networks on Earth. Orbcomm's "show me" customers include the Virginia
Department of Transportation, Union Pacific Railroad, as well as other
railroads, trucking companies and fleets. For such companies, Orbcomm provides
tracking and monitoring services, which is a critical market for the company.
Parker said, "Our basic, highest priority markets are vertical. For many of our
customers, it is the first time remote assets have been linked to corporate
assets."
MINING VERTICAL MARKETS
Orbcomm sees a market in the trucking industry where Qualcomm's OmniTRACS has
made a mark with its OmniTRACS system. "OmniTRACS is not an initial
competitor," Parker said. "Their service is targeted at full truck loads which
represent about 10% of the trucking market. We [Orbcomm] are looking at the
remainder of the market, including private trucking operators to sell our
service." Here Parker feels is an opportunity for the company. While OmniTRACS
units cost between $3,000 and $5,000 each, Orbcomm can supply its unit for
about $500, a significant difference.
Yet to win customers, Orbcomm discovered it had to learn how to sell its
service. "We are an applications business," Parker said. "We are always
targeted at the solution." Orbcomm studies a particular company's business and
comes up with an application that offers a solution, unlike traditional
cellular and paging companies that sell air time for purposes determined by the
user.
Yet Orbcomm has a two-fold marketing strategy. The second aspect of its
strategy focuses on what Parker calls a "diagonal" rather than horizontal
market. Essentially Orbcomm is looking at a niche of a horizontal market.
Parker explained, "From a user's standpoint, handheld 2-way email that
incorporates global positioning system (GPS) is of interest to certain buyer
groups. Hikers, boaters, recreational vehicle owners, cross-country skiers,
campers and others that participate in activities that take them to remote
locations have a personal need to call for help or other conveniences, such as
just informing their family of their status, Orbcomm offers 2-way messaging
anywhere on Earth."
Under its plan, Orbcomm could also offer its services as an add-on to existing
paging services. Users would purchase the service through their paging
provider. The service would shift to satellite control when out of range of the
terrestrial paging network. Parker says hybrid systems that combine tower-based
systems like Skytel's 2-way paging and Orbcomm's systems are a natural
complement.
To support the enhanced paging service, new handheld units are in the final
stages of development. The units will be available in the second half of 1998
from Magellan Systems, a subsidiary of Orbital Sciences, one of Orbcomm's three
owners. The unit will have a full function global positioning system (GPS), a
screen, an alphanumeric keyboard. Parker says ocean-going sailors will be the
early adopters and the unit will sell for $1,499. The price of the unit will
come down, Parker said, and will be sold for $700 ultimately.
Continuing to cultivate a market Parker calls "diagonal" rather than
horizontal, the company plans to offer an affordable system for the consumer
market for roadside reporting. The system would be sold through the automotive
after market initially, but is aimed at the low-end of the automotive market
focusing on owners of such cars as Escorts, Taurus, Corollas and Cavaliers.
Such a system will cost between $150 and $200 with service priced at $80 to
$100 a year.
On either front, the company will position its service as a low-cost
communications option worldwide. Internationally, Orbcomm has 13 marketing
licensees covering 97 countries in the Western Hemisphere and 40 countries in
Europe, including Turkey, Japan, Korea, Thailand and the Philippines.
The company is well on its way to offering its services with 10 satellites in
its planned 28-satellite constellation already in orbit and functioning.
Orbcomm plans to launch an additional 18 satellites in the first half of this
year.
January 1998
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Roberta Woods is a CommunicationsNOW senior editor who with responsibility for
the content of WirelessNOW. She also contributes to Inside Paging and Inside
Internet@Wireless. To contact her by e-mail, send your comments to
editor@commnow.com. In addition you can phone her at 603-225-3689 or fax
603-225-7159.
Copyright 1998 by original source and CommunicationsNOW
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