By Contributing Editor Dianna Huff
Marketing to small and midsized businesses (SMB) is hot.
Companies who purposely ignored budget-conscious SMBs in favor of the more profitable enterprise market are now introducing programs or products aimed right at them. For example:
o SAP announced in May it was introducing a new SMB tiered channel program.
o Oracle has introduced a line of SMB products.
o And, Cisco is now offering product bundles, simplified applications, financing and training to the SMB market.
Which means, knowing how to market to IT consulting firms and resellers is going to be more important than ever. Why? Because they already have the ear and trust of their SMB clients and are recommending millions of dollars worth of products and services to their SMB clients. First remember, IT consultants and resellers are SMBs themselves
Research firm IDC has segmented the US market for IT-related products and services into four distinct areas:
1. The Fortune 1,000 and other large organizations, of which there are approximately 7,000
2. 98,000 midsize companies, those with 100-999 employees
3. 8.0 million small businesses, those with less than 100 employees
4. Home-based businesses (SOHOs), of which there are 32.5 million
Obviously, there’s a market out there – as evidenced by the growing SMB sales for companies like HP. Of HP’s $80 billion in sales in 2004, nearly a third was from SMBs.
Advises Charles Epstein President of BackBone, an IT marketing consulting firm, “When selling to IT resellers, in addition to aligning your technology with their practice areas, you also have to understand the SMB market, particularly the needs of SMB companies.” Four rules:
Rule #1. SMBs don’t buy unless they need it. Your marketing messages have to offer real solutions to their problems or relief of their business pains.
Rule #2. SMBs are typically resource constrained and they don’t have much time. When delivering product messages, you need to make your case succinctly, quickly, and compellingly.
Rule #3. Most SMBs lack dedicated IT support, so an OEM’s, or reseller partner’s, ability to support the product is key.
Rule #4. SMB companies are price-sensitive. Your product needs to be priced accordingly and have flexible pricing options that fit an SMB budget. And, you have to be able to demonstrate a quick ROI.
SMB IT consulting firms and resellers are no different. They’re busy running their own businesses and putting out client fires. However, in addition to being price-sensitive, consultants and resellers are acutely aware of the bottom line – theirs and their clients’. Show them how your product is an ideal revenue opportunity for them and an ideal benefit for their customers, and you’ve got their attention.
You also need to convince them that you really will support them through both the sales process and the implementation process.Three industry pain points affecting IT consultants and resellers
Pay attention to these when copywriting and selecting offers: in addition to the typical pain points affecting most SMBs, ie: employee issues, government regulations and the like, IT consultants also grapple with the following industry issues:
Pain #1. Data and network security
The trend to wireless and mobile computing has led to a great need for network security – as evidenced by the recent Bank of America fiasco where 40 million customers’ credit information was compromised. Ted Demopoulos, an independent IT consultant and Principal of Demopoulos Associates, states, “People are clueless about security. I took a ride around Boston on Rte. 128 last year and found over 100 open wireless business connections.”
Problems are many and include company employees setting up a wireless router in a conference room – without telling anyone. Or they’ll bring home a company laptop and plug it into their cable modem – which lacks a firewall. And, disgruntled employees can and do inflict serious damage to a network before leaving a job. Not only are these serious problems for any company – they are very real headaches for IT consultants and resellers.
Pain #2. Managing partner relationships
This topic came up repeatedly in our interviews with IT consultants and resellers. The onus on managing the partner relationship falls to the consultant or reseller; the reason it’s painful is because it takes too much time – time no one has.
Says Brian Carroll, CEO of b-to-b lead generation firm InTouch, “OEMs really need to take the initiative on this. If they want to compete in the SMB marketplace, they have to view the VAR (value added reseller) as the customer, not the end-user. VARs are the influencers and opinion molders. They recommend products and services. In order to successfully market to them, OEMs have to take a consultative approach and help them be more successful.”
