Become the market leader

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This article appeared in the 7th July, 2008 issue of CRN magazine.

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Become the market leader
While many resellers have a strong sales strategy, they often fall down when it comes to marketing.

Mistakenly, many believe sales and marketing are synonymous. But marketing is not sales and it is imperative that channels work with business partners to develop and understand the power of marketing.

Resellers need to create a coherent marketing strategy and formulate a plan that is focused on their audience and appeals to their customers.

Marketing is not just producing brochureware in a scattergun approach; it is about establishing relations with customers because long-term relationships are most important.

It is easier to retain a customer than get a new customer using strategic marketing.

While there are some very savvy resellers using web-based marketing and sophisticated graphics with online multimedia packages to create a story, at the other end of the scale some think they are fulfilling the marketing imperative through telemarketing activities that date back to the 1980s.

Marketing is the more strategic aspect of the process to drive the interest, desire and action of the consumer, whereas selling is going out and clinching the deal.

Channel Dynamics is a boutique channel consulting firm, specialising in assisting ICT (Information & Communications Technology) companies to sell more effectively, through channel sales training programs and marketing strategies.

Cam Wayland, Channel Dynamics director, said many fall into the trap when resellers try to use the same matrix for a driver as that for the vendor.
He said there will always be a mismatch of focus because vendor and reseller worlds are quite different.

“Vendors might be good at marketing and they have marketing professionals, but they do not use the same matrix as resellers,” Wayland explained.

“Both parties are very different. Channels have to understand what vendors’ objectives are and then see if they align with their own objectives.”

Wayland said while resellers are not typically good at marketing as vendors, they have an invaluable relationship with customers.

“Vendors want to leverage this because they lack the information and access to customers,” said Wayland. “Wherever there is a customer at whatever size there will always be a reseller with most favoured status.”

Wayland explained that vendors want to know who the key contacts are and all about the customer.

“They want to know whether they use brand X or Y and if they have standardised A-B servers etc,” he said.

“If they are an A-B vendor they will want to target that customer and this is knowledge that only a reseller will know.”

Maree Lowe, director at reseller ASI Solutions, echoed Wayland and said that resellers must follow a coherent marketing plan that is focused and targeted to their customers.

“Channels must work with business partners to develop a marketing plan that will work for them,” Lowe said.

“You have to address what is important, for instance, direct sales. You have to know the customer’s business and if you understand that business you are going to be spot on.”

Lowe said it is vital to not only understand the target market, but to know who is who in the market and be flexible enough to move with changes in the market conditions as they arise.

“The way we have to market, as with every other reseller, is to continually change the way we do things and change depending on the market,” she explained.

While it may be obvious to some, Lowe said that doing their homework will help resellers hone that all-important message.

“As a reseller you can waste a lot of money and energy conveying the wrong message to the wrong person,” she said.

“The message must include what benefits the product provides for the business and it is very important to make sure you are talking to the right person, such as the purchasing manager.”

Lowe said everyone, when spending on marketing, needs to get a return on their investment.

“It is important that resellers use the right methods in marketing to identify the right decision-makers and choose the medium that the customer will respond to.

“For instance, there are different ways to market at a CIO and CEO level,” she said.

“There is not too much purpose inviting them to something more suited to the IT network administrator. What they really want to see is a return on investment and flexibility of procurement systems.”

Wayland agreed and said that resellers with the right model will help assess their existing, or prospective, sales channel and determine which partners are really performing, and which partners are simply diluting the marketing effort.

“Our objective is to help organisations select the right partners, develop meaningful programs, and achieve great results. This is done through helping the vendor engage more effectively with the channel as well as improving the channel’s ability to sell the vendor’s products,” he said.

“This will help identify best-of-breed channel program models, and design and/or manage a vendor’s channel program.”

Wayland said an effective channel program or strategy requires sales and marketing people to be equipped with the right skills to consistently execute on that strategy.

This can be achieved through the use of channel surveys to identify strengths and weaknesses in a vendor’s go-to-market strategy.

It can also uncover competitive positioning, and ascertain channel expectations and pain points.

He also explained that partner selection is crucial to achieving maximum coverage with minimum conflict.

“Most organisations will spend a significant amount of time selecting and recruiting sales staff, but adopt an ad-hoc approach to selecting and recruiting sales partners,” he said.

“We believe that you need to take just as much care in selecting your external sales partners as you do on your internal sales staff. Not only can partners affect sales; they also impact your brand and reputation.”

