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ROUTES TO MARKET

USING DEALERS TO REACH SMBS
All the research indicates that small and medium sized enterprises prefer to buy from local dealers or solution providers. So why do so many suppliers find it all but impossible to work well with dealers? And what is best practice for an SME reseller channel...
Author: Max Hotopf | Editor the Routes to Market Journal
Email: max@the-rtma.com

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If it is hard to identify which SMBs you should be selling to, it seems to be almost as difficult for many suppliers to identify the resellers they should be working with.

There are several problems. 

Joe Hemani runs Westcoast, a large UK distributor. He likes to compare the SMB channel for IT products, rather unfavourably, to McDonalds or Kentucky Fried Chicken: "Buy a Big Mac in Glasgow and it will taste the same and be the same price as a Big Mac in Slough.  You can't beat the big fast food franchise chains for the consistency of their customer experience."

"But ring half a dozen resellers about a printer and you will get six different prices for three or four different models. The sixth person will try and switch-sell you to another brand!"

So the SMB reseller base is inconsistent, disloyal and of variable quality.  Simon Robinson, Microsoft EMEA channels manager, says: "We feel that there is a vacuum. Many SMBs would be buying IT solutions, but they simply don't know how to find the people with the skills to implement them successfully."

It is also hard for the vendor to spot the gold, those resellers who can build business and deliver decent solutions.  This problem has been exacerbated by the growing heterogeneity of the SMB channel.

For instance, today most accountancy software resellers are not interested in selling hardware at all.

Robinson reckons that there is a whole layer of hidden influencers - consultants and business advisers - who have a huge impact on IT decision-making but who, as they are not reselling any products, are completely invisible to Microsoft.


All this shows precisely why it is vital to know the customer group you are aiming at.  Having identified how they purchase, you can then work out which intermediaries are serving them best.  This is the route adopted by Cisco.

Vice president Paul Mason says: "Cisco spent a lot of time researching what people wanted to buy and where. The entire exercise is driven by our desire to ensure that when users do purchase our products they get adequate support."

"We show it to the resellers and tell them to whom we think it will appeal.  We leave it to them to identify the individual companies.  They know who the customers are."

In the case of Cisco, this led to the careful crafting of nearly half a dozen specialist types of solution providers.  And Cisco is now busy training and recruiting to attack the nineteen million companies which make up the SMB market in Europe.


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