Helping Driving Simulation Company
Achieve Revenue Growth
I had the chance to work with Mike when both of us were working at Virage Simulation Inc. In our multiple talks we had over the years, he always had new idea to promote the company. It was easy to talk to him about the work or anythings. I would recommend him without any hesitation. I'm sure we will have the opportunity to work together again.
Consultant, Groupe Jean Coutu
CAE Inc. is a Canadian manufacturer of simulation technologies, modelling technologies and training services to airlines, aircraft manufacturers, healthcare specialists, and defence customers. They provide the most innovative full-flight simulators (FFS), improving training efficiency, offering advanced capabilities, and increasing operational efficiency. These innovations are essential for CAE to maintain its 70% market share of flight simulator market in an aggressively competitive market.
The driving simulation company sought to bring similar innovations to the driving world for helping train motor vehicle equipment drivers. The six founders of the driving simulation start-up company were former CAE engineers. Their business plan’s stated that their initial and main target market was the student-driver training market in North America. This target market was likely determined based on the fact that motor vehicle accidents are in the top ten causes of death in the world, in particular in the United States. The singular biggest demographic causing these accidents are young drivers or age group between 15 and 20 years old.
Though the young driver market is large or $1B simply considering its client demographic or young drivers. The profile of this sector is however dependent on demand for its services largely determined by disposable income levels. More importantly perhaps is a large number of independent and small operations. For example, this industry has no major players with a market share of greater than 5%. Bottom line they will likely buy a used car at $5,000 to support their driver training services rather than $150,000 for driving simulator.
The client was impressed with my strengths in selling them alternative innovative technologies used in their product. They hired me because of my sales expertise specifically for selling innovative solutions.
Initial Target Market
The first three months focused on exploring the young driver training school market in the local region, as stated in driving simulator start-up business plan. In a nutshell, we researched and compiled a calling list of all the driving schools in the region. Subsequently proceeded to call out and prospect to these young driver training schools as the best approach to uncover demand given most of these client operations still used fax and phone primarily rather than email. Reached out to just over 600 young driver training schools to determine: one third had no interest in purchasing as they were planning for retirement. Another third simply had no interest in innovating their enterprise. While the last third were clearly passionate driver trainers open to innovating their enterprise but without the funds to purchase. Even a creative purchasing business plan that we built for them failed to sway their bankers.
New Market Research
Therefore the following month our next step was to go back to square one and open up a new market research project. We research two perspective: one who currently buy driving simulators? And two, who had a problem that our simulator solution answers? Our next challenge was educating the market about the value of professional driver training similar to professional pilot training.
The largest buying segment for driving simulators was research customers, at 66 percent share. Next was professional driver training (in contrast to young driver training), at 23 percent. Finally, the last buyer segment was entertainment at 11 percent. The professional driver training segment was divided by military training and commercial training both of which had an incumbent competitor leading the way.
The founders of the driving simulation start-up may be able to address a certain cross section of the research market. They had no interest in meeting the needs of the entertainment sector. They were not able to meet the needs for military training customers, which left us with determining how to target commercial training, or largely the truck transportation sector.
Not surprisingly the profile of many truck driver training schools mirrored our experience with those in the young driver training schools market. Effectively a few, usually the larger ones were open to innovating their operations. There were enough of them to target across North America within an annual plan. While there was another target within the commercial training sector which were the transport companies themselves of which they are 1.2 million. Effectively 90% of these companies operate less than six trucks. Again there was enough of a cross section of them who had their own driver training operations. What all of them had in common, however is that there are surprisingly few requirements to become a commercial driver. While they are in constant shortage of drivers since they were underpaid against average blue collar work. Contrast this to you can only fly a commercial plane if you had proven training hours in a simulator of the plane that you will be flying.
Re-Focus Revenue Growth Target
For the balance of the year of this project, our client, the driving simulator start-up invested in product development for this market. We in turn began to put a strategy to address this market inclusive of but not limited to related marketing and sales playbook and qualifying lead/prospecting messages:
- Develop and implement marketing plans, including trade show calendars and association programs, new product introductions and other marketing projects
- Oversee improvements to the company’s website or email marketing program and provide analytics review
- Develop and manage marketing and sales budgets
- Develop marketing and sales forecasting and product branding plans
- Establish and grow a target market share
- Conduct customer, brand and product research initiatives
Breaking the Code
As we continued to conduct customer research regarding the trucking transportation sector. We continued to sell simulators opportunistically during this period. Our first to a very passionate young driver training school. Another to a traffic accident research facility. And another to an unexpected market, or ‘Driver Rehabilitation Center’ helping their patient return to driving. These were okay results but we were looking to bridge the gap to revenue growth and attended, participated, presented and demonstrated our offer to a range of Trucking Transportation industry associations, conventions, trade shows.
What happened next illustrates the value of non-selling conversation with the prospective client about their pain. It was not what our market research initially suggested or promoting professional driver training. Or how our driving simulator is less expensive than using a real truck for training. Or how our driving simulator improves driver quality and professionalism.
The answer to breaking the code was modifying our pitch with how our driving simulator improves their daily operational costs and resulting profits. Truckingresearch.org provided us with the fact based foundation:
|Motor Carrier Costs||Annually per Mile|
|Repair & Maintenance||.123|
Providing the above market insight to the founders of driving simulator start-up led to development of driver-training programs that address all four operating costs line items by addressing driver behavior with ‘How to’ drive:
- Fuel efficiently while maintaining client and corporate commitments. For example, driving 65 mph instead of 55 mph can use up to 20 percent more fuel, and driving with the engine rpm too high can waste several gallons of fuel each hour. Other common habits that reduce fuel economy are frequent or improper shifting, too-rapid acceleration, too-frequent stops and starts from failing to anticipate traffic flow, and taking circuitous routes. All of which are addressed with driving simulator. Depending on the driver profile this program will help them be more fuel efficient between 4-24 percent after training
- Fuel efficiently for impacting repair and maintenance as well, for example you will use less brakes by 80 percent
- Rural roads and highways properly given 60 percent of truck accidents are on rural roads or 25 percent on highways leads to 30 to 60 percent claims reduction
- Slowly and properly when backing up will reduce tire wear and related repair and maintenance costs leads to 4 to 16 percent savings.
- Market Research
- Business Analysis and Acumen
- Strategic Planning
- Sales Professionalism, specifically sales hunter skills
- People Engagement, particularly engaging a conservative audience in trucking circles
- Technology Know-How for supporting marketing and sales projects
Even after breaking the code, we still had some trial and errors in fine-tuning our truck transportation market message.
Some of the positive spin off is that it helped us continue to win sporadic young driver training, rehabilitation and research deals.
The pivot point was delivering a truck driver training demo, of how to back up properly at a warehouse during the Mid America Truck show. We did one every five minutes over three days beginning before and after the show hours. Some of the demo attendees providing positive remarkswere WalMart, UPS through to major truck driver training schools.
A sample of the first resulting seven figure purchase success began with:
- One of the top truck transportation companies, US Xpress seeking a simulator for some of their terminals across the country
- A mid size truck driving school, Delmar College in Texas but serving the large oil and gas industry in the Gulf region.
Behind this case study were my skills, experience, and competencies with:
- Market research which provided me with the trucking industry know how for breaking the ice with a conservative target market
- Putting the research into a viable sales strategy that everyone could buy-into that also required a lot of my people engagement skills
- Sales expertise for improving the market message until you win!
Want Similar Results For Your SaaS Business?
Book your free 30-minute consultation where we can talk about your business — and explore how we can help you achieve your goals.