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Thursday, August 28, 2008
When Vendors are selling technology solutions to the SMB market, who is typically the real customer?
Posted by Robert M. Cohen at 8:55am
President and Business Editor Integrated mar.com (eChannelLine Daily News; Conne

I had a great conversation yesterday with Janet Waxman, Vice President Hardware Infrastructure Channels and Alliances at IDC. One of the many topics we touched on was: 

When Vendors are selling technology solutions to the SMB market, who is typically the real customer?
  • They owner/manager?
  • The person at the SMB who ultimately signs off on what they purchase?
  • The VAR/Trusted Business Advisor who owns the relationship with the SMB, determines what solutions, products and brands are purchased?
  • Distributor?
  • Other?

Who do you think it is???




In response to Cynthia Slade's comments
"
As my clients VAR/Trusted Business Advisor, I make the 
purchases or issue a purchase order on their behalf. We 
discuss what is needed and I choose the vendor. It is my 
responsibility to bring the technologies that are the best 
value to my clients. My clients trust that I will keep 
thier interests foremost in my decisions.

The majority of SMBs want to concentrate their efforts on 
running their business and not on running their 
technology. They expect their VAR/Trusted Business Advisor 
(IT consultant) to bring them the technical solutions they 
need. Business managers and owners do not want to choose 
between a variety of vendors, they rely on the consultant 
to determine what vendor/product is most appropriate. A 
very few might want to have a choice presented to them by 
their IT consultant  they still do not want to meet with 
or research vendors. The majority will purchase only what 
is suggested and/or approved by their VAR/Trusted Business 
Advisor. The SMBs understand that the VAR is the one who 
will be supporting the chosen technology. The technologies 
that most consultants recommend are those suitable for the 
clients needs and where they have an on going trust in 
the product and relationship with the vendor. A similar 
technology by another vendor will not be presented if the 
trust and relationship is not there.  
"

Robert M. Cohen replies:
Hi Cynthia:

You're bang on target!

Somehow we need to get your words embedded into every 
Channel Chief's brain and then ensure that they 
understand what these words say and why they are so 
important to the vendor world. 

So ... I will start by repeating what I think are the 
two most important parts of your comment: 


Posted by Robert M. Cohen at 9:52am

In response to Cecil Young's comments
"
My clients rely on me to provide technology advice that 
will enhance their business, and increase their profits. 
Vendors do not provide any real benefits to our customers, 
other than manufacture reliable hardware and software. End 
users can easily purchase hardware and software from direct 
vendors and mass marketeers. When purchasing this way, 
clients do not enjoy the benefit of the expertise provided 
by VARs and Trusted Business Advisors. 

My customers trust me to provide the right mix of solutions 
that will enhance their business. Even with product not 
supplied by us, our clients expect us to liaise with all 
software and hardware manufactuers. Clients do not have 
time to deal with individual vendors. 

It is a very big mistake vendors are making by ignoring 
VAR/TBA's. They do so at their own peril. The channel is 
the best way for vendors to increase their sales and 
relationship with VAR/TBA. 

Vendor programs are complex and difficult to manage. 
Therefore, despite our loyalty to a handful of vendors, we 
do not participate in any vendor programs or register deals 
with any vendor. We do not believe we should be provide our 
customer data to vendors, even if we will shave a few 
dollars of the price. We sell solutions to customers, not 
just hardware and software. We also sell 
"

Robert M. Cohen replies:
Cecil: I fully agree with you that 

Posted by Robert M. Cohen at 9:49am

In response to Cecil Young's comments
"
My clients rely on me to provide technology advice that 
will enhance their business, and increase their profits. 
Vendors do not provide any real benefits to our customers, 
other than manufacture reliable hardware and software. End 
users can easily purchase hardware and software from direct 
vendors and mass marketeers. When purchasing this way, 
clients do not enjoy the benefit of the expertise provided 
by VARs and Trusted Business Advisors. 

My customers trust me to provide the right mix of solutions 
that will enhance their business. Even with product not 
supplied by us, our clients expect us to liaise with all 
software and hardware manufactuers. Clients do not have 
time to deal with individual vendors. 

It is a very big mistake vendors are making by ignoring 
VAR/TBA's. They do so at their own peril. The channel is 
the best way for vendors to increase their sales and 
relationship with VAR/TBA. 

