IT decision-makers in industrial and SME sectors have a need for quick and simple, profound information regarding innovative IT solutions. Currently, however, the flow of information from the manufacturer to the end customer is “maximally fragmented”. Pervasive, comprehensive and high-quality information is a scarce commodity. From this time forward, there is a need for consolidated solutions – with distribution in the lead.
The challenge for manufacturers and end customers
When it comes to winning over the industry – and above all – the coveted middle class, manufactures are kept busy by a well-known problem: How do I get information on complex and heterogeneous solutions, which are possibly even caught up in the ecosystem network with other manufacturers, transported quickly so that I can gain market share early on? How do I get this over the levels of distribution and through the system houses to the target: the IT decision-makers? Moreover, so profoundly and precisely, that it is able to make a safe decision concerning the manufacturer’s offer. If it’s within the budget, it should then proceed effectively and efficiently.
This is a real challenge especially for early adapter situations, which push experienced specialists to their limits. This communication challenge cannot be seen unilaterally by any means. Bilaterally to the sales requirements of the manufacturer, IT decision-makers want the same for the end customer: namely, pervasive, comprehensive and high-quality information. It is ultimately their responsibility to gain, by means of their IT core competence, market advantages for their company. And speed is an essential factor here.
Development of the market
The role of distribution is constantly changing. Manufacturers have long recognized that distribution cannot stand alone as the vehicle for communication and information when the goal is to achieve a lucrative SMB market. When it comes to handling complex solution requirements, this is of particular importance. Push and pull factors, direct touch sales models and other tools are used to try to speed up communication as well as to promote sales and expand market shares. At the same time, an increase in efforts also tends to place more responsibility on the shoulders of the distributors; overhead and apparatus are simply too expensive. In addition, the amount of effort put into reaching this broadly based SMB market, which functions differently, has not been justifiable. The middle class is undoubtedly sought-after, but saturation and displacement are too high in the enterprise environment. Manufacturers are justified in making this required shift: Distribution has high potential, but it needs to follow the communicative path of manufacturer – distribution – system house – end customer. Below, some light will be shed on how this potential can be used in the future.
The MarCom role of distribution
In addition to parameters such as logistics, availability and price, MarCom belongs to the core competencies of distribution. It alone has access to the basis of selective marketing: namely profound sales-out data which specify the profiles of their buying customers. However, it is true that distribution still has some more tools available for use which will help it reach its full potential. These benefit not only the manufacturers, but are also advantageous for distribution itself. In the future it is, after all, not just about sales, new customers and dormant, but at the same time also about manufacturers expressing their confidence in certain distributors; thereby opening the fiercely contested budget wallet.
The chance for distribution to control solution orientated markets
The bilateral needs of manufacturers to move profound, high quality information quickly and also to receive it quickly from IT decision-makers, gives distribution, acting as “information intermediaries” or “node”, the chance to actively steer markets and lock potential. The key here lies in the MarCom-toolbox of distribution. More and more, it has been recognized that the tools of mass marketing in the form of banner ads, newsletters or promotional product boxes are indeed indispensable, but also that they can no longer be the answer to solution-oriented, bilateral communication requirements. This realization precisely calls for stringent synchronization of MarCom tools with these requirements.
Distribution must take a pragmatic approach to the adaption of information and communication with solution topics so that all manufacturer information from various areas is fully prepared. The aim should be to have this information portfolio serve fully and profoundly as the basic decision-making aid for the following stages of the supply chain. Let’s look at the example of “converged infrastructure”. Creating a data center includes differing individual solutions. There are a variety of technologies needed ranging from active components such as servers or storage, cable infrastructure with high packing density, emergency power supply technologies and precision cooling; to data center infrastructure management (DCIM) and data center management. Here, there are close dependencies between technical co-existences. This is due to the functionality of the whole system not being ensured through the purchase of a central product component, but rather through the cooperation of various actors.
