Mining Product Strategy: What is the most important thing?
Mining companies are notoriously difficult to work with. The excessive red tape surrounding even simple tasks frustrates contractors and confounds boardrooms expecting quick sales cycles. Vendors are often perplexed by the mining companies’ apparent lack of urgency or interest in new products, even when the benefits seem obvious.
You can understand why this is the case in my last article: Mining Buyer Psychology: The Monopoly Mindset: Mining Buyers Psychology
With this psychology in mind, you need to work out how to position your product to mining companies in order to improve the effectiveness of your sales effort.
The first step is to understand, where does your product or service fit with how a mining company makes money. Mining operations can be broadly divided into two categories:
Production:
Earthmoving
Trucks and heavy equipment
Drill and blast operations
Mine engineering and planning
Geology
Drilling
Crushing, screening, and processing
Material Handling
Mine safety and health
Maintenance and repairs
Non-Production:
Environment and sustainability
Compliance and reporting
Human Resources
Back office operations
Finance
Supply chain and procurement
IT and technology services
Community relations and stakeholder engagement
Legal and regulatory affairs
Products or services directly related to production receive more attention, as they’re tied to revenue and costs. However, this doesn’t guarantee a quick sale. Your product must have demonstrable cost reduction or an increase to output, to be taken seriously. If the dollar value is high > 10 million expect alot of scrutiny and many decision-makers to be involved.
Non-production areas, while essential for operations, face limited budgets that fluctuate based on production performances and commodity prices they also face greater scrutiny and longer decision-making processes.
Selling to mining companies presents unique challenges, even when offering products that directly improve production. During my tenure at Company A, we experienced this firsthand with a product that promised significant production enhancements.
Our product was a ‘new technology’ that didn’t have a wide range of adoption or knowledge in the industry, this was met with incredible curiosity. This made an outbound sales strategy incredibly effective, as outreach messages were met with enthusiasm.
Decision-makers showed keen interest in the product, recognising its potential to boost productivity. This positive reception was encouraging, but it masked a critical oversight in our approach.
Our primary challenge stemmed from a fundamental misunderstanding of the mining industry’s operational landscape. We pitched our product as a “platform” – a concept popular in the venture capital world but ill-suited to the mining sector. This approach failed to consider the complex web of existing systems within which our product would need to integrate.
Mining companies, despite their interest, were reluctant to take on the perceived risk of adopting our new technology, as it would require a re-design of current systems to have a new technology at the cornerstone of the new system. This was a risk that they were not willing to take.
They wanted to see benchmarked comparison studies to show the accuracy and reliability in order to take this risk, something that we could not provide at this time. They preferred to stick with tried-and-tested methods, even if these were more expensive. This preference for the familiar over the innovative is a hallmark of the industry’s conservative approach to change.
A key factor in this resistance is the financial stability of established mining operations. Unlike startups or companies in more volatile industries, mining companies often have the financial resources to absorb higher operational costs. These expenses are typically budgeted annually, creating a sense of predictability that companies are hesitant to disrupt.
This experience highlighted a crucial lesson for vendors approaching the mining sector: innovation must be presented not just as an improvement, but as a seamless integration into existing processes. Your value must be benchmarked to show demonstrable reliability, accuracy, cost reduction or production output. The most important for company A was a seamless integration into existing systems with low operational risk and disruption. This was dependent on the strength of the engineering team.
So, what is the most important thing when selling to mining companies? It’s understanding that innovation must be presented not just as an improvement, but as a seamless, low-risk integration into existing processes. Your value proposition must be backed by solid evidence demonstrating reliability, accuracy, cost reduction, or production output increases.
To succeed in this market:
Thoroughly research the company’s existing systems and processes
Prepare comprehensive integration plans that minimise disruption
Develop case studies or pilot programs to prove your product’s worth
Build relationships across different departments to understand varied perspectives
As the mining industry evolves, staying attuned to emerging trends and technologies will be crucial. Vendors who can align their offerings with the industry’s cautious approach to innovation while clearly demonstrating tangible benefits will be best positioned for success.
Ask yourself: How can you reframe your product or service to address the unique needs and risk-averse nature of mining companies? What steps can you take to build the evidence and relationships necessary for success in this industry?
What is your most important thing?