Vendor programs are complex and difficult to manage. 
Therefore, despite our loyalty to a handful of vendors, we 
do not participate in any vendor programs or register deals 
with any vendor. We do not believe we should be provide our 
customer data to vendors, even if we will shave a few 
dollars of the price. We sell solutions to customers, not 
just hardware and software. We also sell 
"

Robert M. Cohen replies:
Cecil: I fully agree with you that 

Posted by Robert M. Cohen at 9:47am

In response to Cecil Young's comments
"
My clients rely on me to provide technology advice that 
will enhance their business, and increase their profits. 
Vendors do not provide any real benefits to our customers, 
other than manufacture reliable hardware and software. End 
users can easily purchase hardware and software from direct 
vendors and mass marketeers. When purchasing this way, 
clients do not enjoy the benefit of the expertise provided 
by VARs and Trusted Business Advisors. 

My customers trust me to provide the right mix of solutions 
that will enhance their business. Even with product not 
supplied by us, our clients expect us to liaise with all 
software and hardware manufactuers. Clients do not have 
time to deal with individual vendors. 

It is a very big mistake vendors are making by ignoring 
VAR/TBA's. They do so at their own peril. The channel is 
the best way for vendors to increase their sales and 
relationship with VAR/TBA. 

Vendor programs are complex and difficult to manage. 
Therefore, despite our loyalty to a handful of vendors, we 
do not participate in any vendor programs or register deals 
with any vendor. We do not believe we should be provide our 
customer data to vendors, even if we will shave a few 
dollars of the price. We sell solutions to customers, not 
just hardware and software. We also sell 
"

Robert M. Cohen replies:
Cecil: I fully agree with you that 

Posted by Robert M. Cohen at 9:46am

In response to Cecil Young's comments
"
My clients rely on me to provide technology advice that 
will enhance their business, and increase their profits. 
Vendors do not provide any real benefits to our customers, 
other than manufacture reliable hardware and software. End 
users can easily purchase hardware and software from direct 
vendors and mass marketeers. When purchasing this way, 
clients do not enjoy the benefit of the expertise provided 
by VARs and Trusted Business Advisors. 

My customers trust me to provide the right mix of solutions 
that will enhance their business. Even with product not 
supplied by us, our clients expect us to liaise with all 
software and hardware manufactuers. Clients do not have 
time to deal with individual vendors. 

It is a very big mistake vendors are making by ignoring 
VAR/TBA's. They do so at their own peril. The channel is 
the best way for vendors to increase their sales and 
relationship with VAR/TBA. 

Vendor programs are complex and difficult to manage. 
Therefore, despite our loyalty to a handful of vendors, we 
do not participate in any vendor programs or register deals 
with any vendor. We do not believe we should be provide our 
customer data to vendors, even if we will shave a few 
dollars of the price. We sell solutions to customers, not 
just hardware and software. We also sell 
"

Robert M. Cohen replies:
Cecil: I fully agree with you that 

Posted by Robert M. Cohen at 9:17am

In response to Cecil Young's comments
"
My clients rely on me to provide technology advice that 
will enhance their business, and increase their profits. 
Vendors do not provide any real benefits to our customers, 
other than manufacture reliable hardware and software. End 
users can easily purchase hardware and software from direct 
vendors and mass marketeers. When purchasing this way, 
clients do not enjoy the benefit of the expertise provided 
by VARs and Trusted Business Advisors. 

My customers trust me to provide the right mix of solutions 
that will enhance their business. Even with product not 
supplied by us, our clients expect us to liaise with all 
software and hardware manufactuers. Clients do not have 
time to deal with individual vendors. 

It is a very big mistake vendors are making by ignoring 
VAR/TBA's. They do so at their own peril. The channel is 
the best way for vendors to increase their sales and 
relationship with VAR/TBA. 

Vendor programs are complex and difficult to manage. 
Therefore, despite our loyalty to a handful of vendors, we 
do not participate in any vendor programs or register deals 
with any vendor. We do not believe we should be provide our 
customer data to vendors, even if we will shave a few 
dollars of the price. We sell solutions to customers, not 
just hardware and software. We also sell 
"

Robert M. Cohen replies:
Cecil: I fully agree with you that 

Posted by Robert M. Cohen at 9:17am

In response to Robert Lane's comments
"
Vendors selling technology solutions to the SMB Market - 
who is the real customer? Lots of folks get involved with 
the transaction, but ultimately 'yee' who signs the order 
is the real customer,. It is more the why and how and for 
what reason do they ultimatley buy becomes the question. 

Some like to deal with the creator, the manufacturer, a 
friend who might be a VAR, a Trusted business advisor
etc. You can never generalize. Learn first how they acquire 
their solutions. Just because you fulfill the role as a VAR 
never gives you the only reason for then to buy. His old ex 
employee who now is a 'consultant' might have the inside 
track - 
Ultimametly it is to find a way to make the transaction 
happen. 