Finding the right partner type with the skills and the motivation to sell your product more effectively is very important to ensure consistency of partner selection and recruitment.

“The outcome will be less time and money wasted on recruiting partners that promise a lot but deliver little,” Wayland said.

Lowe added that to minimise wasted time and money, resellers must target their marketing activities.

“We attended a major symposium a few weeks ago and attendees were top-of-tree decision-makers but attendance was quite costly – you could be a sponsor and spend major dollars or just attend,” Lowe said. “Either way it is costing money and you must choose the right forums such as a Gartner or IDC forum as
a definite way to market.”

She said that knowing the audience and delivering a consistent simple message will help hit the largest target area.

“We target a range of media including magazines and papers in an attempt to get onto the right wavelength of your customers, but these people are not interested in brochures etc, this will send you to the bottom of the list,” Lowe explained.

“You might do better to produce target white papers for IT people, which are not expensive and are targeted to the customer. Case studies are an incredible way of targeting customers,” she said.

However, Lowe and others in the industry say the most indispensable marketing tool in ITC is actually the Internet. She said the medium provides two main categories. A website will draw people in and it pushes information out.
“We have found success in working with vendor sites,” she said. “Appearing on the vendor website allows customers to search the product information
as well as directing them to resellers sites.

“They have resellers on site and users can decide to go on as either a customer or as a business.

“We are a Microsoft Gold Partner and appear quite high in its website. A lot of customers go there and we are promoting solutions to the SMB (small-to-medium business) market.”

According to Lowe, having a presence on the Microsoft site means ASI is able to play on both sides of the fence.

“We are working with the customers going into the MS site and we are also looking for SMB customers,” she said.

Michael Costigan, marketing director at Avnet Technology Solutions, said online marketing is increasingly becoming mainstream.

“It offers electronic direct mail and allows for short, succinct and targeted addresses to business needs,” Costigan said.

“You can provide an embedded hot link to drive to vendor or partner sites and you can also use blogs etc.

“While we haven’t yet seen the blog take a huge effect in the channel area, it offers huge potential, as does social networking.

“Online search marketing is essential. There are one or two sophisticated partners looking at Google and how to optimise their names and we as an organisation actively pursue Google.”

Lowe said the Internet offers a wide range of marketing tools and different schemes to attract a user’s business such as frequent flyer programs.

“We get a lot of Google referrals and emails and we are getting a huge amount of interest. So make sure you are on search engine lists.”

Lowe said having a website that is up-to-the-minute and continually updated is essential and ASI is currently working on a major graphics redesign of
its website.

“You have to make sure you continually update your site if you are working with multiple verticals and multiple customers.

“Because of the variety of customers logging on you have to provide the most appropriate information around the particular user, while keeping it succinct and simple.”

Lowe said that a lot of companies with a web presence run into difficulties when they don’t provide even the most essential contact details.

“A lot of people, when they log onto the websites, want to search and then contact you. But contact details are often embedded and they can’t actually call you and this business is selling, so email and phone numbers must be up-to-date and consistent.”

She also said having terminology that is current is essential. What was acceptable just two years ago might now be obsolete.

“For example to get consistency in organisations what they might previously have called a help desk, is now referred to as a services desk. You must have consistent terminology but also offer a site where users can get service quickly.

“Getting that right and conveying simple messages, while making it easy to access and continually updating and upgrading the website, is essential.”

Anthony Toope, national marketing manager IT, Samsung, said the key aspects to successful marketing for resellers come from what are available from vendors and what is online.

“If looked at it from conventional support for resellers, we have a dedicated reseller website, online, which provides a whole list of facilities and technical information and point of sale material and brochures.”

Toope explained that the significance of being online as a vendor and as resellers is that a lot more focus has been placed on online advertising, with online spending doubling in the past two years.

“The vendor and reseller cannot afford to ignore the “youth-minded consumer” who aspire to be young of mind but are not limited by age and are looking for greater use of a product delivering a higher benefit,” he said.

According to Toope, research shows that customers are twice as likely to go online.

“So then we ask where are the customers going to get their information online? The most popular items are reviews and blogs as reliable sources of information, along with the vendor’s website,” Toope said.

He also added that content is king. Independent information and reviews are seen as being more valuable to the user than generated content.

“If you could make the site content-rich and linked to independent reviews, the user is able to go online to gather information rather than just going to a brochure. Customers more than ever are conducting online research to make their decision.”

