IT Solution Providers in the channel have a number of unique marketing challenges. They have the same challenges that other B2B businesses face, from brand positioning to demand generation, but they’re compounded by the complexity of the channel ecosystems in which they operate. They’re also subject to a relentless pace of market disruption that continually redefines their market—a pace that has picked up dramatically in the past decade and only seems to keep accelerating.
Every day we work with VARs, MSPs and other IT Solution Providers in the channel industry, delivering MDF social marketing and sales programs for sponsoring OEMs. We see the same marketing struggles and the same operational pitfalls replicated every day, but one pitfall above all others persists in the channel.
It All Starts With a Clear Value Proposition and Meaningful Differentiation
Lack of a clear value proposition and meaningful differentiation is by far the most frequent challenge we see holding resellers and solution providers back from reaching the next stage in business growth. We see hundreds of resellers and solution providers today that still position themselves as generic “Enterprise IT” or “Cloud” companies—every one of them claiming the same unique differentiation of industry experience and high quality customer service.
Many of these businesses have been highly successful resellers in the past, some with revenues in the 10s of millions of dollars. But they didn’t have much use for fluffy marketing during the decades they enjoyed high demand for the boxes they moved, and many still don’t appreciate the marketing commitment it will take to get back to the front of today’s pack.
The problem for generic IT providers is that OEMs are actively shifting investment from box movers to service providers, and weeding out resellers that aren’t able to transform. Margins on equipment sales are being squeezed, competition for OEM co-marketing dollars is growing, and the innovation resellers need to transform seems in short supply.
This is the new reality for all resellers and service providers: Specialization is growing by leaps and bounds, making competitive bids a shootout with one or more highly targeted solution providers.
Why Clear Positioning and Differentiation Matter More than Ever
Imagine you’re an IT buyer at a small healthcare network, and you’ve seen one of your peers taken down by a ransomware attack. You start looking for solution providers who can help you assess your own vulnerability, starting with a lookup on Google.
One company that comes up in your search is the local networking company you’ve been using for years, the company that installed your phone system, set up your file server and configured your wifi. No doubt you’ll give them a call. But then you notice other solution providers that cater to healthcare IT, and not just the healthcare industry at large, but clinics like yours, with a specialty in cybersecurity and HIPAA-compliant cloud solutions. Chances are you’re going to immediately start looking at the gap between the specific details a specialist can help you understand and address in your business, and the generic information provided by your general IT provider.
Now, you may still wind up staying with your old provider, particularly if they can answer your concerns directly and close the information gap with the healthcare IT firm. But this is the new reality for all resellers and service providers. Specialization is growing by leaps and bounds, making competitive bids a shootout with one or more highly targeted solution providers. Some of these specialists are long-time resellers that have repositioned to target a specific market, but we’re also seeing a growing number of venture-backed solution providers entering the channel, particularly in markets like healthcare, education, security and finance.
We see the most obvious warning signal for generic IT solution providers in our advertising work, where we constantly run A/B tests on every image and message. In nearly every case, a more specific message clearly beats a more generic message. Ads about “Cloud Migration” perform better than ads about “Cloud Services”. Ads about “Cloud Migration for Healthcare” perform better than ads about “Cloud Migration”. The closer you can get in your positioning and messaging to a specific target audience and a specific need, the better your message will resonate with buyers looking for someone that understands their business challenge.
It is essential that buyers see their business reflected in the way you talk about your services, rather than a one-size-fits-all solution for generic IT problems.
Why Some Partners Refuse to Change
The objection we hear most often to increasingly focused targeting is that channel partners don’t want to risk losing prospects in markets they stop targeting. There are two answers that objection. First, if you’ve identified the right market, and it’s a match with your capabilities, you should be in a position to grow with a more narrowly defined space. But that’s a risk that requires some serious due diligence and investment. If that’s not in the cards, there’s still an effective approach that’s better than generic positioning.
If you can’t choose one target market, choose a few, add an “Industries” section to your website, and explain in detail how you understand the unique problems businesses face in each industry, and how you have solved them. It is essential that buyers see their business reflected in the way you talk about your services, rather than a one-size-fits-all solution for generic IT problems.
Another reason traditional resellers won’t change is the cost and effort of targeting niche industries. First you have to change your website, then you have create and maintain content, maybe hire new talent that can sell into these niches more effectively. Pretty soon the way you’ve always been doing things looks just fine to the CEO. Maybe you can just target those niche industries more closely in sales calls without the time and effort of building segmentation into your marketing approach.
The problem with that strategy is that no matter where you meet your new prospects—on a phone call, on a LinkedIn connection, at an event—there’s an overwhelming probability they’re going to visit your website to validate the smart things you said about their segment. When they arrive at your site and get nothing but generic IT messaging, the first thing they’ll do is make sure they got the name of the company and web address right. That disconnect is hard to overcome, and totally unnecessary.
We see programs funded every day for building partner landing pages, marketing content, social selling campaigns and promotions—all the things you’d have to do to segment effectively.
Using Your MDF or Co-op Funds to Improve Positioning
The good news, particularly for established resellers trying to upgrade their positioning as a service providers, is that MDF dollars are available from many OEMs that will cover most efforts to improve positioning and niche sales. You just have to be smart about it. Millions of dollars of MDF and Co-op funds go unspent every year, often because resellers don’t want to run the requisite campaign, don’t want to jump through the flaming hoops of form filling for compliance, or simply aren’t aware funds are available to help.
The way to go about it is to talk to your partner manager at the OEMs you represent, and find out where they’re investing in partners for new solutions and services. Almost every OEM has a few strategic areas where they need help from partners to generate lift. Find an OEM with a strategic target that addresses a market you already serve, one with MDF already budgeted to move the needle this quarter, and request support to focus your resources on addressing that opportunity.
You may have to put some skin in the game first by adding a page to your website that speaks to that solution, but we see programs funded every day for building partner landing pages, marketing content, social selling campaigns and promotions—all the things you’d have to do to segment effectively. Sure, you’ll have file some forms and cobrand everything while you’re running the campaign, but it’s a great way to start navigating the difficult path of positioning and market testing segmentation at a very low cost, and you should be able to pick up good ideas from the agencies that execute your MDF program.
Just make sure you do some due diligence on the segments you want to target, and you can articulate a plan for how you’re going to sell into that space. OEMs are eager to engage with smart partners that are hungry to innovate. They’re much less interested in engaging with partners holding out a tin cup for MDF without having put any thought into why and how they want to improve their positioning and market approach.