If you have the expertise, then the customer had better 
know this - if not the sale will never happen.  
"

Robert M. Cohen replies:
As always, great to hear from Robert. Your insightful 
thoughts are always welcome and very much appreciated. 

I think you are right on the money. The reason that 
TBAs are so very important to the sales process in the 
SMB space is NOT because they are such great 
salespeople. It is becasue they have a strong personal 
relationship with their customers. This leads to a 
better understanding of what the individual customer 
needs and the ability to talk to the right people at 
the customer. This one-to-one relationship results in 
the key people within the SMBs having tremendous 
amount of confidence in their TBAs. This translates 
into on-going business for the TBAs and for the 
vendors whose products, services and solutions they 
recommend.

Posted by Robert M. Cohen at 9:10am

In response to Mary Ellen Grom's comments
"
This topic is discussed at length when developing strategies
to capitalize on the SMB hype. From a distribution
perspective, the real customer is ultimately the end user. A
technology solution designed with the SMB end user in mind
will have different parameters and product specifications
due to the unique needs of an SMB. 

Many vendors and distributors have designed go-to-market SMB
programs based on creating the right mix of products and
technologies that serve this market. The more delicate
balance is pre-determining the appropriate definition of SMB
- # of employees (size), # of lines (voice opportunity),
existing or planned network infrastructure (data
opportunity), etc. This varies greatly by vendor and
vertical market. The reseller plays a critical role in
recommending the right solution and assisting end users in
staying ahead of their business - not just designing
solutions that fit their business model today. Distributor
value added services developed for resellers targeting SMBs
are important as well.
"

Robert M. Cohen replies:
Thanx for your response Mary Ellen. I have been 
arguing this point for almost 30-years now. Back in 
1981, when I was a young business professor, the 
Canadian Government asked me to help head up the Small 
Business Secretariet. I asked them what their 
definition of a small business was. To my surprise, 
they answered that a small business is a smaller, less 
complicated version of a big business. 

My second question was what the mandate of the 
Secretariet was and they responded that it was to help 
small businesses become big businesses. 

I guess maybe I thought that the idea of helping small 
businesses become more complicated was not a great 
idea ... I turned down what was supposedly the 
opportunity of a lifetime.

Yet, still to this day, most people believe that a 
small business is a business trying to become a big 
business and that a successful business is a business 
that has become a big business. 

Truth is that while Vendors are all finally talking 
about the SMB market, very few of them are truly 
making solutions for SMBs. Instead, they are adapting 
enterprise solutions with the thinking that SMBs are 
just small versions of large companies.

Somethings never change :(.

Posted by Robert M. Cohen at 8:59am

In response to Stuart Crawford's comments
"
In our market, many of our clients are way to busy being 
focused on their core business to worry about what 
technology solutions are being marketed out there.  
However, saying that the commercial space plays a huge role 
in influencing SMB's with technology.  The hype on the 
iPhone for example has lead a number of my clients and also 
my engineers to get iPhones.  Or look at the Apple/PC 
commercials on TV, they are leading SMB's to ask questions 
on the Apple platform and if that would fit into their 
needs.

Ultimately, many SMB's turn to their IT consultant or 
Business Advisor (IT Professional) to tell them what they 
need, the want us to manage the relationship, have the TBA 
understand the business needs, work and manage the people 
side of the transaction and make things happen.

I talk about this in my 
"

Robert M. Cohen replies:
Thanx Stuart.

Now that we have the concept and the partners in 
place, we will be working with you to create the TBA 
Plus Program. It will have a huge effect on how the IT 
Channel does business.

Posted by Robert M. Cohen at 3:48am

Vendors selling technology solutions to the SMB Market - 
who is the real customer? Lots of folks get involved with 
the transaction, but ultimately 'yee' who signs the order 
is the real customer,. It is more the why and how and for 
what reason do they ultimatley buy becomes the question. 

Some like to deal with the creator, the manufacturer, a 
friend who might be a VAR, a Trusted business advisor
etc. You can never generalize. Learn first how they acquire 
their solutions. Just because you fulfill the role as a VAR 
never gives you the only reason for then to buy. His old ex 
employee who now is a 'consultant' might have the inside 
track - 
Ultimametly it is to find a way to make the transaction 
happen. 

If you have the expertise, then the customer had better 
know this - if not the sale will never happen.  

