The biggest challenge facing solution providers might not be consolidation, falling margins or scarce financing but a lack of marketing savvy.
According to some of the top channel executives in the industry, too many solution providers aren't doing enough to brand their company and differentiate themselves in the eyes of the customer. At CRN's recent Channel Chief Roundtable, the discussion turned to the issue of marketing strategies -- or not strong enough ones.
Specifically, Scott Dunsire, vice president and general manager of the Printing and Personal Systems Group and Americas Channels at Hewlett-Packard, Palo Alto, Calif., said marketing professionals are scarce or completely nonexistent in most solution providers.
"We all spend a ton of money as companies branding ourselves and whatever strategy we're working on, but the partners don't invest in marketing. Very few of them do," Dunsire said. "When you look around at how many folks are actually in a marketing department at our partners, there aren't many. It's an area where they don't spend a lot of time and effort. They do count on the manufacturer to do a lot of it for them, but if they were smart they would invest in it."
Frank Rauch, vice president of the Americas Partner Organization at VMware, Palo Alto, said part of the issue is that partners often lead with vendor products rather than marketing their own company. Successful solution providers, he said, don't rely on vendors to drive their brand.
"Many good ones do get marketing -- they really do," Rauch said. "Make no mistake, we as vendors need to be able to drive our brand. We need to be able to drive the market. We need to be able to provide the enablement, and we need to be able to provide the marketing air cover, but they are going to have to differentiate themselves."
Frank Vitagliano, vice president of channel sales at Dell, Round Rock, Texas, said many partners are good at marketing their business to existing customers that they've already won. But when it comes to branding and marketing to prospective clients, solution providers are often challenged.
"I think it's a hugely important area. I think to some degree they brand themselves pretty well with their existing customers because with their existing customers they sell their brand -- and they are the brand," Vitagliano said. "They might have a local golf event where they bring in local celebrities or there might be customer appreciation days. In their market, that is what works. What we want to do is support that, but also help them with ideas of here are some other things they might be able to do."
Vendors have long supported their partners with marketing development funds, which solution providers often use for advertising. But Chris Frey, vice president of North American channels and SMB at Lenovo, Morrisville, N.C., said he'd rather see his partners use MDF to build their sales pipelines rather than building up their brand.
"When we talk to the partners around MDF or any kind of dollars, we try to convince them to use the money to get the sales motion working in versus the marketing motion," Frey said. "It's about getting the partner to identify an opportunity and knowing what to say to that customer to get in the door so you can have a solutions conversation versus marketing the name of their company because marketing is interesting, but if you are not a huge company like we are, then it is all about sales motion and all about the pipeline."
Frey said the best ways to build that pipeline are to hold local events for customers or dinners with prospective clients. But that still doesn't solve the overall issue of branding. So what's a solution provider to do?
Get creative, according to the channel chiefs.
Rauch, for example, encouraged solution providers to embrace Twitter and LinkedIn, which can reach a lot of people and don't cost solution providers a thing. "There are a lot of different things they could do. One VAR that comes to mind in the Midwest did all their business around [social media] and they have this massive, massive customer base," Rauch said. "They are not doing big elaborate dinners or breakfast seminars anymore. So there are different ways to do it, and a lot of them are evolving into that."
Edison Peres, senior vice president of worldwide channels at Cisco Systems, San Jose, Calif., said vendors still have a significant role to play in supporting partners' marketing efforts, even if they're not directly funding those efforts with MDF.
"We do actual seminars and events that we spend a lot of money on and we don't promote our product at all during the entire event for days -- we just tell them about how to do better marketing, like the Partner Velocity event that we put together," Peres said. "We bring partners together and we say, 'Listen, here are experts in social media so you understand how to brand yourself using social media,' because they don't know those basics. We all as vendors have elements of that where we try to help them understand how to use the different tools and vehicles of marketing to be able to go out there and succeed."
PUBLISHED OCT. 14, 2013