Dave Sobel is the host of the podcast "The Business of Tech" and co-host of the podcast "Killing IT." In addition, he wrote Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business.
This week, Sobel offers his thoughts about whether MSP customers really care about the brands that the MSP uses to provide their services. Would they select a different managed service provider because you partner with HPE over Cisco?
Transcript follows below
This week, a question from a Patreon supporter: "Do customers care about brands anymore besides maybe Apple or Microsoft? My position is the MSP should provide a good outcome and should change their product mix as old threats evolve and new threat emerge. So, do clients care about HPE vs Cisco or SentinelOne vs Carbon Black? They should stay agile and not locked into products because a brand 'helped close the deal.'"
It's a great question. First, do brands matter? The data is absolutely in favor of the fact they do for a buyer. The answer is yes. They do -- brands are the messaging that sticks with your customers and potential customers.
- 81% of consumers said that they need to be able to trust the brand in order to buy from them
- 86% of consumers say that authenticity is a key factor when deciding what brands they like and support
- 66% of consumers think transparency is one of the most attractive qualities in a brand
- 73% of consumers cite customer experience as an important factor in their purchasing decisions
That said, the question is about the second level -- does a customer care about the brands beyond the provider's brand? The answer. No. Not really.
Brands matter to the buyers, not as much to their customers
Let's think about the other scenarios where this might apply. If you buy a car, do you care about the components that make up the car? Who makes the muffler, or the transmission or the tires? You might care about the tires. If you go to a restaurant and buy a meal, do you care where the meat came from? How about the lettuce? Maybe the wine. You might care about that. I usually do.
But even in the cases of the tires, or the wine, would you not buy the car or eat at the restaurant because of the parts? No. Not really.
How about if the sommelier tells you that the wine you wanted was switched? You would go for the swap, right? That even applies after you drank one -- if the restaurant runs out of a wine, you'll take the recommendation. That's true even if you come back -- it may have been there, but even if it isn't later, you'll take the new recommendation.
This isn't how people buy. When something is offered as a package, the sum is greater than the parts, and more importantly you are trusting the assembler. This is particularly true when it comes to services. If I hire someone to manage my lawn, I don't really care what the chemicals used on the grass are nor the kind of hose used.
This is true in so many industries. Painters, woodworkers, car repair, exterminators -- anything where the service and expertise is what you have purchased, you don't care very much about the products within the service. You've bought their expertise.
The question does call out two specifics, Apple or Microsoft. Why do we think they might matter? There's actually a reason here -- it's due to the overlap between personal and business. For Apple, your phone is a very personal experience. It's a defining part of your life, and it's a consumer decision. Microsoft is a company that has the same element -- as a consumer, you have a relationship with them for your home computer and in your personal life. (I'm clearly a gamer -- I have an Xbox. That's Microsoft).
Those are business-to-consumer product relationships, and so yes, they are different. An individual will make a brand decision on that purchase based on that brand relationship, and it does cross into the world of business because of the use of that technology for work as well. I would agree those relationships matter, too.
I also want to note a brand "helping to close the deal." Let's differentiate between actual assistance from a vendor in the sales process, through sales support, marketing development funds or efforts or pre-sales technical support from the idea of the brand value. The smaller the vendor, the far less likely that an end customer is even aware of the options.
Again, think to your own purchases. You might know Goodyear for tires, right, but how many tire manufacturers do you know? Firestone, Michelin . . . Mastercraft? Pirelli? Yokohama? Cooper? Titan? And how much do you care?
There are specialty areas where this breaks down. You're a race car driver? You care about the kind of tire in a completely different way. Specialization matters . . . although even in this case, you are still going to rely on your experts. Never forget that.
Exception: One area where the product brand often matters
I've made one massive assumption here in this presentation. I'm assuming a service provider that is focused on business value. This equation is entirely different if you are a retail-focused organization where variety of stock might matter or a distributor who is focused on ensuring a stock for a supply chain. If you are a retail repair business, your equation looks a lot different, so I wanted to acknowledge that.
Brands for solution providers
Ultimately, services companies are selling trust. Related to the first question, the same Patreon supporter asked, "Do prospects genuinely care about our corporate social positions or is still price and value perceived?"
Do I think that social positions will make price and value irrelevant? No. Do I think they matter? Yes. Buyers are people. People require trust, and social positions do build trust. Communities build trust via common goals, ideals and ethics, and thus customers do care.
You cannot trade just on your social positions. If your value or price is out of alignment with the market, you are likely to struggle. I'd offer that the question asks, "This or That." It's not an or. It's an and. Prospects genuinely care about value, price and social positions. From a November 2019 Gartner report on branding:
- 64% of consumers around the world said that they would buy from a brand or boycott it solely because of its position on a social or political issue
- 77% of consumers buy from brands that share the same values as they do
That pulls your brand together. Your brand is so more than just your logo or colors. It's how you are perceived by others.
I'd be remiss if I didn't make specific recommendations, so I will do that. First, understand your own brand. It should be simple, concise and clear. Ensure it's consistent. Second, continually ensure it is everywhere. Who are you in every place you interact with your customers? And finally, be authentic. The easiest brand to be is when it is exactly who you say you are.
As for me, I'm going to be an independent voice for technology services companies.
About the author
Dave Sobel is the host of the podcast "The Business of Tech," co-host of the podcast "Killing IT" and authored the book Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business. He owned and operated an IT solution provider and MSP for more than a decade, and has worked for vendors such as Level Platforms, GFI, LOGICnow and SolarWinds, leading community, event, marketing, and product strategies, as well as M&A activities. Sobel has received multiple industry recognitions, including CRN Channel Chief, CRN UK A-List, Channel Futures Circle of Excellence winner, Channel Pro's 20/20 Visionaries and MSPmentor 250.