Amy Zammit, IBM business partner marketing manager, said resellers should be aware of the dollars as well as the relationship between reseller and vendor.
There is the possibility of sharing marketing activities and a lot of the time the vendor can run events on 50-50 basis.

Zammit said that business partner marketing is a huge focus for IBM and its strategy to go to market through the reseller.

“We drive most of our business through resellers. Our hardware marketing budget is up 50 percent over the last year,” she said.

IBM’s focus is on trying to ensure the vendor’s marketing dollars are providing enough funding for their resellers.

“Funding goes to key partners but we try to make marketing resources available to our resellers so our partners can leverage bigger budgets so they can focus on a bigger market coverage,” she said.

Zammit added that common problems among resellers include little or no marketing budget focused on business and sales and they find it hard to justify a marketing budget that doesn’t show immediate return.

“One of the key areas is that partners go to market but don’t really know how to market,” she said.

“This gives us an opportunity to provide solutions – not just product – but the complete package to enable our sales reps to sell to the partner.

“We have a 10-day approval process, in which all information gets packaged up and put it into our marketing program which keeps rolling every quarter while adding value to our partners.”

Zammit explained that IBM also offers a campaign designer tool online.

“Any partner can access the website and register for free. It allows them to customise templates to add to their own solution and details,” she said.

It offers a complete template already formatted and if they want to do direct mail or email.

“We have also trialled this year Campaign in a Box. Resellers operating in a space such as blades or storage can enter their own details and messaging and then send the solution to customers across Australia and New Zealand.
While there are a number of avenues for partners and resellers to take their product to market, there are some pitfalls as well.

Lowe says one aspect that everyone falls down on is following up their leads.

“An enormous amount goes into planning and executing but it is being able to track and report back that is paramount,” she said.

“If you spend the money and you get the leads you have to be able to follow up and sometimes it is a long lead-time. It could be three to six months or even a year before the deal is done.”

Lowe said a lot of organisations have a lot of information but they don’t do enough with it.

“They should be looking at doing it electronically in websites and web optimisation.”

Wayland said know your customer and vendor objectives and you are halfway there. He explained that marketing is all about turning a “suspect into
a prospect” and then shortening the selling cycle.

“Even if they are not good at marketing they can keep a good record about customers and segment them into a logical database, which will be a value to the vendor,” Wayland added.

“A lot the vendors’ marketing development funds (MDF) go unspent because they can’t find a cost effective or risk-free activity to get results.
“Golf days are gone and vendors are looking for ROI. What they want from a reseller is a relationship and product relevance.”

Wayland said the next step is for the reseller to understand vendor MDF.

“A good idea will usually get funded and the vendor will find funds to do it,” he explained. “Too few resellers come up with good ideas to drive reseller and vendor value-added activity.”

It is not all about the vendor, it’s about the reseller. If they understand vendor MDF policy, they will understand the list of activities for vendors that they will fund.

Wayland said the other part is to understand how the reseller gets paid and a lot of MDF is on a 50-50 basis.

“The vendor wants to see that the reseller has got some skin in the game and it is not just throwing money around. You have to understand the vendor and how to add value, but the reseller shouldn’t expect marketing dollars to be thrown at them.

Wayland said successful marketing also boils down to the basics of being able to write a document or marketing plan and being able to set out the objectives of a proposed activity and outcome.

“If the reseller can do those simple things, if it works the first time it is likely to be repeated,” he said.

With a lot of emphasis on regulatory requirements by vendors, they have to make sure any money spent is spent prudently, and seen to be spent prudently.

“Understanding MDF policy is essential for the reseller who has to know when and how they get paid because it may be that the cycle of invoices is going to Singapore or US and this will affect payment.”

Costigan said many organisations fall down because they think the company’s marketing strategy is the same as the sales strategy and they view the marketing activity as producing brochures.

“Marketing becomes an afterthought,” he said.

“But through our business partners we work with them to understand the power of marketing and the need for strategy and building a marketing plan.
“Establish a marketing strategy and enlisting help is important,” he added.

Simple, but effective, tools can be used in strategic marketing such as sending out an online newsletter once a quarter. Asking for customer feedback is another basic, but useful, method.

Costigan said marketing is a more strategic aspect of the whole process to drive the interest, desire and action of consumer, whereas selling is going out and clinching the deal.

“In marketing it should establish relations with the customer and a long-term relationship is easier to retain than get new customer.”
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