Marketing is an area in which resellers are notoriously bad. But whyoverlook the opportunity to promote their company to the world at large. So how can they make the most of the marketing business? should they engage in any marketing at all? Will it get them anywhere and what happens if they don't do any? How much should they spend and on what? Should their marketing focus on the local geographic area or on particular markets? Can resellers rely solely on referrals and how can a successful marketing campaign be measured?
Paul Jordan, sales and marketing director at networking reseller P&P Installations, is probably typical of most senior reseller staff who, at some time or another, have had to think about marketing their business.
P&P is a pounds 2 million company that has reached its position through a combination of a loyal customer base, quality services and products, and business generated almost entirely by a permanent telesales team.
'To expand the business further we decided that we needed to look at increasing our marketing,' Jordan says. 'The problem was that there was no budget available and no specific marketing skills within the organisation.' For many small businesses, this is often the case.
But marketing is not only important for the corporate market, it can also be crucial when targeting the SME sector. Recent IDC research showed that after friends and business associates, resellers were the second biggest influence on SMEs' decisions when buying IT. Resellers have a lot to gain by marketing themselves.
Paul Hunt, divisional manager for enterprise systems at software house and systems integrator CCAT, says if resellers want to get anywhere, good marketing is essential. 'The firms at the top didn't get where they are without strong marketing,' he argues. 'In fact, there is a strong case for saying marketing is exactly why they are where they are. Everyone starts out small, but if you look at truly successful companies, marketing has played a huge part in their success. How about Microsoft? It didn't get where it is just on the back of its products, did it?'
But Tim Beadle, director of marketing consultancy PCMC, believes most resellers don't think about marketing. 'We have been involved in a large number of initiatives that have aimed to help smaller dealers market themselves in conjunction with support from vendors. The problem is that most small resellers do not have a strategy and tend to grasp at any idea in the hope that it will result in a stampede of customers beating a path to their door.'
This is more the pity, he adds, because there is nothing terribly complicated about marketing - it's really just common sense. 'There are three things that matter in business,' Howard Hughes observed. 'Location, location and location.' He didn't just mean geographic location, Beadle explains, it's also about where businesses are in the market and when. In other words, they have to decide what kind of reseller they want to be, then see where they are in relation to the competition and then determine what they need to do to beat them. Once a plan is in place, the marketing campaign can begin.
Unfortunately, he says, almost everyone does it the other way round.
'That's why marketing for most resellers is a waste of money - their marketing almost never fits with their business strategy because they haven't set out their strategy in advance. Instead, what happens is that 80 per cent of the business is won by a handful of salespeople - perhaps only one or two of them - who are working to their own ad hoc strategy. The rest of the business just follows along.'
How then, do resellers succeed in marketing where others have failed?
First of all, says Hunt, a small reseller must identify exactly who it wants to sell to and what its proposition is. Segmenting the audience is key to being effective with limited resources. The task for dealers is to get themselves on the shopping list. 'It may be lucky and get lots of referrals, but how can a company build a long-term business plan based on that?' Hunt points out.
Another way to progress without spending too much, he adds, is to piggy-back on someone else's campaign - a vendor, distributor or even another reseller or local business. This is not always as easy as it seems, although there are plenty of willing partners out there.
Simon Welch, marketing manager at ICL Multivendor Computer (ICLMC) - formerly known as Tplc - says a lot of smaller resellers need assistance with marketing and there are many distributors and vendors only too eager to help. Of course, they all want more business from dealers, but many may be able to help with the real tasks involved in marketing - the key is focus.
At ICLMC, for example, the distribution operation has a nine-strong marketing team 'whose purpose is to work with our resellers to sell equipment from Sun Microsystems', says Welch. 'Some of our resellers have the luxury of their own marketing people, but many of our smaller dealers don't and it is our job to help them.
'We assist with the formulation and delivery of quality marketing plans,' he adds. 'Our close relationship with Sun's marketing team, in terms of both product and promotions, also enables us to give our smaller resellers the look and feel of a much larger company.'