He notes Microsoft is doing a great job with this by having sales lead expert Mac McIntosh give VARs marketing and sales training. “This is what VARs need,” states Carroll. “Not another product brochure.” McIntosh himself told us that Microsoft has three methods for helping its VARs: Microsoft will generate leads for them; teach them how to generate leads; and give them tools, like templates, case studies, etc., so they can do it themselves.
Pain #3. Software licensing and Sarbanes-Oxley compliance
Sarbanes-Oxley (Sarbox, for short) is rearing its head in the IT world due to companies needing to honor intellectual property rights. Scott Rosenberg, CEO of New Jersey-based Miro Consulting, a company that advises clients on the strategic considerations of software and the ramifications of Sarbox compliance states, “The link between intellectual property and licensing is vastly underrated.
“A midsized company with hundreds of employees has complex licensing issues. Because of this, the company can inadvertently fall out of compliance with its partner.” The partner usually has the right to audit – and when they do, they sometimes find millions of dollars in non-compliance. Sarbox rules state this issue can’t be hidden until the end of the quarter, a tough-to-swallow call for IT managers who have to report to the CFO and/or CIO.
Rosenberg notes that even smaller companies have a hard time with licensing issues. Pat Esposito, CEO of Impact Management, an IT consulting firm based in New York, agrees. “One of our biggest pains is explaining complex licensing agreements to our customers. It takes a lot of time – time that could be better spent obtaining new clients.” 7 tips for marketing to SMB IT consulting firms and resellers
Ok, so IT consultants and resellers have a lot on their plates. They’re running their businesses and they’re on-site with clients putting out fires. They’re rarely at their desks and when they do have time to review information, they want “practical, tactical.” So how do you market to them? The answer of course, is it depends.
John Grady, President of b-to-b lead development firm The Lead Dogs, agrees. “It’s hard to say, ‘Use only a #10 letter versus a glossy mailer’ or ‘Never cold call.’ The minute you give that advice, you’re missing those prospects who do read glossy mailers and throw away #10 letters.”
Grady recommends marketers test one or two strategies concurrently and then track the quality of the leads/inquiries rather than simple response rates. “Sure, you’re going to get great response if your offer is an iPod, but will those leads be highly targeted?” he asks.
What really works? We interviewed six IT consultants to ask them how you should market to them more effectively. Here's advice from the horses' mouth:
Tip #1: Provide meaty marketing messages.
Bruce Hilliard, Principal of Business Automation Associates, an independent computer consulting firm in Phoenix, Arizona, reads ads for new product information. He advises copywriters focus on one or two quantifiable benefits and then explain how the product will deliver. “Too many times,” he says, “an ad will have a laundry list of benefits with sketchy information.”
Almost all the consultants and resellers interviewed for this report said they read print magazine ads (!) and are looking for specific solutions to real needs. They look for the following in marketing copy:
-> Revenue opportunities – Remember, a reseller’s business is based partly on reselling products. Motivate them to call you by stating how your product will benefit their bottom line.
-> Exclusivity – Resellers don’t want to be one of many resellers in a region.
-> Referrals/leads – Will you send the reseller leads or referrals?
-> Technical support – A biggie. Consultants and resellers want OEMs to provide top-notch technical support.
Tip #2: Telemarketing does work – if it’s done right.
Using telemarketing to hard sell products and services will not work – so don’t even try. The key, Grady says, is to position telemarketing campaigns as a way to research needs and to find the right person to talk to.
“You have 20-30 seconds to get someone’s attention on the phone,” he reports, “so you have to ascertain – fast – who is the person you need to speak to and if that person has a need for your product. Then you begin a conversation where you further qualify the prospect.”
Tip #3: Invite consultants to demos at trade shows.
IT consultants and resellers love demos because it’s how they learn about new products they can then recommend to their clients. However, they have to have a need before they’ll take the time to do a demo, which goes back to Grady’s point about qualifying your prospects. But when they do have the need, they’ll make time for you.
Says Demopoulos, “I make time for demos at trade shows. It’s great information transfer in a small amount of time.”
