- February 9, 2017
- Posted by: admin
- Category: Strategy and Trends
Vendors have an incredible partnering opportunity too!
The small business market is the prime target for MSP’s and IT Vendors who are committed to growth. IDC and Gartner suggest that SMB (less than 1,000) employees account for almost half of the worldwide IT spending. These estimates represent approximately $150B in annual IT revenues in the U.S.
To sell and support the SMB clients, IT Vendors need to rely on the IT Channel as orchestrated by the MSP. In turn, MSP’s need to have the pulse and respect of the SMB owner. The energy flow of the selling and supply chains flow from the end client through the MSP to the IT Vendor. This flow is a complete reversal from the last 35 years of the IT Channel. The Channel has moved from “Vendor Out” to “End Client In.” In other words, what the client’s needs and wants are is much more important than what the vendor community has decided to produce.
Large enterprises place their trust in the vendor and its reputation. Remember the old saying, “No one gets fired when recommending IBM.” Large companies have staffs to identify and evaluate vendor offerings. Decision processes are highly structured and capital planning cycles are five years or more. The point of integration for IT is the customer IT staff.
Small Businesses have the same appetite for technology-inspired innovation and IT-leveraged organizational improvements but approach technology investments very differently. They cannot afford to structure careers for IT professionals. Why should they when cloud-based, SaaS applications are readily available and fast to implement. The only problems are which app and how to integrate?
According CompTIA’s Small Business research, the two highest uses of technology are for:
- Enhanced Customer Experience – 38% ranked as #1
- Improve worker productivity – 24% ranked as #1
In addition, CompTIA reports that 40% of small businesses think that they are NOT spending enough on technology. And only 43% are regular users of an outside technology provider.
Without the internal staffs, the small business owner must rely on outsiders. As a small business owner once told me, “When making IT decisions, I want to look across the table and see the eyes of another small business owner on my virtual team. With this kind of relationship, I am confident that my IT provider knows both what drives me and scares me every day.”
Selling to Small Business owners has advantages. Small businesses have:
- One decision maker and simple objectives.
- Relatively simple business structures and revenue models.
- Short decision time frames.
At the same time, small business owners expect the MSP to:
- Speak the owner’s language. Understand the business and its success factors.
- Be proactive and strategic.
- Be a source for technology information, an educator.
- Deliver measurable results.
Unfortunately, most MSP’s are spending their customer-facing time on operational infrastructure metrics. Instead, the conversation needs to be about growing the client’s business. When the conversation switches and the investment choices are identified, the owner’s decision making is based upon three factors which are influenced by the Virtual CIO, the MSP:
- Trust (personal and organizational) – the MSP must earn this trust over the span of many transactions. Build your reputation with small steps before tackling the giant leaps.
- Alignment with Business Model – today more and more MSP’s are specializing on one or more verticals to learn and apply applications, especially as these applications related to enhancing the client’s customer experience.
- Collaborative Spirit – the small business owner needs to regard the MSP as an equal, a peer respected for success as well as a strategic service provider.
In summary, small business is a large aggregate opportunity. MSP’s and their core vendors are well positioned to serve the needs of the small business owner. To do so, however, the MSP needs to build a trusted relationship with the owner, deliver on short-term promises, and learn what makes the client’s business tick. In doing the above, MSP’s need to develop nurturing skills and techniques to build this trusted relationship. Nurturing takes time, but the investment is worth it.