Comprehensive information in terms of system houses and end customers
The preparation of these heterogeneous solutions is of equally high importance for the system house and the end customer. However, if you consider the current flow of information from the manufacturer to the end customer, it is “maximally fragmented”. There is simply no consolidated information approach. In other words: It is almost expected from the system house and the end customer that they find the (best) solution in an arduous process. More often than not, this leads to complex heterogeneous projects being implemented with non state-of-the-art technology – this is no longer sustainable investment protection.
It is worse for the system house: First, the necessary technological expertise itself must be acquired and built off of in relation to the project. Secondly, it must be compelled to wade through the sometimes complex jungle of certifications. The effort is therefore enormous.
Consolidated information as the basis of a profound investment decision
Imagine a portal solution to the topic “converged infrastructure”. Led by the distribution, manufacturers who are active in this solution area find their due attention here. The portal is used exclusively for the mediation of applications and solutions. In addition to the FAQs on the subject, there is the possibility to download trend and white paper, project implementations and solution oriented reference reports. The portal is based purely on technology and skills transfer – direct advertising is a no-go.
The portal’s biggest advantage is the homogeneous information it provides: ranging from the manufacturer to the end customer. All this without fragmentation. In particular, the content consumers can and should be the system houses and the end customers alike.
Such a portal – and here we come to end-to-end communications controlled by distribution – also offers system houses and integrators the possibility to participate in the subject with their solutions, or rather implementations. In the end, these have the most field experience and are the “best of breed”.
Conversion as the result of a continuous communication strategy
Apart from imparting concentrated knowledge and expertise the distributor provides not only a platform for knowledge, but also a stage for integration with many points of contact directed towards leads and thereby conversion as well. Using these approaches, the distributor is not only capable of controlling the business from end-to-end, but also of refinancing the communication model through the manufacturer.
The solution also provides a notable advantage: Under the distribution’s control, the model has promising approaches including purposeful knowledge transfer which can be spread more broadly and quickly in order to reach the SME market sought-after by the manufacturers.
Manufacturers – and this can be deemed for certain – hope for creative and intelligent communication approaches. The distributor with the most promising approaches will therefore be the one who can expect the biggest budgets in the future. Also certain is the realization that in the future distributors who continue to exclusively rely on their time-tested tools, lose out.
Paths of communication into the market
How we understand end-to-end-communication
Observing the market through the eyes of a manufacturer, one sees that there are, in highly simplified terms, two possibilities (bridges) to convey its information to the end customer. One of these end-to-end communication “bridges” is the transportation system through the operative business; that is the gradual communication from distribution, the system house to the end customer. The second “bridge” is the media. Similar to the operative business bridge, its function is fragmented, hence the push/pull configuration. Here, by stepping through the channel media to address specialized dealers and system houses as well as to play the keys of the trade press, which are directed at decision-makers in the ultimate customer group.
Similar to a non-continuous cross-media campaign, this fragmented way of communication has its afflictions: in particular, fractures and therefore communicative losses. Ergo the question: How can this end-to-end communication be performed without lose from fragmentation and therefore become more effective and efficient? The question arises then whether this end-to-end communication can be effectively and efficiently performed without lose caused by fragmentation.
For critics and the indecisive
One thing is clear: Such a consolidated solution thrives on high-quality content. It must be explicitly stated here that such content is the bread and butter of all manufacturer communication. Any way you look at it, it must be created or it has already been created – only with significantly higher costs. In comparison to communication with a clear focus, highly fragmented communications is fraught with even higher scattering losses and thus, more effort is expended to create content.
Of course, there are also the competitive relationships between manufacturers. Certainly, it is sometimes undesirable to be named in a solution environment with other market players. But let’s be honest: manufacturers require new approaches which make effective and efficient MarCom possible. So they must also be prepared for a rethink. Regardless how, IT decision makers obtain information for investment needs, which they will then closely compare. As an only drawback, this incurs significantly higher costs to the detriment of the manufacturer.
Such arguments cannot be reason enough for preventing a communicative paradigm shift. Too often, these arguments are encountered from a position of persistent comfort niches which absorb innovations of all kinds like a black hole…