Over the last few years,managed services has evolved into a mainstream solution for businesses large and small. According to various industry estimates, more than 90 percent of organizations now use some type of cloud services, including software as a service (SaaS) and infrastructure as a service (IaaS). In almost every instance, these firms achieve significant gains related to costs, flexibility, and scalability. "The challenge that channel pros face is how to move to a recurring revenue model and market managed services," says Luis Alvarez, president and CEO of Alvarez Technology Group Inc., a Salinas, Calif., IT services firm.
It's no small endeavor. Amid a fast-changing business and IT environment, many channel pros continue to market and sell technology the old-fashioned way—component by component—rather than building a framework for incorporating cloud services. "Many channel firms overlook the fact that there is enormous demand for managed services, and businesses are eager to find a channel partner that has the knowledge and skills to unlock the full value of the technology," observes Kevin Goodman, director of channel strategy and marketing at NTT America, a New York-based provider of ICT solutions.
To be sure, few channel pros enter the IT business because they love sales and marketing. However, fewer still succeed in business without designing a strategy and structure for promoting their services. As computing models evolve and subscription-based and on-demand services become the norm, channel pros must adapt their marketing strategies accordingly. Gaining exposure in the marketplace, building a brand, developing relationships, and delivering results are all critical. "The best channel pros understand that an effective marketing campaign helps them stand out in an increasingly crowded marketplace," Goodman says.
A New Era Emerges
Navigating this environment is nothing short of challenging. Says Keith Lubner, managing partner at Philadelphia-based IT advisory firm Channel Consulting Corp., "Today's technology introduces huge challenges for channel pros. Buyers are armed with more information than ever about pricing, tools, technologies, and configurations. They're smarter about technology and they can change vendors or channel partners quickly and relatively effortlessly. Channel pros cannot conduct business as usual." The upshot? It’s critical to move beyond selling specific products and features and instead focus on how to boost growth and profits.
Within this new order, channel pros can add value by connecting all the dots, creating a business framework for information technology, and delivering consulting-type services that help clients improve processes and get better results. But building a new and different organization—one focused on consultative and value-added services rather than transactional sales—is only half the battle. "It's no longer about selling products, features, and upgrades; it's about understanding a user's needs in a fundamental way and helping them run their business more effectively and at a lower cost," says Gary Pica, president of TruMethods LLC, a consulting firm that specializes in MSPs in Moorestown, N.J. "You want to be known as the company that sells chocolate cake rather than individual ingredients."
One of the biggest problems channel pros face, Pica says, is they fail to develop a focused and overarching strategy for marketing and sales. Unfortunately, many firms have no specific person assigned to marketing tasks, and business leaders in other departments or functional areas frequently lack the expertise to develop and execute marketing and sales plans. Making matters worse, many executives wind up buried under daily events and perpetually push off marketing plans until the next quarter or year. At some point, "The idea of tackling marketing becomes so overwhelming and onerous that it never happens," Alvarez says. As a result, channel pros wind up ignoring crucial marketing issues or doing so in a totally disjointed and haphazard way.
In addition, many executives scoff at the idea of hiring an outside marketing consultant—and they also balk at the cost. In reality, Goodman says, "A channel firm must have a comprehensive view of the industry rather than a limited view from the inside out. At the same time, it's important to understand how marketing tools fit together and work in a complementary way to build a brand and a business." Just as a channel firm presumably delivers IT expertise that a client lacks or doesn't have time and resources to tackle, a marketing expert can focus dollars and energy in a positive way across multiple channels and delivery methods.
Alvarez Technology Group is among the believers. It relies on an outside marketing consultant to help guide its strategy and manage the company's website, blog posts, Facebook page, press releases, media inquiries, and other tasks, including developing case studies that showcase the firm's expertise. "For approximately $500 per month it's a bargain compared to the cost of employing a full-time marketing person," Alvarez explains. "It ensures that we take a consistent approach, maximize our opportunities, and build a consistent brand experience so that we present ourselves as genuine experts and authorities."