ICLMC also acts as a steward for Sun's co-op marketing funds and can authorise marketing spending. But even with the distributor in control, co-op funding is never easy to obtain. The supplier always wants to see a return on investment and most schemes work on a 50:50 funding basis.
It is easy to understand why suppliers are careful about choosing who to fund, says Welch, but being careful works best for everyone. 'We ensure our resellers don't make the wrong decisions because a misdirected promotional message is worse than expensive - it's wasted. But if dealers hit the target with the right message through the right channel, their investment will be repaid many times over.'
But many vendors and their distributors, although keen to fund marketing that promotes their products, are not always willing to fund schemes that simply raise the profile of the dealership within its target market - especially not if the campaign depicts the reseller as a general systems provider with cross-platform expertise.
The bottom line is that vendors and distributors can't do it all for dealers. Resellers have to have their own marketing plan that follows their own agenda. This is particularly true if they have a local focus - they need to think about the level of awareness of their business that exists locally. That's all marketing is - making sure the people who need to know about a business and its capabilities do know.
A little carefully planned PR work can be useful too, particularly if a reseller operates on a local basis. Getting a chance to speak at trade association events or the local chamber of commerce can bring useful exposure, says Hunt. Such events may be time consuming and may not bear fruit immediately, but do enough of them and a company's name will become known.
This can also be true of the local and wider media. Local press is often only too grateful to be given objective copy about issues that affect IT, and journalists from the specialist media - whether it is the IT press or the trade press - are always eager to hear from real IT people. Maybe a feature article in The Economist is too much to be expected, but companies should make themselves available to the relevant press.
Many people are nervous about talking to the press and if they do put themselves in the spotlight, it's advisable to get some media training, says Hunt. 'Understanding how the press works and being able to give them what they want can create outstanding results in raising awareness within the target market. Resellers don't necessarily need an expensive PR agency to help them get coverage, although some help can be useful. A well-targeted and executed marketing programme will give them a jump on the competition.'
But that kind of marketing is best undertaken by senior staff and in many small dealer businesses, time is simply not available. Jordan discovered this when P&P found it needed to increase its profile. But when the company began marketing itself in earnest, it did get one thing right from the start - customer data. It invested in a database to help it manage contacts.
'Without good foundations, a business cannot build anything solid,' Jordan says.
P&P was able to expand its database at a rate of about 300 entries a week using a small telesales team. After it had 1,000 names on the database, it sent out a simple mailshot. 'The objective was to increase awareness of P&P, so our name was familiar to the user when we contacted them to sell a low-cost hub.'
P&P was reasonably successful in achieving its first objective - getting more name recognition in its target customer base - but it did not sell any more products. 'We learnt a useful lesson,' Jordan says. 'We supply high-level network systems, yet our mailshot was selling a low-cost hub.
This was not the message we should have put across to the user.'
The point is simple and is made time and again by marketing experts - focus is essential. It is too early to say how well the changes P&P has made to its mailshots have gone, but Jordan feels more confident. 'They focus on an area that is much closer to those in which we are successful and it ties in with our telesales message.' Another thing P&P learnt was that it makes sense to get help from channel partners: 'It was useful to talk to people who knew more about marketing than us,' he adds.
P&P worked closely with distributor Equinox on the next stage of its marketing. Jordan is enthusiastic about the prospects. 'We are putting together a strategy to target the education sector. We were able to have third-party input into the campaign and also funding from both Equinox and Extreme.'
Jordan admits it is hard to say whether this activity is having any real effect yet. But what he does know is that the business is coming in and more marketing is essential.
'We are losing very few deals that we are involved in, but to expand the business we need to find more opportunities and this can only be achieved by increasing our marketing,' he says.
'Are we being successful? Ask me in six months' time. One thing is certain, we will work to a strategy and keep developing and improving what we are doing to ensure that success is inevitable.'
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