Advice To VARs: If You Show Them Solutions, They Will Buy

A recent study by the Yankee Group revealed that companies with up to 19 employees spent an average of $16,500 on technology in 2005. For businesses with between 20 and 99 employees, the average IT budget was close to $73,000.

“Some things came out [of the study] in terms of technology challenges that customers were looking at, and they’re the kinds of things that solution providers are well positioned to take advantage of,” said Russell Morgan, president of the Dallas-based Information Technology Solution Providers Alliance.

The Yankee Group study found, for example, that the top concerns for small businesses were application integration, a lack of sufficient IT staff and the high cost of some technologies. About 60 percent of small businesses were worried that technology costs were too high for their budgets.

“They’ve got these distinct and separate tools and they don’t have a good way to pull them all together,” Morgan said. “And there is a tendency among small and medium-sized businesses to think technology is more expensive than it actually is.

“They’re concerned about the cost of new technology. A solution provider [has to] sit down with them and say, ‘Here’s what it’s going to cost to be able to do that.’ I think the fundamental thing behind that is a lot of small and medium-sized businesses are looking at their current IT staff and are realizing they don’t have the horsepower,” he said.

Meeting customers’ demands to do business online and on a specified platform is a challenge, according to some 30 percent of very small businesses and 40 percent of small businesses surveyed by the Yankee Group.

However, Morgan said he expected Web presence to be a greater concern to the small businesses surveyed. “It’s [apparently] not a huge issue, but I had actually thought it was going to be,” he said.

Citing other findings of the poll, Morgan said solution providers who can talk to small-business clients in business terms, not technology terms, about how they will benefit from specific technology should have success in the market.

More than 30 percent of small-business respondents said they were not sure how technologies apply to their businesses and pain points, according to the survey.

The same percentage were worried that technology solutions would be too complex.

“It’s critically important that a solution provider have good, strong business skills,” Morgan said.

“When [successful solution providers are] talking to customers, they’re not talking bits and bytes, they’re talking about that customer’s business and how it affects their time to market, their throughput, the ability to avoid downtime with their infrastructure, the ability to link from their Web site to the back-office systems,” he said. “You have to talk about what a solution is going to deliver to a customer.”

Once a customer is sold, word-of-mouth is the most reliable way to attract new customers, Morgan added.

“It’s always important to think of every customer you have as a reference account. It’s critically important that when you do something for a customer, you document it as a case study of what was created, and you turn that customer into someone who will talk to other potential customers,” he said.

“Solution providers who have been paying attention are well positioned to be able to address the kinds of concerns that customers indicated they have … and to make technology work for you, and not make you a slave to that technology,” Morgan said.