Published on March 24th, 2018 | by Louella Fernandes0
5 tips for channel partners to succeed in the SMB market
By Louella Fernandes • on March 24th, 2018 • in Articles • 512 views • No Comments
Quocirca’s Global Print 2025 report reveals that print manufacturers are set to lose their influence on customer relationships in favour of IT service providers that deliver print services as part of a broader offering. Businesses are increasingly looking for suppliers that can demonstrate IT expertise and be strategic partners to both IT and various lines of business (LOB). Building IT services capabilities would present print manufacturers with the opportunity in the small and mid-sized business (SMB) market, helping to offset declining legacy revenue. However, to do so manufacturers must ensure the right mix of channel and technology partnerships.
Changing channel dynamics
The changing ways SMBs wish to purchase, consume and pay for their IT is redefining the role of the channel, fundamentally changing business models and relationships. While print channel partners are gradually transitioning to a managed print services (MPS) model, extending this to other aspects of IT will be the key to sustaining growth.
While printing is not set to disappear any time soon – overall 64% of businesses expect to still rely on printing by 2025 – digitisation efforts are also accelerating, and security is a top concern. This convergence demands a new breed of supplier that can support the business transformation needs of SMBs.
In the SMB market, print vendors have an opportunity to offset diminishing revenues from traditional hardware-centric business models by advancing services portfolios. The Global Print 2025 study reveals that by 2025, 26% of SMBs expect their organisations to have the deepest relationship with IT service providers, increasing from 23% today. This is at the expense of print manufacturers, which see their influence drop from 27% today to 13% in 2025. A further 17% of SMBs expect a stronger relationship with MPS providers in 2025, up from 14%.
The evolving technology needs of SMBs
SMBs are diverse, ranging in scale and ambition, from fast-growth start-ups to stable, medium-sized businesses. SME technology investment plans vary depending on business focus and size, but according to the Global 2025 report IT security and cloud top the agenda.
Just like larger companies, SMBs are interested in deploying new technology, but are constrained by budget and limited IT expertise. This lack of expertise is good news for suppliers which understand their customers’ business and industry needs and have the technical expertise to deliver a broader array of solutions and services. SMBs are increasingly adopting low-cost, cloud-based services and managed services to reduce operational costs, remain competitive and improve efficiency. Consequently they are placing increased demands on suppliers.
Quocirca’s Global Print 2025 research reflects these changing requirements. In organisations with 100-249 employees, 57% are looking for a provider that can be a strategic partner to both IT and LOB – this rises to 60% in organisations with 500-999 employees. Over half of SMBs expect a supplier to have strong IT security expertise, rising to 65% in SMBs with 500-999 employees. Other top requirements are industry specific expertise, business process automation capabilities and providing analytic insight.
Can the channel shift gear?
Although some print-focussed channel partners have successfully made the transition to managed print services (MPS), the majority remain focused on hardware-centric transactional sales. When it comes to IT services, traditional print partners often lack the skills, experience and capabilities to be credible providers. There may not be the incentives or knowledge in place to sell broader IT solutions, and provide a consultative sales approach which is a core capability of many broader IT service providers. As a result, many print channel partners may view a move to IT services as high risk requiring too much investment and time.
Typically, SMBs do not typically look to traditional print channel partners or print vendors as a source of innovative services beyond print. They are more likely to turn to existing IT service providers focused on business outcomes, rather than speeds and feeds.
So how can the print channel step up its game, and build IT services credibility and reputation? Consider the following recommendations:
- Change the conversation. Channel partners must change their expertise, shifting from the outdated print-centric reselling model to embrace a new role as trusted and strategic advisors to their customers. They must change the nature of the conversation they have with SMBs, engaging with the influential business decision-makers responsible for strategy. The conversation must be around the how to drive efficiency and productivity – not just about technology or products. As businesses turn to them for guidance and support, channel partners will need to be able to deliver consultative services and expertise. This also means tapping into adjacencies such as digitisation and security, which are increasingly part of the broader printing proposition.
- Partner for IT expertise. Partnering with accredited and experienced IT service providers gives print channel partners access to both a broader product portfolio and provides a direct route into the IT services market, supported by specialist technology sales and support resources. For instance, this enables partners to potentially offer print security services and solutions as part of a broader managed security service offering. For manufacturers or large channel organisations, acquiring IT providers can be an effective means of gaining specialised expertise to develop and augment IT services in-house. It is also a direct means accessing experience in selling or supporting IT services. Some manufacturers including Konica Minolta, Ricoh and Sharp have already made the shift, expanding their managed IT service capabilities largely through acquisition.
- Become specialised. The shift to margin-rich services means developing industry specific expertise. Invest in the skills needed to deploy and connect a range of technologies – both across hardware and software – and consider developing vertical specific offerings.
- Focus on delivering business outcomes. As SMB purchasing decisions are increasingly influenced by non-IT decision makers, channel partners will need to expand their influence to multiple stakeholders. For larger businesses, the channel needs to focus on building skills in delivering business outcomes to LOB buyers, while retaining a strong relationship with the IT department.
- Monetise solutions. Channel partners that invest in software development to expand their offerings should consider monetising and building the resultant intellectual property (IP) through delivering applications. Building a portfolio of applications wrapped around the core business – for example, MPS or document workflow – should lead to new opportunities. Consider including assessment or consulting services as well as integration services.
The channel must shift gears and change its business model in order to increase engagement with SMBs. Repositioning as an IT services and solution provider may seem high risk, but by developing credible converged IT offerings, channel partners may be able to increase their relevance, create differentiation and create longer term and more profitable relationships.
Learn more about the changing SMB printing landscape at www.print2025.com.