While many solution providers believe that increased market share and new customers will be important drivers for their growth next year, many observers say that VARs don’t do as good a job as they think they do or that they could do with marketing.
That may be because of shifting and differing goals between what vendors want in cooperative marketing efforts—to get new customers—and what solution providers often want—to sell deeper into their existing customer bases, said Beth Vanni, director of the consulting practice at Amazon Consulting.
Fifty-eight percent of solution providers say their main focus in 2008 will be to increase market share, and 54 percent say a key driver for profitability next year will be new customers. That’s according to new online research from Ziff Davis Enterprise of 393 solution providers.
And while 84 percent of solution providers said that their own marketing initiatives were either very or somewhat important, and 59 percent said vendor-sponsored programs were important, many VARs have few resources dedicated to marketing.
Although solution providers surveyed had an average full-time marketing staff of about 4.3 people, 26 percent of those surveyed said they had no full-time staff working on marketing and 19 percent said they had one full-time staff member working on marketing.
“The majority of VARs we are talking to have very few resources dedicated to a consistent marketing message,” said Todd McKendrick, vice president of sales at Do IT Smarter. The former MSP now resells a managed services platform to other MSPs and earlier this year introduced a marketing component for its partners.
Most of the solution providers surveyed by Ziff Davis Enterprise (62 percent) said that their Web sites —sometimes including blogs, videos and other components—were key elements of their marketing strategy. Fifty-two percent of those surveyed said that e-mail communication was a key element, and 54 percent cited customer demand-generation. But these avenues may not be delivering everything they could.
“They perceive that they have good marketing because they are getting some referrals. But when we look at marketing we are looking for net new prospects,” McKendrick said. “Some of these guys are so inundated by the day-to-day activities of the company that they don’t have time to manage the marketing campaigns in an effective way, and if you don’t stay on top of that stuff you fall quickly from the top.”
He added: “Prospects won’t understand what you do. They won’t understand the whole plan of IT support.”
Those VARs that do a good job of marketing are the ones that focus on branding themselves rather than relying on the brands of their vendors, said Vanni.
“The more marketing savvy VARs spend a lot of money on differentiating themselves clearly,” she said. “Rather than say they are a technology solution provider, they go for specific expertise in a specific market. You see lots of reseller marketing stuff that is very generic. Investing in strong clear branding is very important.”
McKendrick said that there are some VARs that have good marketing plans, but that many challenges remain.
“For many many years the VAR community was dependent on vendor and manufacturer—’we have Cisco, we are the best.’ There was margin in the hardware sale and implementation then, but today the brand of the VAR has become the most important brand in the customer environment. The customer no longer cares that it’s an XYZ widget in place; they just want to know that it works and you stand behind it if it breaks.”
For VARs that have not dedicated many resources to marketing but want to start, Vanni recommends they tap the wealth of marketing collateral available from vendors.
“While it takes time to weed through to find what you want and how to use it, the amount of sales tools and marketing templates and lists and so on available through IBM’s Web portal is massive,” she said.
McKendrick and Vanni both recommend that if you plan a budget for marketing, be consistent with it. If $500 is dedicated to marketing each month, that’s how much must be spent on marketing every month, not just when the funds are freely flowing.
Vanni also recommends VARs make better use of their Web sites. For example, really well-written case studies or testimonials can provide good differentiation so that VARs don’t get lost in the shuffle in competitive environments.
“Not just 50 words on the Web site, but something deep,” Vanni said.