How Channels can be Family Doctors to SMBs

Today, channel partners help customers decipher the deluge of information to make more informed decisions – saving on costs and improving performance. Complex and heterogeneous implementations, take a good service support, to avoid business disruptions.  Channel partners are increasingly becoming trusted consultants more than merely solutions integrators for small businesses.

 Small businesses have learnt to improvise along the way.  Customers are today more aware than ever of their best options, especially with the ability to directly reach  their service providers, the middle layer – especially solution providers, channel providers have a tough time in redefining their roles.  But most channel providers have taken this as a continuous evolution of their markets and have responded to evolve, going on contributing to their customer’s success.

“The distance between the consumer of the service / product and the technology provider has shrunk dramatically,” says   Suresh Krishnamoorthy, Managing Partner of AssureIT services.  Suresh, with over 25 years of handling channels and now a consultant himself says ,”With open forums sharing data and feedback about most products and services, customers don’t wait to reach out to channels for advice. That is the key relationship factor, the constant consulting and information exchange between customer and channels have decreased dramatically.”

This challenge is not affecting just relationships, but also business for channels.”Continuous channel interaction is key for channel’s success.  And this is possible by continuous innovation,” says KV Krishna, CEO of Spudweb Infrastructure Solutions.  “‘What we do is to be truthful with the customer.  What you see online is also opinions  about choices.  So we are participating in the information sharing process – only difference is that we meet the customer to discuss on the information, instead of the problem itself.”  This is the important change.  It is about dissemination of expert information – the customer is aware, so it is important for the channel sales or presales teams to continuously learn.  Scenario based learning in technologies is also key.

The second challenge is even more difficult to handle.  With price not restricted to the files of the purchase team, better purchasing power is in the hands of the customer.  This affects margins of certain traditional category of products like servers, storage, network etc., Channels have struggle to respond, as margins are always under strain – beyond traditional competition.  It is a challenge that channels live with, but customers benefit from, says Shrikant Garud, CEO, Auisy Technologies, Pune.

Where the customer really benefits from channel relationship is when the solutions become complex – and a real field-expertise is required.  Heterogeneous, multi-vendor product scenarios, complex solutions need lot of field level, tactical improvisations, and this is where the channels score.  The complexity is sometimes created by self-medication, where small businesses take ‘advise’ from internet, and construct their own solutions.  The availability of channel is like the family doctor, and a quick fix, followed by health advice is still relevant, says Shrikant.

Suresh K  agrees.  The customer has changed from seeking basic information to enquiring for solutions for complex problems, and that is where his advise as a consultant is still relevant to the customer.  He adds “the sales engagement has moved to another level;   and the satisfaction of helping the customer in a more complex situation is intellectual satisfaction.  How does it translate to customer benefit?  The relationship is now more relevant.  We are evolving to information givers to consultants.”

The benefit to the customer is that he is able to make a more informed decision.  It could translate to cost savings, efficiency and better business, overall. For example, customers increasingly enquire about mobile devices, cloud, social media and analytics.  “While we have readymade solutions, we listen to customers more.  The reason is simple – with some knowledge and questions around how best to spend,” says K V Krishna. “We understand that the customer is trying to make the best decision possible.  Once we appreciate that, our role as a consultant is more appreciated as business partners. New technologies are there to make lives and business better.  However, relevance of the technologies are always context driven, and hence a balance of technology upgrade and protection of existing investments is always needed.”

Small businesses, now have more options.  They are looking to manage costs better; easing of cash flow issues – avoiding as much capital expenditure as possible.  This applies for even software licenses, Shrikant says, which is yet another area where customer seeks higher ROI.  With technology providers like SAP, Oracle and Microsoft going into a massive drive on license compliance, the cost of compliance is a big issue for small businesses.  Sometimes, the compliance list presented by the technology provider exceeds than the entire IT budget, and sometimes, the relevance is not clearly explained- just policies are cited, says Shrikant.  This is another observation, which can create another key role for the channel partners.

Equipped with knowledge of both customer usage, as well as license policies, channel partners are probably in the best position to help small and medium businesses handle the compliance challenges around customized software.  A regular audit, or review of existing software covering the number of users and license categories, is done by a committed channel partner and this helps customers to understand and optimize use of license investments.

Suresh K adds, “customers are always seeking options to handle this difficult business.  We advise customers to look at open source options as well, especially categories of applications and databases.  This helps customers to manage license costs better, especially if the budget has a hard ceiling.”

For Hardware , customers are looking for rental or lease options. Krishna explains, ”While such solutions have been more prevalent for some years now, the increased use as part of package deals is making customers more sticky, in return of long term businesses.  Only large businesses used to do this, but even smaller business, especially mid-size businesses are involved.  23% of my customers are on this type of bundled contracts, covering rental, services, and support.  This helps the customer to pay on a monthly basis, and if there is an increase is capacity, still it is managed without a huge delta increase in budget.

That comes to  two critical point  – utility based pricing and outcome based pricing models.  While smaller business cannot really hedge on outcome-based models, which normally hinge on risk – reward models, utility-based models have gained faster momentum.  “For example, customers talk to us on bandwidth, voice and server/ storage infrastructure on a pay-as-we-go basis.  Here is where our tie-ups with service providers help.  As a channel partner for Sify, an established cloud, hosting, network, bandwidth provider in the Indian market, Krishna is able to address this issue reasonably well,” he says.

The paradigm change in customer awareness of both technology and service options, with multiple commercial opportunities available,  have led to channel service providers and partners of technology providers to take a more interactive, and learned consultative approach.  Adding to this the challenges around budget related challenges for small and medium businesses have made channel partners, the ‘family doctor’.  “Such in-depth interactions continue to be the bulwark of channel-client relationships,”’ Krishna summarizes it nicely – ‘as the bar rises higher, the mechanism changes, but the intent and the execution to be the customer’s business partner remains.”  Channels have indeed evolved to support small and medium businesses.