Vendors Targeting SMBs Must First Know Their AudienceBy Pedro Pereira | Posted 2005-04-08 Email Print
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Opinion: When targeting SMB companies, IT vendors should enlist channel partners and make sure they do their homework first to learn everything they can about their target audience.
Satellite radio use has increased to 5 million subscribers and, by some estimates, will top 8 million by year's end. If that happens, adoption of the service will surpass the speed with which cell phone use took off.
Consider this for a moment: Users are rushing to pay for a service that has been available for free since listeners crowded around the first crackly transistors a century ago.
That's because what they are paying for with satellite radio suits their tastes far better than the formulaic one-size-fits-all fare of the corporate-controlled commercial airwaves.
There is a lesson in this for IT vendors targeting products to small and midsize businesses. You have to know your audience. And you must tailor your product and services to that audience.
This holds true for radio and publishing, and it holds true for technology.
Vendors must also understand that reaching the SMB base effectively requires helpthe kind of help they will get only from channel partners.
In targeting small and midsize businesses, vendors must keep in mind SMB is not a homogeneous market. It is composed of companies of vastly different cultures and sizes in locations and communities as divergent from each other as are the businesses themselves.
No vendor can build an infrastructure to effectively address such divergent needs without a framework with channel partners as building blocks.
Attempting to reach the diverse SMB market without channel participation is, if not impossible, certainly daunting.
Sure, vendors can set up online stores or partner with CDW or Buy.com to sell low-margin volume to small and midsize companies. And that's OK if that's all you need.
But this approach falls short of addressing fundamental business needs beyond setting up a laptop, printer and Web connection.
A local business seeking to deploy a 10-seat accounting software or back-office system, protect a small network from malicious intrusion or deploy wireless technology will get the best service by calling a VAR.
No one understands the needs of a small customer better than the local VAR who is intimate with the customer's computing environment, has serviced it and keeps it running.
VARs build relationships with local businesses akin to those you may have with your mechanic or plumber.
Trust between service provider and customer grows over the years, and when the customer has an emergency, a technician can get right to work without spending a lot of time on discovery because he or she already knows the customer's environment.
When developing a channel strategy, be it around a specific product or an overall corporate program, vendors should bring channel companies into the planning process.
Consultation with key VARs, service providers, integrators and distributors will give vendors an accurate sense of the needs of small and midsize customers.
The best channel programs are not created in a vacuum.
By consulting with potential channel partners, vendors will avoid past practices that met with limited or no success.
A changing landscape.
Until recently, the concept of an SMB product among many vendors, especially software companies, was to scale down an enterprise product for smaller companies, put the SMB stamp on it and expect VARs to go sell it.
For complex technology especially, this is a recipe for failure.
For starters, "small" and "midsize" are a long way apart, even though they get lumped together.
Larger midsize companies may operate as scaled-down versions of large enterprises with similar needs, but the smallest of small businesses are as different from one another as snowflakes in a blizzard.
A two- or three-person office has support needs substantially different from those of a 50- or 100-user company.
As obvious as this seems, a lot of vendors haven't always been savvy to these dynamics.
But the landscape is changing. Partnering consultants and channel analysts say vendors in the last year or two have become much better at targeting products specifically to SMB and building partner programs that make sense.
Vendors are being more selective about recruiting, taking pains to ensure they sign up partners with the right competencies.
Good channel programs also include such components as lead generation, targeted and interactive Web sites, systems that facilitate partnering among VARs and keep track of relationships, co-marketing efforts such as joint seminar participation and demos, and targeted advertising.
Of course, building reasonable margins into product sales always helps. And that's important to remember.
Prices must be reasonable but not necessarily basement-low. After all, 8 million listeners are expected to be paying for satellite radio at the end of the year.
Vendors that build channel strategies with the necessary components understand what commercial radio owners are being forced to remember as listeners abandon their limited playlists and screaming commercials for the greater musical diversity and focus of satellite radio: know your audience.