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SMBs: It Takes One to Know One—and to Sell to One

Posted By Administration, Friday, June 20, 2014
Originally posted on 3/8/2013

Manoj Bhatia, CA-AM, senior product marketing manager of go-to-market strategy for the midmarket at Cisco, dedicated his 2013 ASAP Global Alliance Summit presentation to a topic we at ASAP Media will explore in much greater depth in our upcoming Q2 2013 issue—the David-Goliath relationship. Where our article will be limited to big and small entities working together as partners, Bhatia expanded the discussion to discuss selling to SMBs, as well as selling with them, in his session “When Your Customer or Partner Is Small.”

Bhatia first laid out Cisco’s organizational model for its SMB channel sales efforts—a business unit–driven strategy guiding sales, marketing, and channel activities.

What do small resellers and technology start-ups want from their larger partners? The sales organization wants help closing deals, the channels division wants sweetened incentives, while the marketing department wants messaging and campaign support—but in a digestible form rather than hundreds of pages of collateral.

Balancing the two entities’ needs isn’t necessarily simple or straightforward, particularly when the Global 1,000 organization and start-up collaborate to sell to SMBs. Since SMB transactions are generally lower-margin, the large company tends to want the smaller channel partner to carry out much of the sale and thus take on most of the costs. If that’s the case, channel partners need incentives, training, and resources. Moreover, that SMB partner has to get a simplified version of all relevant messaging.

Because if done properly, a large largely untapped market segment can be captured, particularly for Bhatia’s division at Cisco which is responsible for collaboration infrastructure technologies such as voice-over IP and video—a $7.1 billion market in which 75 percent of businesses have not yet embraced these new technologies fully. Also working in large vendors’ favor is a friendlier selling climate that is seeing SMB customers trusting larger companies more and more as long as it enjoys a good customer experience, according to Bhatia.

Towards the end of the presentation, Bhatia posed five rules for selling to the SMB segment: 1) keep it simple—limit the scope of messaging and governance so as not to overwhelm the partner; 2) address the hard questions up front; 3) energize overlooked distributors—“they’re big box movers,” said Bhatia—; 4) define new vectors through existing partners, competitive partners, and distributors, and “farm, hunt, and nurture” them accordingly; and 5) launch both client- and partner-focused strategic initiatives. On this latter point, Bhatia cited partner enablement, market pulse, and market map–related activities as examples of partner-focused initiatives, while new campaigns around migration, customer experience, and competitive intelligence exemplify client-focused ideas.

Bhatia spent some time showing how tricky it can be for a large organization to execute rule two. A company like Cisco has to balance the needs of both the enterprise and SMB’s respective sales efforts and allocate resources to them judiciously. It isn’t always obvious, for example, whether to pursue one $10 million deal versus 200 half million–dollar accounts. Likewise, if 20 percent of a 5,000-partner base is active, does a company try to ignite the other 4,000 “dormant” partners, double down on your top 1,000, or hunt for another 1,000 new partners?

Selecting the resources to provide this SMB ecosystem is tricky, too; resellers may benefit from utilizing the “cool” product kit in their sales efforts, but does that mean you have to provide the costlier kit to all 5,000 partners? Similarly, do you mass market to many prospective smaller customers or focus more finely on five bigger clients?

Bhatia ended the speaking engagement with three summary points. Larger partners need to provide simplicity to smaller partners and a good experience for customers. Meanwhile, the SMB partner must leverage the large firm’s marketing machine and skills training to bolster its sales practice. All the while, the business unit function overseeing the large company’s sales, channel, and marketing operations needs to create what Bhatia called a “SWAT go-to-market” team to reinforce alliance principles and define and refine strategy as the SMB program unfolds.

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