With access to market development funds and manufacturers' marketing collateral and sales leads, winning new business in the channel looks -- at first glance -- to be a breeze. And certainly, those value-added resellers (VARs) and solution providers whose businesses are thriving make technology business development look easy. But operating in an environment inundated with confusing jargon and where purchasing decisions can take months has its own set of challenges. Indeed, in a recent survey conducted by SearchITChannel among more than 200 IT solution providers in North America, winning new business ranked among the top three challenges (from a list of 25) respondents face.
According to Charles Weaver, CEO of MSPAlliance, a Chico, Calif.-based organization for managed service providers and cloud providers, there are two areas MSPs typically struggle with when acquiring new customers. The first is lead generation. While MSPs operating in vertical markets have an easier time with lead generation, general practitioner MSPs often have difficulty finding or knowing where to find customers. "MSPs tend to get into ruts or gray areas in terms of finding good pockets of customers," he said.
Technology business development tips
- Do the networking legwork, finding prospects through professional organizations, discussion forums, LinkedIn and the like.
- Raise your public profile by attending conferences, taking on speaking engagements and writing for trade publications.
- Create marketing content that contains information your prospects will find valuable.
- Make sure your salespeople understand the prospect's business and how your solution can solve a problem for them.
- Ask for referrals.
It doesn't help that MSPs go by a number of different names. When someone has a toothache, they know to call a dentist, Weaver explained. But, he said, when a corporate network is sluggish and users can't get their work done, whom does the IT admin call? The boss' son who is majoring in computer science? The guy across the street?
"There's no commonality in terms of what we call ourselves, and we've been too ready to change our naming convention," Weaver said. "The second obstacle is building trust before agreements are signed. It's a trust relationship, and it's hard to develop that trust very quickly."
Building trust is key to a technology business development plan
Kevin McDonald, executive vice president and director of compliance practices for Alvaka Networks Inc., an MSP based in Irvine, Calif., echoed these challenges. "There's a lot of pretenders and a lot of people using language that is not accurate to who they really are, and yet that's what many potential clients are seeking. You either have to be the loudest person in the room through marketing or have some guerilla tactics to [rise] above the noise and exaggerations and claims of vendors and VARs not delivering what they say they are," said McDonald, who periodically writes for SearchITChannel. "My biggest challenge is perception. When we get into a conversation about reality, we almost always win."
Building trust by sharing your expertise and conveying your message honestly and openly is key for any channel business, be it a service provider or value-added reseller.
"[The way to win new business] is [through] a combination of networking groups, talking to your own business connections, online research, looking at discussion boards and LinkedIn profiles, and seeing how you know people and how you can interact with them in different ways," said Peter Sclafani, chief information officer of 6connect Inc., which is based in San Francisco. Networking at conferences, public-speaking engagements, writing for publications and press interviews also offer opportunities for building that trust.
"When you do a lot of public-speaking events and things like that where you're put in front of the room as an expert, it disallows other people from having that conversation," McDonald said. "Anyone else sending a flyer or making a cold call doesn't have a chance."
A different approach to sales and marketing
Buying behavior has changed, but that presents an opportunity for channel businesses. "Studies show that buyers consume eight to 10 pieces of information before they even entertain a meeting," said Rich Young, marketing director for eGroup, a solution provider based in Mount Pleasant, S.C. VARs and service providers can use their marketing collateral, such as data sheets and white papers, to generate leads and build trust with prospects, he said.
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One caveat: Avoid the temptation of leading marketing communications with the manufacturer's brand as opposed to your own. "You think it's great because all you have to do is slap your logo on a piece of collateral, and you move on. It's like a sugar fix. It feels great at the moment, but what is that going to do for your brand down the road? How does that differentiate you from your competitor?" said Young, who also periodically writes for SearchITChannel.
Sclafani said his company focuses on creating content that reflects 6connect's approach and demonstrates value. "If you can provide some actionable items and how you can help, it goes a lot further," he said. "Most people can see through the cheesy marketing stuff, so it helps to put the extra effort in if you can."
While marketing publishes valuable thought leadership content, sales must understand its role in the new purchasing process. "Sales people have to understand that they have to help the buyer succeed before they say, 'eGroup, I'll hire you for a three-month deployment,'" Young said.
To help the buyer succeed, sales must also educate themselves on the prospect. According to Sclafani, the sales team needs to understand a prospect's business to ensure that the product or service that's being pitched is appropriate. "Get out of the transactional mindset and focus on what can we help with, what can we fix, and how … my solution my company provides [fits] into it," he advised.
The power of referrals
Finally, when establishing a technology business development plan, consider word of mouth and more formal referrals. Weaver and other sources emphasize the business opportunities that can be born out of the trust channel businesses have already established. A referral program, such as the one Alvaka Networks has in place, can take a lot of the legwork out of finding new clients. According to McDonald, Alvaka pays organizations a percentage of the revenue from the deals they refer. This incentive, along with consistent service, can provide channel companies a healthy stream of new business. "Our retention rate as a company is somewhere in the 98% range. We don't lose clients for failing to deliver," McDonald said. "We have a good reputation. We come in and do what [we say] we're going to do."
Weaver offers this advice: "Take your current install base and say, 'If you trust us enough to manage your IT for you, then would you be willing to extend that and make a referral or an introduction to people that you know when the opportunity comes up?'" he said. "It starts with you having to ask."
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