Time to Abandon Vendor Brands - A Unique Brand
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The better strategy for solution providers, Crotty says, is to create a service or product offering and create a unique brand for it. The reasoning is simple: The offering may have the same capabilities and features as a competitor, but the branding is unique and forefront in the mind of the customer.
"When you have well-defined and differentiated offerings, you can define pricing," he says. "That's key in value pricing. Customers need to understand what they're giving up for a lower price. They need to understand the pain and suffering they're going to get with the lower price."
If you want proof of solution providers who thrive without their vendors' branding support, check out EDS's Web site. Nowhere will you find a link that says "partners" or a list of products by vendor brand. In fact, EDS has applications for "suppliers" who can provide products to the EDS portfolio. EDS, a $22 billion integrator and service provider, stands on its own brand strength and marketing, and competes quite well against the likes of IBM.
Skeptics may say it's easy for the likes of EDS and the elite of the channel to stand on their own feet, but smaller solution providers are reliant upon vendors for MDFs (market development funds), training and tech support. Crotty agrees that there's a Catch-22 since some vendors use their support and MDF as a control mechanism. To reject a vendor's brand could invite vendor reprisals and lack of support.
It's a tough choice, but one Crotty believes solution providers should make. As competition gets more intense and end users look for suppliers and services that improve their businesses, the only ones that will win business and thrive will be those who can articulate their value proposition. Those who are addicted to commodity products will ultimately face deteriorating market positions and steeper challenges from those who do promote their own brands. In his mind, it's not only the right choice—but the best choice.
"If I was going to start a solution provider today, I would be service oriented, but I would spend all my money on marketing," Crotty says. "I could go win deals all day over the guy who has a booklet of certifications."
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