Technical Acumen No Longer Enough

Carolyn AprilBy Carolyn April

The tech industry always has been about building a better mousetrap. Vendors engaged in nonstop product improvement, locked in a constant state of one-upmanship, while IT channel firms assiduously select vendor tools and products to create solutions they hope exceed the sum of its parts.

But as the industry shifts toward services, the better mousetrap or best-combined solution won’t always ensure success. Channel companies wanting to outshine their competitors or reap the benefits of a recurring revenue model need the requisite sales and marketing skills to mirror their technical proficiency.

CompTIA’s 4th Annual State of the Channel report, released in October, looks at how new business models — think managed services and cloud — are impacting channel firms’ sales and marketing efforts. According to the report, the impact is widespread. Roughly eight in 10 channel firms said their sales and marketing operations are slated for some degree of change in the next two years, including more than a third planning major overhaul.

Solution providers start businesses because they are good at technology and passionate about it. Sales techniques, meanwhile, are often learned on the job and marketing is a complete afterthought. The typical channel firm with $1 million in revenue and 10 or fewer employees is a rare bird these days if they have a dedicated marketing professional. But with IT channels moving into services — cloud, managed and professional — partners are positioning less around their vendors’ brands, making marketing more strategic.

CompTIA’s survey found partners place a priority on the following activities:

  • Learning to sell to the non-IT line-of-business buyer. LoB buyers increasingly have a seat at the table in making technology purchases. Selling to the vice president of marketing is a very different type of sales conversation, for example. Channel firms cited learning  to sell to LoB customers as the No. 1 “major factor” driving them to overhaul their sales and marketing efforts. Forty-four percent of respondents cited this as a primary catalyst.
  • Training and/or hiring sales reps to sell consultatively and to focus on services and business outcomes for the customer. A net 74 percent of channel firms have added to their sales forces in the past 12 months, while nearly as many (72 percent) have taken on additional marketing reps. Also trending: hiring sales reps from outside the tech world. A net two-thirds of all channel firms did so in the last year, including 37 percent of the largest in size. This dynamic is proving that a technology background is not de rigueur for sales rep success in today’s services-oriented industry.
  • Retooling internal sales processes, sales team structures and compensation plans/incentives to fit a recurring revenue model. Three in 10 of the largest firms expect complexity to escalate dramatically as they dive in; most likely because they will maintain a hybrid practice of product, project and recurring revenue sales and will need the requisite sales teams and processes in place.
  • Upping the game around marketing and self-branding, including the use of social media to acquire new business. Social media is cited as the No. 1 activity that channel firms expect to leverage as part of their efforts to polish their marketing approach in the coming year. Social media is an avenue to promote the brand and services, and serves as a communications tool to reach existing customers and a demand generation engine to find new ones. More than four in 10 companies expect to accelerate social media activities to reach customers, drum up new business and promote themselves. Their goal: to position themselves as skillful, unique providers of technology services rather than simply product resellers.

Carolyn April is senior director of industry analysis for CompTIA , the IT industry association. Previously, she was editor for Channel Insider, principal analyst for the Institute for the Partner Education & Development (IPED), executive editor of VARBusiness and editor at Redmond Magazine.
Twitter: @carolynaapril

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