I recently had the honor of taking on an exciting stretch project at Forrester, helping to create and launch our inaugural coverage of the space tech sector. On paper, this appeared to be quite a shift away from my regular day job covering account-based marketing (ABM) in the B2B marketing practice. Space was my gateway into ABM in the first place, however, way back in the mid ’00s. Back then, if you were marketing to the space sector, you were doing ABM by default, since it was dominated by a very small number of large firms, governments, and agencies. Later in my career, I was also privileged to be assigned into the British government for a year, contributing to the UK’s 20-year strategic review of the space industry.
As we started to appreciate the research project’s potentially enormous scope, my research partner Phil Brunkard and I began by focusing on low earth observation (LEO) satellites, intrigued by the substantial investments that Elon Musk (SpaceX) and Jeff Bezos (Amazon’s Project Kuiper) were making in huge LEO constellations and their potential to connect huge swathes of un- and underconnected businesses and consumers. As we gradually unpicked the underlying business models that governed these businesses, I discovered a treasure trove of lessons in B2B strategy that everyone can learn from.
Lessons In Value-Based Pricing
Historically, space has been an expensive business, which is why for so long it was the preserve of government agencies. Increasingly, though, with the miniaturization of satellites and the reduction in launch costs using reusable rockets, it is becoming more accessible to enterprise users and consumers, not unlike the tech industry’s progression from mainframes to the cloud. If LEO is to truly provide a viable and profitable solution to connecting the unconnected (not just in affluent North America), there is still some way to go, however.
As we were conducting the research, SpaceX had just released consumer pricing for the beta version of its high-speed broadband, priced at $100 per month (plus a $500 fixed hardware cost), but based on our estimates, it would need to find a substantial consumer market willing to tolerate that price point to offset the costs of building and launching the satellites. Even affluent Europe is unlikely to withstand that pricing because it is already well served by terrestrial networks. SpaceX’s British competitor OneWeb was already focusing its efforts on the lucrative enterprise market, so we were unsurprised when SpaceX launched its enterprise pricing in February 2022. While Musk and Bezos can afford to (and will) operate unprofitably for a considerable amount of time in pursuit of a bigger goal, the majority of B2B firms need to ensure that a market will find a comfortable equilibrium at a price point that will both offset upfront infrastructure investments and align with the offering’s value perceived by the buyer (subscription required to access link).
Lessons In B2B Marketing Foundations
The way the space industry markets itself needs to evolve as rapidly as the technology is evolving if it is to reach a significantly expanded audience. For many years, it has existed on relationships forged at industry events but has kept in the public eye through press coverage when interesting discoveries that light up public imagination hit the headlines. It is gradually trying to change itself — for instance, by embracing sustainability messaging.
But to truly capture the enterprise market, it will need to apply some important foundational lessons in B2B marketing. One of the first and most important is understanding demand type: the market context in which an offering is introduced. Demand type (subscription required) helps organizations define market readiness for a solution and is foundational to B2B strategy, shaping everything from the way messaging is created to how opportunities are qualified and handed off to sales to the skills profiles of the sellers that close the deal. The three demand types are new concept (a disruptive offering to meet a previously unknown need), new paradigm (an offering that solves an existing problem in a new way), and established market (an offering that most organizations consider necessary). Satellite operators will need to rapidly transition through marketing and selling their offers as a new concept to the new paradigm that LEO is today and, perhaps five years from now, again into established market. Correctly understanding your company’s demand type and recognizing when it may have changed is a critical lesson for all B2B marketers, one that is misjudged far too frequently.
Lessons In Content Development
With many new and inexperienced buyers of satellite connectivity offerings entering the market for the first time, it is essential that the content they consume along the way is designed to marshal them through the buying journey stages in as frictionless a way as possible. One of the things that fundamentally differentiates B2B buying from B2C buying is that B2B buyers are spending their company’s money, and with this comes risk … risk of making a bad decision, of getting fired if they mess things up, and that the wrong choice will affect lots of colleagues and even the company share price. This is why content needs to be designed very intentionally (subscription required) to address all the questions that are likely to come up. (Bonus tip: These questions are highly predictable in nature and predicated by the aforementioned demand type!) Satellite operators that spend a lot of time producing content that debates the relative merits of different spectrum frequencies may not be supporting new buyers through the buying journey in the best way, whereas explaining how you will protect their and their customers’ data privacy will.
Lessons In Channel Ecosystem Strategy
Part of the promise of LEO, and communications satellites in general, is the ability to connect remote and inaccessible parts of the world. This often means needing to have boots on the ground to be able to sell the concept (and often deliver/install it, too). Unfortunately, establishing a direct sales force in some of the countries that this entails is both hard and often expensive. This is where specialist channel providers come in, since they offer the means to both sell and install the necessary equipment. Established satellite operators have appreciated the value of trusted channel partners for decades and neglect them at their peril. To date, SpaceX is using e-commerce for its premium offering (with no advertising, PR, or search engine marketing strategy in evidence) — if it is to ramp up in the lucrative enterprise market in a meaningful way, however, especially outside of North America, it will need to develop its channel strategy (subscription required).
The space sector is projected to grow significantly in the coming years, but our research tells us that growth comes easiest when sales, marketing, and product are working in tight alignment. Space companies, like a lot of technology companies, are often engineering-led and so take a very product-centric approach. As these organizations seek to scale, they need to evolve from being engineer- and product-led to having an aligned revenue engine that fulfills their growth aspirations. This is why I predict the space sector recruiting heavily from best-in-class B2B sales and marketing leaders in the years ahead. The good news for space tech, however, is that, providing the sector maintains its ability to inspire and provoke imagination, it should find no shortage of candidates!