Trying to focus your IT channel selling strategy on the entire SMB (small to midsize business) ecosystem is like trying to boil the ocean. How do you segment your efforts so your entire team (sales and technical) doesn’t lose its mind by prospecting and serving “everyone”?
Let’s explore how to prevent your IT channel selling strategy from becoming yet another “numbers game” this year.
Consider whether company size really matters.
There is considerable breadth and depth to the employee- and financially-based definitions of the SMB marketplace. Any SMB appears to be “fair game” according to these definitions. However, lack of team strategy can quickly morph sales outcomes into a chaotic tsunami.
According to Gartner, the SMB marketplace represents businesses with fewer than 100 employees up to 999 employees. That definition encompasses VSBs (very small businesses) with an average of either 1 -7 as well as 7-15 employees who wear multiple hats and serve multiple functions. Has your channel team come across any of “those” types of SMBs lately?
Gartner further breaks down the SMB marketplace by annual revenue. Small businesses earn <$50M in annual revenue. Midsize businesses earn >$50 and <$1B in annual revenue. How much of your IT channel selling strategy focuses on SMBs at the lower end of the continuum, with average annual revenue anywhere up to $3M, then $3-10M, and upward?
There’s considerable variation in what these SMBs look like and behave like. Incorporate these factors into your sales team’s strategy for targeting prospective clientele. Your people will become more focused and productive. Who is going to call on what size of company and, more importantly, why?
Business model and leadership personas matter more than size.
Your IT channel selling strategy must further define the SMB marketplace. Consider whether the prospective companies you focus on exhibit signs of an intelligent business model orchestrated and executed by an intelligent leadership team / persona. Otherwise your IT channel sales team will be wasting time and resources by only pursuing larger small to midsize businesses. You will overlook those companies where the breadth and depth of your own IT channel expertise can make a very big difference.
There are very small businesses (VSB) led by extremely savvy leaders who fully understand the need for and how to wield IT resources. These companies are extremely entrepreneurial and scrappy; they are not far from the startup mindset upon which they were founded. These companies, and their leadership team, are exciting to work with. However, they usually do not represent lucrative initial contracts.
Then there are nearly midsize businesses orbiting around $50M in annual revenue. However, your team may discover that the leadership team is heavily invested in historic infighting and legacy IT systems, processes and mindset. Decision making is continuously contested. No wonder these larger small businesses can’t manage to grow themselves to the midsize level.
Consider building a SMB portfolio.
Which type of SMB company will your IT channel selling strategy focus on? Be open-minded. The answer to the question? Evaluate SMBs of all sizes.
Consider building an SMB client portfolio in a manner similar to how venture capital firms operate. Assess each SMB thoughtfully and mindfully. Evaluate not only company financials, but business model and leadership team competency and temperament. Assess whether your IT channel selling strategy offers your portfolio clientele the capability of phasing in integrated solutions over time.
Ponder how your own company’s channel expertise will grow as a result of working with your well-thought-out SMB portfolio companies. Develop investment milestones. Evaluate the structure of your investment. Create win-win opportunities for your own company and each SMB company in which you, literally, invest.
Your IT channel selling strategy, business model and personnel will become more speculative and innovative in the process.
Babette N. Ten Haken is a strategist, analyst, author and blogger. Her focus: the interrelationship between teams, leadership and culture in technology and manufacturing. Her Workshops target excellence in the execution of strategy. Her Playbook of collaboration hacks, Do YOU Mean Business? is available on Amazon.com.