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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Midmarket technology and business buyers – must sell to two different groups

Over the past six months, the need for advanced solutions and professionals supporting strategy, implementation, integration, and optimization has become much more acute. Business patterns changed by COVID-19 require businesses to accelerate digital transformation within their operations. Purchasing authority has shifted from IT to business management, requiring solution providers to position their offerings and services in terms that emphasize business metrics, such as time to market and measurable revenue and cost impact, rather than technical specifications and targets. This focus on business outcomes ripples through partner marketing and technical operations: marketing needs to emphasize time-to-benefit, the ability of individual solutions to contribute to overall business agility, and the direct application of IT features to pressing business needs; on the technology side, partners need to focus as much as possible on services centered around pre-built vertical solutions that can be deployed and integrated rapidly, with replicable processes and predictable outcomes, so that delivery matches the vision set by marketing and the requirements of the customer executives.

In a unique survey, Techaisle posed several and the same questions to both BDMs (business decision-makers) and ITDMs (IT decision-makers) and probed to identify what each expected from the other. Techaisle data shows that although BDMs have higher expectations of ITDMs, they align reasonably well in some areas, and there is a broad expectation gap in others.

  • 53% of midmarket BDMs say that it is very critical for business success that ITDMs can identify and associate IT solutions with business efficiency, productivity & profitability. On the flip side, only 30% of IT executives in these midmarket businesses say that business executives should be able to associate IT solutions with business efficiency, productivity, and profitability. Responsibility for delivery rests with IT, and BDMs have very high expectations from ITDMs.
  • Data also shows that BDMs have high expectations for support in using technology to build customer experience. Over 40% of BDMs believe that IT must understand solutions that enable beneficial customer & supplier interactions. In contrast, less than 25% of ITDMs say that BDMs should understand such solutions.
  • Employee productivity is an essential aspect of a business, and in most cases, business management expects IT to understand and deploy core technology solutions to make employees more productive.
  • Business process automation is an area where there is better alignment between IT and business. Nearly 40% of BDMs say that it is critical for business success that IT can identify requirements for automation and associate IT solutions with these needs.
  • Cross-organizational integration is vital for both BDMs and ITDMs, and over 50% of both groups agree that the other should associate and adopt technology solutions with changing business demands.

Business decision-makers (BDMs) are an intrinsic force in most midmarket organizations. They are the primary decision-makers in some high-growth technology areas, including collaboration and analytics – meaning that increasingly, BDMs are 'the boss of IT.' These BDMs view IT as a component of business processes rather than as a stand-alone silo. Techaisle SMB & Midmarket Decision Authority data shows that twice as many BDMs as ITDMs (IT decision-makers) in midmarket businesses say that IT must understand how technology contributes to overall organizational success. These BDMs have specific objectives for technology usage, clear perspectives on adoption drivers and impediments, and tend to be influenced by information sources that are different from the inputs used by ITDMs.

This pressure from business managers leaves IT leaders scrambling to stretch limited budgets to meet seemingly limitless requirements, striving to deliver predictable, secure systems that respond to their business users' increasingly varied needs and competitive environments. The divide increases because business perspectives on technology are shaped by information channels that are not part of the IT professional dialogue. The different information channels create an environment where businesses are struggling to develop the cohesion needed to promote or embrace new IT capabilities to achieve business objectives within existing IT and business process structures.

ITDM and BDM divergence will continue, and although there is cross-pollination, they may continue to operate from different pods. Although it may be tempting to try to bring the various parties together, IT suppliers cannot successfully act as intra-corporate matchmakers: they have to grasp the reality of selling to two different constituencies with different expectations.

 

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Post-pandemic lead generation is proving problematic for channel partners

Six months have changed how SMBs and enterprises operate, how employees work, how customers purchase, and how products/services get delivered. A shift in go-to-market imperatives has become problematic for channel partners. Techaisle leveraged its panel of 225K channel partners to understand the impact of the pandemic on channel business. 49% of channel partners have allocated resources and budget for lead generation, but 60% rely on leads from vendors, an increase of 18% from pre-pandemic. 29% more channel partners than previously are finding social media as one of the most effective methods of lead generation. 46% of partners have increased their usage of analytics to drive leads, and 60% have increased influencer marketing.

Techaisle survey research data also shows that for 42% of channel partners, driving growth is the top business issue, especially with a clear focus on increasing the effectiveness of sales and marketing. Despite pandemic, 68% of channel partners expect revenue increases in the next year but have tempered their revenue growth expectations from 19% to slightly over 10%. Channel partners deploying digital transformation solutions expect ~2X revenue increase compared to those who are still not focused on digital transformation offerings for their customer base.

The requirement to focus on digital discovery conveys some hard truths. The first is that channel partners need to reach a large and diverse buyer population, extending beyond the IT department into business units and the executive suite, which means that marketers need to create and place various messages to keep the sales process on track. Another important implication is that prospects who engage with a vendor will represent a relatively small subset of the total potential market, as many buyers will disqualify suppliers before drafting a potential vendor list. The third implication follows the first two: to maximize the addressable market; channel partners need to embrace digital marketing as a way to gain entree to accounts that have not yet self-identified as prospects. Channel partners that rely on traditional lead generation campaigns realize that these funnels are reaching a diminishing share of the market.

Marketing has not been a primary focus for most channel businesses, and those that have invested in marketing staff have typically tasked them with optimizing access to vendor investment funds. Marketing’s need to add advanced digital competencies is challenging most channel partners. Vendors will need to provide programs that support content and digital marketing to ensure that their partners can engage with the largest possible number of prospective clients. Techaisle’s research highlights the core issue. Buyers, working in teams that average 5.1 individuals, typically don’t have meaningful contact with a supplier until they are 70% of the way through the purchase process.

All four of the top IT suppliers – Dell Technologies, Cisco, HPE, and IBM – have made partner marketing a priority.

  • Dell Technologies’ Cheryl Cook, SVP, Global Partner Marketing, is made it a mission to equip and educate partners with a series of guided podcasts and webinars
  • Cisco’s Boon Lai, VP, Global Partner Marketing, is enhancing the marketing velocity program
  • HPE’s Laura Seymour, Senior Director, Global Channel Marketing, is focused on Marketing Pro and Partner Marketing Concierge
  • IBM’s Catherine Solazzo, VP, Partner Ecosystem Performance Marketing is driving My Digital Marketing platform

If the customer journey begins with research conducted via the web, the marketing imperative must start with digital discovery. The channel partner marketing teams should take advantage of their IT suppliers’ initiatives, invest in putting thought leadership messages in front of prospective customers, and in the processes required to nurture new contacts to the point where they become sales-ready leads. Leaders at traditional channel partners will recognize this endpoint – but the process needed to arrive at this point is much different in the post-pandemic world.

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