Selling to SMBs

“The pessimist,” observed Winston Churchill, “sees difficulty in every opportunity — the optimist, opportunity in every difficulty.”

It’s a saying information and communications (ICT) vendors, especially those focused on the small and mid-sized businesses (SMB) space, would do well to heed, according to one Canadian expert.

 

VIDEO: IDC Canada’s Paul Edwards on SMB market opportunities and challenges

For while the market right now is undoubtedly arid, there’s an oasis of opportunity out there awaiting vendors with the right strategy and attitudes, according to Paul Edwards, director of SMB and channel strategies at analyst firm IDC Canada in Toronto.

Edwards was speaking at Connex Conference 2009 held in Toronto last week. The event was hosted by Ingram Micro Canada.

The first step, he said, is acknowledging the challenges.

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These are evident from IDC’s “Canadian ICT Spending Market Forecast” released last month.

The report paints a rather ominous picture of IT spend in Canada. Some highlights are:

The hardest hit is PC year-over-year sales, down 14.60 per cent.

That’s followed by servers, down 12.10 per cent and storage, down 10.2 per cent.

On the postive side, the analyst noted, it’s still a $40 billion market for IT in Canada, “and if you factor in telecom services – such as wireless – that’s another $40 billion.”

So with an impressive $80 billion anticipated spend on IT products and services in 2009, there’s still ample opportunity, he said.

Advantage in execution

But here’s the catch: with relatively similar technologies in many areas, the advantage is “really all in the implementation and execution.”

And it’s here that groups such as value added resellers and systems integrators can distinguish themselves, Edwards said.

How?

For starters, they need to respond to the growing focus on “business IT”, especially among SMBs.

Resource-crunched small and mid-sized firms have little time to waste on technologies and products whose business value is not clearly evident right from the start. Their interest is in applying technology to key business imperatives – such as productivity.

But the IDC analyst rued that — for the most part — resellers and systems integrators aren’t prepared to have those kinds of discussions with SMB customers.

“Their discourse is still about speeds and feeds,when they should first be positioning around the business and its needs, and only then getting into the products and solutions.”

It’s a view echoed by Adam Belzycki, director of sales at SHI Canada in Toronto.

As a case in point, Belzycki cites how the VAR community has traditionally handled Microsoft software licensing.

 “Typically, they approach it as tactical exercise:how many licenses do you need, what version are you looking to upgrade … and so on.”

At SHI Canada, he said, the sales team takes a very different approach.

“We look at it as a software asset management issue.” SHI sales staff, he said, is trained on Microsoft software asset management principles, core I/O principles, and the like.

“They can go in and talk about software asset management, understanding what the customer already has in place and offering to fill what’s lacking. It’s a very different conversation from: how many copies of Office do you need?

The same inexorable focus on “business issues” is at the heart of the success experienced by Oakville, Ont.-based Unis Lumin, according to Mauro Lollo, the firm’s co-founder and chief technology officer (CTO).

Around 19 years ago, Lollo and John Breakey (Unis Lumin president and CEO) launched the firm out of a basement, with a half-page business plan and very little capital.

Today Unis Lumin is a high-profile company whose clients include major corporations, provincial ministries, healthcare and educational institutions.

Lollo attributes his firm’s meteoric rise to an “uncompromising” focus on the business requirements of its clients.

“That’s always been part of our mindset at Unis Lumin. In the end, IT is really there to support the business – the processes, functions and goals.”

Lollo said in dealings with clients, his sales team first attempts to understand their business vertical.

“Next we would try and get a handle on the pain points they’re experiencing, which often has to do with a flawed process or cycle. Once we grasp all this, we create a link between technology offering and its use to remove that problem.”

He cited an example of one of Unis Lumin’s clients, a legal firm that initially didn’t have a process in place to capture, realtime, information about their attorneys’ interaction with customers.

“We saw the benefits of doing this would go beyond simple and timely information capture,” Lollo recalled.

He said Unis Lumin linked the company’s unified communications system with its backend billing system. “This has expedited the invoicing process, helping the company to dramatically increase its cash flow.”

The legal firm, he said, is now able to bill much quicker, and more accurately. “That shaves time off the entire financial cycle and the end result in greater liquidity.”

Coaching for success

But equipping sales teams with the skills and expertise to make these kinds of linkages between “business benefits” and “tech solutions” isn’t easy.

It requires intensive training.

And even before a new mindset can be forged, long-entrenched habits need to be uprooted, Lollo noted.

For instance, he said even seasoned sales persons tend to be product-centric rather than business solutions-centric.

“We’ve had to first eradicate ingrained habits and then rebuild new ones almost from scratch — that process is time consuming and quite expensive to do.”

But such “deconstruction” is essential, he said. “You have to take two steps back to eventually take those six steps forward.”

One way this “deconstruction” is accomplished is via role play.

The sales training at Unis Lumin is replete with simulations of a vast variety of real-life interaction with clients.

The sales trainee’s actions, reactions and conversation during the role play are closely monitored and immediate feedback offered.  

Vendor resources – the low-hanging fruit

When providing such training, VARs can take advantage of resources that vendors and OEMs (original equipment manufacturers) offer, said IDC Canada’s Edwards.

Vendors are developing great training on the knowledge and skill sets required for approaching their markets, from a business perspective.

It’s low-hanging fruit for VAR sales teams, as it requires very little capital investment, but the pay off can be huge.

SHI Canada’s Belzycki wholeheartedly agrees.

At his firm, he said, much of the training for new reps — via “SHI University” — is provided directly by vendor partners.

“Over the past few years it’s been given a distinct business emphasis.”

He cited the example of the first month of training at SHI University, that’s focused on Microsoft and HP offerings.

“During this month, trainees work towards an HP SMB certification.

But while the program deals with products, it’s also geared towards positioning these correctly for different lines of business.

Harnessing such vendor-provided training resources is a smart thing to do, Belzycki said.

“They put a lot of time, effort and investment into developing those.”

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