How channel firms take ring-fencing customer bases from a defensive strategy to a high margin growth opportunity – by plugging portfolio gaps – will have far reaching consequences for their future success, according to industry thinkers at last month’s Comms Dealer Channel Forecast insight session.
Ring-fencing customer bases with a competitive advantage mindset – rather than just a defensive tact – will position resellers and MSPs for a stronger future, especially in the context of an ever-more rivalrous market environment, believes Simon Horton (pictured left), VP Sales – Europe, Sangoma. He warns that a high number of new entrants threaten to muscle in on traditional revenues, but predicts big rewards for resellers who fend off rivals through the expansion of their portfolio offerings. “Traditional resellers face a growing risk from rival businesses pivoting out of IT or print backgrounds or from vendors favouring a direct or agent model,” he stated. “The solution is for resellers to add unique selling points while leveraging existing expertise to maximise loyalty and value.”
Jamie Hughes (pictured left), Sales Director, Evolve IP, says that if resellers don’t have seven or eight different solutions in their portfolio they should consider what they might be missing. “Every gap represents an open door for someone else to sell into your customers,” he warned.
According to Ralph Mora (pictured left), VP & General Manager, EMEA, NUSO, it’s never been more important for the channel to identify gaps in their service offers and remain relevant. “However, differentiation is becoming more difficult due to increased democratisation and commoditisation, and the only way to build an alternative revenue stream is to cross-sell products and service offers,” he said.
Plugging portfolio gaps provides resellers with a springboard for high margin revenue growth while increasing customer stickiness, agrees Jason Uslan (pictured left), VP of Sales, Wildix. “There’s significant growth for resellers who get this right,” he stated. “Chasing and acquiring new customers can be an expensive venture, so first look at your own customer base and ensure you can service all their needs. Maximise the value of every customer.”
Raising ambition
Uslan also noted that partners would be wise to differentiate not only to protect their base but to be more ambitious. Mora echoed this advice, stating: “The challenge is not only to retain customers but provide them with additional value added applications and services that keep them loyal and push up ARPU.”
Mora identified the informal contact centre opportunity as a way for UC providers to add a high growth solution; and he highlighted that traditional resellers have an edge in this market due to their voice expertise. “Bringing enterprise technology down to the SME market by leveraging UC expertise is a high growth opportunity, especially while other providers chase and fight over larger deals,” he added. “The SMB market provides opportunities for impactful solutions and strong relationships.”
Horton also pointed up the informal contact centre opportunity as being key to growth. “One person sitting in an office is an informal contact centre, and as soon as they receive an external call they must deal with it in the best way,” he said. “The onus is on the channel to educate small SMBs, and traditional resellers have an edge with their voice expertise.”
Mora also observed that AI in the contact centre is a major opportunity if approached in the right way. “AI chat-bots can take the informal customer experience to another level while reducing costs to serve,” he added. “There will be different consumption models to be considered, but the resellers that get this right will drive the fastest value.”
A cautious approach to onboarding new services was urged by our panellists, who advised resellers to ensure that any new solution can scale and be repeated, and is not a passing fad in terms of customer demand. In this context, Uslan posited a key question for resellers to consider: “Is this something that’s going to just impact a small deal, or will I be able to take it forward and be empowered by my vendor partner to go out and sell?”
Horton noted that vendor selection is one of the most important decisions a reseller can make. And Hughes urged resellers to seek market insights from vendor partners and fully understand the portfolio benefits of their product pipelines. “Also, be proactive and look at how you are transacting,” added Hughes. “Cultivate a more bespoke relationship and take the things you need. Don’t just buy siloed solutions or you will be offering the same stack as every other one of their partners.”
Vendor support
Uslan observed that end users don’t just want a relationship with a local trusted advisor, they want to see a respected vendor supporting them. “The optics are stronger when a reseller has a vendor that will stand behind and support them with additional resources,” he added, also stating that these relationships should empower resellers to widen their scope and explore different types of partners and new verticals.
According to Mora, a more collaborative channel ecosystem could help resellers add depth and breadth to their offering, including people related developments. “Gaps can also exist around skill sets and education,” he said. “We’re going to see more of that collaboration even in the face of additional competition. We want to act as a matchmaker for MSPs who can mutually benefit from closer relationships.”
Filling gaps also enables resellers to craft personalised solutions, which is important as end users increasingly value consultancy-led relationships. “Ask open ended questions around the end users’ experience and find out how you can provide an impact on their day-to-day operations,” added Uslan. “This will lead to a more tailored product which is where you start to make a real difference.”
The provision of bespoke products and services will go a long way in helping resellers gain trusted advisor status, noted Hughes, who also advocates a dual-vendor strategy. “You can’t be a trusted advisor if you can only offer one platform,” he added. “And SMBs take more solutions from providers they trust which in turn reduces churn. Successful MSPs will focus on building value-driven and service-led approaches that prioritise customers’ needs over product sales.”