A glossy invite will work well, as long as the message is clear and compelling. Mail the invite weeks in advance. Remember, if the mailer isn’t immediately thrown away, it will end up in your target’s “to read” pile for action later. Following up the mailer with a non-salesy, polite phone call is good, too.
Whatever you do, don’t rely on email only when inviting prospects to view demos. Your message is likely to get lost in the clutter and forgotten.
Tip #4: Webinars are key for consultants and VARs.
Webinars that present information on a hot industry topic, feature a big name speaker, or even product demos, are a great way to reach IT consultants and resellers.
In this case, if you’re targeting customers and/or prospects with whom you’ve established a relationship, email may work well (test it against a mailer). Says Bruce Billingham, President of IT company Micro Support Group, “I pay attention to email from current vendors.” Demopoulos states he’ll immediately add the Webinar time and date to his calendar, and then will attend as time allows.
To ensure high attendance, schedule Webinars early in the week and first thing in the AM – before fires are raging out of control – and keep them to one hour or less.
Tip #5 – Make it easy to find online product information.
Says David Stinner, President of an IT provider US Itek Group, “My office is turning into a library because OEMs sends me way too much product information. I keep it because it’s so hard to find online. But I don’t want to be a library – the OEM should take responsibility for this.”
Key -- *Don’t* assume you know how they want it organized on your site. Specific suggestions from consultants and resellers include:
-> Organizing information by product category, with high-level material easily available.
-> Organizing information by verticals.
-> Including all information about a product in one place: specs, features/benefits, any known compatibility issues, 2-page executive summary (that the VAR can give his client), and licensing information.
-> Adding marketing pass-along materials – Consultants and resellers don’t want to come up with marketing messages for an OEM’s products and services. They want you to do that. Help them by giving them value propositions, product positioning, and feature/benefit statements that they can find online.
-> Prominently listing the technical support hotline number on every page within the reseller section of your site (in other words, don’t make them hunt around for the “contact us” page).
Tip #6: Offer “executive summaries,” case studies, and testimonials.
Help consultants and resellers recommend your products and services with information they can give their clients. Says Esposito, “I’ll take the time to read a 20-page white paper full of technical jargon because I have to, but my clients won’t. They’re too busy. They want a two-page executive summary that’s easy to read and understand.”
Says Demopoulos: “Case studies. My clients love case studies!”
Billingham adds that having licensing agreement information summed up in an easy to understand two-page summary would be great, too.
Tip #7: Invest in PR for print and Web
Remember that “to read” pile sitting in IT consultants’ offices? Stacked in it are consumer magazines and trade publications waiting to be read.
Consultants and resellers read ads looking for new “revenue opportunities,” (ie: partnerships) and technical articles or application notes in order to stay current on industry trends and issues. Publications include everything from consumer-based PC World and Consumer Electronics to highly targeted trade publications such as Internet Security and VAR Business.
Consultants and resellers frequently go online for information as well. CNET.com was frequently cited as a source of information as was Google news alerts and a few specialized blogs.
Consultants and resellers are hip to RSS but only a few use it as a way to manage information – although this will probably change as more people become comfortable with it.
The bottom line, however, is understanding what motivates a consultant or reseller – and that is value. States Stinner, “Show me the value of doing business with you. What’s your value proposition? I have no reason to look at your product if your value proposition can’t be proved.”Useful links related to this article
-> IT marketing specialists we interviewed:
BackBone, Inc. http://www.backboneinc.com
InTouch, Inc. http://www.startwithalead.com
Mac McIntosh, Inc. http://www.salesleadexperts.com
The Lead Dogs http://www.leaddogs.com
-> IT consultants we interviewed:
Business Automation Associates http://www.bizauto.com
Demopoulos Associates http://www.demop.com
Impact Management http://www.impactmgmt.com
Miro Consulting http://www.miroconsulting.com
Micro Support Group, Inc. http://www.ms-group.com
US Itek Group http://www.usitek.com