The IT channel has traditionally been strong on areas such as operations and logistics, a carryover from the hardware legacy days perhaps. However, as the surrounding business environment has digitized, so the emphasis on these skills has fallen away somewhat.
In order to move with the times, channel businesses are needing to acquire digital skills. Cloud, direct vendor engagement, smaller margins and increased competition are all putting the squeeze on the channel, and forcing intermediaries to pay more attention to their own marketing.
And although some businesses have made the transition relatively seamlessly, many others haven’t grasped the marketing function very well or even at all, relying on existing customer relationships and shying away from marketing to customer target markets.
The channel on average is “very, very bad at sales and marketing,” observed Terry Hedden, CEO of IT sales and marketing company Marketopia, in an article published on the TechTarget website. “They are good at selling to existing customers — but bad at selling to other customers.”
“Vendors invest a great deal of money to generate demand for resellers — which is the right thing to do — but the way they are doing it is wrong”, he adds. “Resellers are very often not skilled in marketing or demand generation and thus waste a great deal of money and fail to produce a defined ROI (return on investment) for the vendors.”
“The channel is bad at sales and marketing. Businesses are good at selling to existing customers – but bad at selling to other customers.”
“The industry has for so long been dependent on the vendor to provide the marketing budget” because resellers and value-added resellers “have zero for marketing budgets,” says Hedden. “It is to the point where, frankly, it’s like an addiction in the industry. If a vendor all of a sudden cut off [its] marketing budget, resellers would be struggling, because they have zero form of lead generation.” In the meantime, he said, “resellers are going to take advantage [of vendor marketing resources] as long as they can.”
Stanley Louissaint, president of Fluid Designs Inc. agrees. He says that while securing market development funding (MDF) should be helpful in supporting marketing strategy development, the process required to secure these funds take a lot of time and effort and the money is tied to a set of requirements that may not always be beneficial to his company.
“Having to go out there and find marketing development funds takes a lot of work,” Louissaint said. “Another problem is once you find MDF dollars you discover a lot of manufacturers have limitations on what you can do. They don’t necessarily support every marketing idea you have to use those funds.”
Channel businesses which have decided to make a commitment to, own and master their own marketing function are finding that there’s a multitude of options available to them.
“The growing use of YouTube, Facebook and other social media marketing outlets, along with the rising importance of blogs, content marketing, case studies and webinars have joined the more traditional marketing approaches such as networking at trade shows, lunch and learns, telemarketing campaigns and direct mail outreach as formidable ways to reach new clients” writes Nicole Lewis in another article on TechTarget.
Channel intermediaries who are making the necessary investments in marketing are seeing the benefits.
“I am seeing the best-of-breed service providers using a combination of everything to get their marketing message across,” said Stuart Crawford, CEO at Ulistic LP, a Buffalo, N.Y.-based marketing firm that represents managed service providers (MSPs), in the same article.
“Companies are using lunch and learns, virtual seminars, trade show and speaking engagements with executives in various vertical sectors, but they are also getting engaged on social media sites like LinkedIn, Facebook and Twitter to get their message across.”
For big distributors and resellers who deal with many different vendors and their various product lines, it can be difficult to get specific and targeted in their marketing activities due to the sheer depth and volume of product which they distribute. Not only do they need to become proficient in the fast-moving world of digital marketing, but they also need to keep up with the technology of the vendor products which they’re on-selling, understand them and their target markets, and become confident in marketing them to their customers using the correct channels.
Nevertheless, channel intermediaries who are making the necessary investments in marketing are seeing the benefits, as they win new business and lure customers from channel businesses which are locked into their existing customer base, and not willing or able to engage with potential external customers.
Effective tag management enables the platform user to allocate specific and user-defined properties to each customer, laying the groundwork for better understanding and engagement.
ChannelCenter acknowledges the difficulties of initiating and coordinating the marketing function for channel businesses, and consequently offers an integrated tag management and bulk emailing system within the platform to enable businesses to better get a handle on their marketing activities.
Effective tag management enables the platform user to allocate specific and user-defined properties to each customer, laying the groundwork for better understanding and engagement. The ChannelCenter bulk emailing system then allows users to target audiences with customized messaging according to the pre-defined tag allocation. Powerful insights are created via the platform’s reporting capabilities, giving the user a useful ally in achieving channel business marketing objectives.
Crawford sums it up: “At the end of the day, no matter what tools you use to convey your message, effective marketing still involves talking to the client about how to achieve their business objectives and business targets, and that hasn’t changed.”