By Mike Rothman
Marketing is expensive and fraught with peril. You know the old John Wanamaker quote: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." That generally applies to marketing as well. Given the fact that value-added resellers (VARs) and systems integrators don't look too favorably upon squandering half of an investment in anything, you need to think seriously about how to get the most out of your marketing investment.
But what if you were just wasting half of your manufacturer's money? That makes it go down easier, no?
Most manufacturers provide their reseller partners with funds, typically called market development funds (MDFs), to invest in building a pipeline for their business. These are resources that you likely have at your disposal. It's just a matter of using them in the most effective manner. This can be a challenge since, unless you are one of the mega-VARs, you may not have dedicated marketing staff.
First let's examine the goal of any marketing effort. You are trying to build a permission-based relationship with your prospects. You want to build your marketing list, using as much MDF as practical to do so.
So the first tip is always be collecting names. Whatever marketing campaign you start, you
The next three tips come from Marketing 101. This stuff is certainly not sexy, but it's critical to increase your presence in your target market and build up that list.
Finally, the last tip I'll leave is the power of the loss leader. There are some vendors who provide low-margin products that do not yield a tremendous amount of either product or services revenue. If you net out the cost of your time, you very well lose money on each deal. So why would you even think about dealing with a loss leader?
It's all about pull. Most of the time you are pushing "solutions" on your customers to solve problems they may not have. In high-volume, low-margin businesses, there is considerable pull on the part of the customer base. Antispam is a great example of this. A few years ago, every customer was clamoring for an antispam device. One of the leading companies did mass-market marketing campaigns that resulted in a flood of inbound leads to their resellers. These leads even had a decent chance of closing because the prospect wasn't looking at other solutions.
The inbound deal flow is worth its weight in gold. You sell the customer the first product, even though you don't make a lot of margin. Then you have a business relationship with the customer (notice they are no longer a prospect) and you then start working on lots of other projects (basically your entire line card). That one low-margin sale could be the start of a long-term, very profitable relationship with the customer.
Marketing is all about repetition and leverage. The vendors are desperate for activity, so they are willing to sponsor your events and other marketing initiatives. Use those "free" market development funds to build relationships with your prospects and sell them multiple products and services over and over again. That's how VARs get rich.
About the author
Mike Rothman is president and principal analyst of Security Incite, an industry analyst firm in Atlanta, and the author of The Pragmatic CSO: 12 Steps to Being a Security Master. Get more information about the Pragmatic CSO at http://www.pragmaticcso.com, read his blog at http://blog.securityincite.com, or reach him via e-mail at mike.rothman (at) securityincite (dot) com.
This was first published in January 2008