Marketing success comes when solution providers, vendors work together
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The most successful demand-generation campaigns by far are collaborative efforts between solution providers and key vendor partners.
But the ultimate responsibility for identifying and following up on qualified leads rests squarely on the shoulders of the solution provider. And that's why an increasing number of solution providers are hiring business development managers to focus on these activities.
"When everything is said and done, we are responsible for generating our own business," said Bob Norton, founder and executive vice president of Select, a Westwood, Mass.-based network design and services company.
Select expects to spend at least a half-million dollars this year on a broad range of direct-mail campaigns, telemarketing efforts with outside firms and other activities, Norton said. Ultimately, the company expects to handle more of these opportunities in-house, he said. "The cost of each successful lead is very high; if you look at the statistics of it, it's appalling," Norton said.
Too often, vendors shovel unqualified leads at solution providers that are a waste of time to follow up, said Eric Nitschke, managing director of Launch International, a Doylestown, Pa.-based strategic marketing company that works on demand-generation campaigns. This is because the campaigns that generated those leads are often too product-focused, he said. "You need to tie a solution back to a solution provider's capabilities," he said.
That's one reason Alvaka Networks President Oli Thordarson hired a vice president of business development and marketing, Kevin McDonald, about a year ago.
"I'm a complete phone animal, and I am extremely tenacious with clients," McDonald said. Although it took more than 100 phone calls to land some of his first meetings, those contacts are now among Alvaka's best repeat customers, he said. One of McDonald's key priorities since joining Huntington Beach, Calif.-based Alvaka has been to establish an informal network of companies that the solution provider makes its priority vendors in given technology specialties. Among other things, Alvaka's team has shared sales approaches with these vendors so their stories are more in sync.
"Prospects are less concerned with brand and more concerned with having the capabilities they need in one place," McDonald said.
Robert Whiton, managing director/CEO of Net Solutions, Tustin, Calif., said another key to nailing qualified leads is making sure each telemarketing or direct-mail campaign involves an immediate call to action. Whiton also puts a lot of stock in lead exchange groups, which small businesses can join for a monthly fee. Paying $600 into one of the groups has yielded $25,000 in gross profit so far, while an investment of $1,200 in a second group has yielded $15,000 in gross profit, Whiton said.
Pete Busam, executive vice president of Decisive Business Systems, a small-business integrator in Pennsauken, N.J., said referrals have provided some of his most qualified leads and the company offers a 3 percent finder's fee on the first sale to any referred client. In late April, as an example, Decisive paid $495 to a neighboring business that helped it sign a $15,000 services contract.
Of course, solution providers said they would welcome more joint marketing opportunities with their vendors in order to stretch their demand-generation dollars. Michael St. Laurent, director of marketing for eCoast Sales Solutions, a Dover, N.H., campaign management company, said 60 percent to 70 percent of the money used to fund his projects comes from vendors. The rest is chipped in by solution providers.
"We use the daylights out of [co-op funds]," said Select's Norton, which has worked with eCoast on several recent campaigns. "Every reseller that doesn't use every nickel is out of his gourd."
Certain vendors are looking for ways to use this philosophy to their advantage. KVM vendor Altusen hopes to use its lead-referral program to gain a competitive edge as it builds its channel, which today includes about 20 VARs. "We call not only the VAR, but the specific rep at the location that works the type of account," said Jan DeSantis, VAR sales manager at Altusen, Irvine, Calif. "As much as you give, you get back. Every lead we have given has been followed up."
Lead generation will be part of Computer Associates International's investment in its channel program this year, said George Kafkarkou, senior vice president of worldwide channel operations at CA, Islandia, N.Y. Specifically, CA is looking for ways to help solution providers cross-sell into its existing customer base. Leads will be referred to the customer's preferred solution provider, he said. "It's the customer's choice; we choose not to make that decision."