CompTIA: Recession Forces Solution Providers To Rethink Customer Focus

Solution providers (SPs) certainly took a sizable hit from the recession, but have fought back by focusing  on existing customer relationships, turning more to social media for marketing, and investing more strategically in new products and services, according to a survey from CompTIA and Channel Force.

Not surprisingly, more than 75 percent of the VARS, MSPs and SPs who participated said the recession impacted their business either significantly or moderately, as customer technology spending either ceased altogether or was limited to a few, mission-critical purchases.

Surprisingly, though, most solution providers (72 percent) managed to maintain their usual quota of sales visits, but many adjusted their overall marketing approach. Sixty-five percent downsized their traditional broad sales and marketing campaigns, opting for more customer face-time through one-to-one visits.  Some companies sent specific customer invitations to marketing events or brought vendor reps along on sales calls to shake things up.

SPs also re-evaluated their business models to maximize shrinking revenues. Some moved to more of a maintenance and services delivery approach instead of pursuing product sales, while others tried to free up customer spending by offering pricing and leasing options. Throughout this period, though, about two-thirds of respondents continued to invest in their company in one way or another. Even more surprisingly, 77 percent reported they managed this without layoffs, although about half that number werent hiring either during that period.

Catering aggressively to existing customers helped offset the slowdown in net new business, said Carolyn April, director, industry analysis at CompTIA. In a down economy, continued investment is critical to future success. Companies that tread water waiting for the recovery to happen will find themselves well behind those competitors that, despite the tough economy, kept putting dollars into exploring new technology offerings and vertical markets and did not stop marketing aggressively.

But the survey, called Weathering the Recession: How Solution Providers Coped also found lingering concerns and skepticism over the health of the economy, citing a comment from the president of a large IT services staffing company who expects the recession to drag on for at least another six to nine months, further limiting customer IT spending.

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