Distributors and large vendors are stepping up their efforts to support solution providers’ business by expanding end-user lead generation programs.
At its national conference this week, value-add distributor Synnex announced expanded efforts to deliver more and high-qualified leads to resellers. The idea is that a new customer for solution providers will result in more sales and revenue for the entire channel chain.
“The only way we can all be successful in today’s economy is to work more closely together,” said Bob Stegner, senior vice president of North America marketing at Synnex. “We have more than 4 million end-user records for lead generation. What if [solution providers] had a valued partner you can trust to call customers for you? If I only have two sales reps, I would prefer that they were out there selling something than trying to call 50 people to get an appointment.”
In a quick poll of conference attendees, 40 percent said they anticipate their business growth will come from signing new customers for product sales and services. And 47 percent of solution providers say lead generation is the key to finding new business.
Lead generation remains a touchy issue among solution providers and vendors. Many vendors and channel leaders say that it should be incumbent upon solution providers to generate their own leads and build their sales. The rationale behind their position is that vendors are already discounting products and providing technical support, and that finding new customers only adds cost to system designed to accelerate sales.
Vendors and distributors have always provided leads to solution providers. What Synnex, Hewlett-Packard and others are stepping up their lead generation efforts because many solution providers lack the marketing expertise and resources to develop their own leads.
“We’ve literally turned that whole machine around to driving validated leads. Are they all high quality leads? I’d say they’re getting better. It’s paying off. We’re getting more leads out there,” said Adrian Jones, vice president and general manager of HP’s Americas Solution Partners Organization.
HP has identified more than $68 billion in business that remains untouched by HP or its channel partners. Providing its Elite partners with strong leads and sales support services will expand HP’s business and customer base, which immediately translates into new revenue.
“If we give a channel partner $1, we know that they’re going to put in a $1 investment. If we give a direct sales rep $1, we only have a $1 investment,” Jones said. “We’ve done the research; we know there’s a better return going through channel.”
Solution providers need the investment and support. A quick poll at the Synnex conference revealed that 21 percent of solution providers employed no marketing people and another 48 percent only have one or two marketing professionals.
Randy Mach, a senior system engineer at Pharr Technologies in North Carolina, spends much of his time supporting sales teams in selling new business and servicing existing customers. The idea of a distributor or vendor supporting his company’s sales with lead generation services is welcome news.
“Lead generation is the most time consuming and expensive task in our business,” says Mach. “If I can have a service line up face-to-face for the sales people with clients rather than having them cold calling, it’s a benefit for everyone.”
Synnex’s lead generation support strategy does not aim to take ownership of the customer away from the solution provider, executives at the distributor say. But the program does refine and qualify the leads and monitor activities to ensure that the leads reach the right solution provider with the product and sales capacity to seal deals.
“What we are doing is data mining to see who solution providers have sold to and who they are selling to see if there are more sales opportunities, to see what’s under our nose and under their note,” says Lisa Robb, Synnex’s vice president of marketing and head of the lead generation program.
To illustrate the power of data mining leads, Robb recounts how Synnex examined printer sales and leads to identify new opportunities for refresh and upgrades. Of 6,000 end user leads, solution providers closed 1,700 deals that resulted in $12 million in new business to Synnex.
Robb acknowledge that this approach may not always produce the intended sale; a lead developed for digital signage for one solution provider may end in a printer sale for a different reseller. But Robb and Synnex believe that any sale will benefit solution providers and vendors in the chain.
While distributor or lead generation programs may provide appointments and some sales opportunities, some solution providers believe lead generation is something that they should be doing on their own. Lead generation translates into relationships, and giving up lead generation could also mean longer sales cycles and weaker relationships.
“If it’s you making the initial call, you’re much less inclined to get in front of the real decision-makers,” says Simon Pinkney, director of operations at Forsythe Technology.