Posted by Robert Lane at 12:37pm

My clients rely on me to provide technology advice that 
will enhance their business, and increase their profits. 
Vendors do not provide any real benefits to our customers, 
other than manufacture reliable hardware and software. End 
users can easily purchase hardware and software from direct 
vendors and mass marketeers. When purchasing this way, 
clients do not enjoy the benefit of the expertise provided 
by VARs and Trusted Business Advisors. 

My customers trust me to provide the right mix of solutions 
that will enhance their business. Even with product not 
supplied by us, our clients expect us to liaise with all 
software and hardware manufactuers. Clients do not have 
time to deal with individual vendors. 

It is a very big mistake vendors are making by ignoring 
VAR/TBA's. They do so at their own peril. The channel is 
the best way for vendors to increase their sales and 
relationship with VAR/TBA. 

Vendor programs are complex and difficult to manage. 
Therefore, despite our loyalty to a handful of vendors, we 
do not participate in any vendor programs or register deals 
with any vendor. We do not believe we should be provide our 
customer data to vendors, even if we will shave a few 
dollars of the price. We sell solutions to customers, not 
just hardware and software. We also sell 

Posted by Cecil Young at 6:59am

In response to Ajay Singhal's comments
"
The owner/manager of the business.  Most product features 
and subsequent marketing material are designed with them in 
mind. 
"

Robert M. Cohen replies:
I agree with your comment from a manufacturing 
perspective. However, do you really feel that the 
owner/manager makes the decision on what products and 
brands he purchases? Do your customers tell you what 
brands to buy or in the vast majority of sales, do 
they buy the brands that you recommend?

Posted by Robert M. Cohen at 6:47am

In response to Cecil Young's comments
"
The VAR/Trusted Business Advisor who owns the relationship 
with the SMB, determines what solutions, products and 
brands are purchased? 

The VAR/TBA represents the end user and it is his 
reputation that is on the line, not the vendor.

Cecil
"

Robert M. Cohen replies:
Hey Cecil

True, it is the VAR/TBA whose reputation is on the 
line. Question is: does the Vendor think of the 
VAR/TBA as an extension of their sales force or as 
their customer. Unfortunately, most Vendors think of 
VARs as the extension of their sales force. Thus, in 
my opinion, is where the problems begin.

Posted by Robert M. Cohen at 1:27am

As my clients VAR/Trusted Business Advisor, I make the 
purchases or issue a purchase order on their behalf. We 
discuss what is needed and I choose the vendor. It is my 
responsibility to bring the technologies that are the best 
value to my clients. My clients trust that I will keep 
thier interests foremost in my decisions.

The majority of SMBs want to concentrate their efforts on 
running their business and not on running their 
technology. They expect their VAR/Trusted Business Advisor 
(IT consultant) to bring them the technical solutions they 
need. Business managers and owners do not want to choose 
between a variety of vendors, they rely on the consultant 
to determine what vendor/product is most appropriate. A 
very few might want to have a choice presented to them by 
their IT consultant  they still do not want to meet with 
or research vendors. The majority will purchase only what 
is suggested and/or approved by their VAR/Trusted Business 
Advisor. The SMBs understand that the VAR is the one who 
will be supporting the chosen technology. The technologies 
that most consultants recommend are those suitable for the 
clients needs and where they have an on going trust in 
the product and relationship with the vendor. A similar 
technology by another vendor will not be presented if the 
trust and relationship is not there.  

Posted by Cynthia Slade at 10:22am

The owner/manager of the business.  Most product features 
and subsequent marketing material are designed with them in 
mind. 

Posted by Ajay Singhal at 9:46am

Hi Robert,
I think in our experience (which is limited as so many of 
our solutions are not really geared to the SMB market), it 
is usually the owner/manager.  They tend to be much more 
hands on in this type of activity that say a larger 
organization where there are more layers and levels of 
responsibility.  Because the price point of our solution 
is often much higher than they may have hoped to spend the 
acquisition tends to go up the food chain of the 
organization to the person who really has ultimate 
authority over the expenditure.  Sometimes it goes up that 
high because they need to really understand for themselves 
the cost/benefit/value envelope.  What is the value and 
when can they realize it if they buy and sometimes they 
need to know the answer to 

Posted by Debra Durant-Keeling at 9:09am

I think it depends on the size of the SMB, but if it is 
under 100 seats, its probably the VAR/TBA.  If its over 100 
seats, it may be a combination of the VAR/TBA and one or 
more staff members.

William Vanderbilt
+1 (630) 343-6261
WVanderbilt@InnovativeLearningChannels.com 

Posted by William Vanderbilt at 9:03am


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