Hitting the sweet spot in 2011
Phil Jones says the challenge next year could be getting the right market information needed to grow sales
This year has been hard, but those of us already planning for 2011 are predicting further challenging times for UK resellers. There is a combination of economic and financial factors that could spell disaster for business plans for the year ahead if the channel fails to prepare.
Repercussions of the public spending cuts announced in October will start to hit in the New Year – and those resellers who have previously enjoyed a consistent revenue stream from public organisations may well find their customers forced to reduce or even freeze their IT procurement.
We may also be heading for another wobble in trade insurance confidence. Eighteen months ago, we saw the channel paralysed as insurers chopped and changed their cover on a weekly basis – cover was reduced, credit was squeezed and sales pipelines grew stagnant as companies weighed up the consequences of working with so-called "high risk" partners.
The channel has now managed to work back towards pre-crisis conditions and trading has been steady recently. However, if the rumours I hear are to be believed, insurers are feeling nervous again, particularly when it comes to companies with high exposure to the public sector.
But all is not lost. There are specific market sweet spots that are still showing growth and a propensity to invest in technology to improve business efficiencies. So those resellers who take an intelligence-led approach to their sales strategies should prosper.
Resellers need to adopt a strategy that focuses on finding "solvent demand" within a market – such as private sector businesses with minimal exposure to the public sector cuts, that will remain financially strong and continue to grow. Resellers can expect to face tough competition for these customers, though.
It is no longer a matter of collating information but using intelligence to establish solvent demand.
One way to do this is to get a wider picture of the market and its sales patterns. Working with manufacturers can provide a unique insight, in my opinion, which could be a crucial element in 2011 planning.
Which companies buy which products? How old are they? What sectors do they work in? The data can highlight over- and under-indexing of products within a particular sector, which can then be used to map out where efforts need to focus.
Some vendors are able to provide this level of sales data to key reseller partners to enable them to identify the local and vertical sweet spots that they can target specifically, rather than having to use the same information as everyone else in the channel.
Vendors should be able to map out which customers buy which products, penetration rates by industry sector, and buying propensity by age or location. It is all about getting two steps ahead to secure sales, and build a longer-term partnership with customers as they continue to grow.
Phil Jones is sales and marketing director at Brother UK