How to make the most of your buying clientele
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Solution providers are going to face a challenge during the next 12 months. According to VARBusiness' SMB end-user research, only 38 percent of respondents indicate they are likely to spend via the channel; a similar percentage (30 percent) say they are sitting on the fence. That response, in fact, varies little by company size, IT budget or technological sophistication. The situation is further compounded by the poor economy, which is forcing companies to either place projects on hold (57 percent) or leverage existing technology investments (84 percent), VARBusiness' survey found.
With that as a backdrop, VARs must figure out how to make their customers' technology-spending priorities line up with their business needs if they want to maximize value to customers and win new business. At the same time, VARs need to pay the rent without becoming industry visionaries. (Let the vendors do that stuff.) When selecting an outsourcing partner, Yankee Group research shows that 70 percent of SMBs rank a solution provider's understanding of their businesses as the most important criterion. To thrive in today's economic environment, resellers must make the most of existing customer relationships,which is easier to do than building new ones,learn how to sell consultatively, recognize where both short-term and longer-term opportunities await, and develop one or more unique areas of technology expertise.
According to VARBusiness' SMB survey, companies that lean toward buying through the channel are more likely to purchase security and VPN platforms; PCs/servers and software platforms; Internet or Web-related hardware, software or services; and wireless LAN and mobile devices. From a software perspective, they are looking to upgrade vertical-market applications, connect employees to the Internet and automate customer interactions. Those priorities are similar to results obtained in Yankee Group small-business surveys conducted in Q3 2001 and Q1 2002, which found wireless LAN, VPN and security technologies were the only categories where spending increases were anticipated during the next 12 months.
To stimulate channel business, solution providers have two main options: You can either deepen your current client relationships or convert the fence-sitters into channel users. Understanding the technology needs of the market and the specific needs of a prospect's business can stimulate business initially and also go a long way toward developing lasting, consultative relationships. For example, a customer's desire to connect its employees to the Internet can be used as a springboard to find out what the customer wants to do on the Internet. The VAR can help educate a customer about those possibilities, and then later, perhaps, sell them a solution that automates customer interactions by using Web technologies. Obviously, that is not a quick-hit process, but one that takes time and effort.
Where can a VAR turn to get help in developing more advanced selling and consultative skills? To your vendors, like Cisco, IBM, Microsoft, Sun, 3Com, etc. In today's economic climate, they will go the extra step to help channel partners that are taking an extra step, too. Indicate your interest to them in moving up the food chain, show them some commitment, and then make sure they follow through with the appropriate training and support programs.
Michael Speyer (firstname.lastname@example.org) is director of SMB communications at Yankee Group, a Boston-based researcher.