In-Depth

One Hat or Many?

Can your IT services company be a generalist and a specialist?

• By Ted Dinsmore
• June 01, 2006

Why do many IT services companies targeting small and midsize businesses (SMBs) act as if they can deliver anything and everything to their clients? In theory, they may be able to do so, but it's a hard proposition to sell to customers. And it's even harder to differentiate your company from your competitors when you're promoting yourself as a "jack-of-all-trades" because the old adage's follow-on clause -- "and a master of none" -- is often closer to reality than that first part.

Too often, SMB-focused IT services companies that are struggling to win customers promise that they can provide any and all IT services. That approach may appeal to a few customers because it offers one-stop-shopping, single-point-of-contact convenience. Most, however, won't like it because it's not entirely credible.

Besides, if your IT services company is a Microsoft partner, you just have to be a master of something to get any desirable traction out of the partnership. That is, you have to be heard and seen as a specialist, although you may also have deep generalist talents. This principle applies both to success in the SMB market and to getting results from partnering with Microsoft.

As Edward O'Connor and I mention in our book Partnering with Microsoft, one of the Microsoft Partner Program's flaws is the need for companies to specialize to qualify for a competency. Obviously, Microsoft corporate views its partners as specialists rather than as generalists. In addition, Microsoft has a fundamental need to categorize its huge volume of partners. This need has evolved as the partner program has grown and become more sophisticated, with the latest iteration being the competency program. It's not only in Redmond that Microsoft thinks of partners by specialty -- the Microsoft field offices look at partners that way too. But in some ways, Microsoft's specialization requirements turn out to be a blessing in disguise for most partners.

Becoming a Trusted Advisor
To demonstrate the value of specialization let's back up and address some fundamental questions: What is the goal of being an IT services player in the SMB space? Is it to sell more products, whether Microsoft's or another vendor's, within a specific segment? Is it strictly bottom-line driven?

The better approach, of course, is serving as a trusted advisor to a set of customers, depending on your company's focus and expertise, where proven value can be articulated, demonstrated and extended.

Cross-selling offers a different message from "We can do it all," which simply doesn't make sense to most SMB customers with experience in buying IT products or services.

Assuming that you agree, let's take the questioning a step further. Because we're all somewhat driven by the bottom line, how do you reach your financial goals while maintaining and demonstrating your company's integrity to your customers? And how do you leverage your relationship with Microsoft, based on the same integrity, to reach those goals?

For those who might wonder how integrity got smuggled into the equation, raising the question could signal a problem with your fundamental vision. Showing your customers -- and your partners, including Microsoft -- that your company has integrity is paramount to winning, keeping and extending both customer and partner relationships.

Integrity boils down to a correlation between your company's capabilities and its messaging. Consider these guidelines and what they say about your SMB-focused IT services company:

• Corporate integrity: This means having everyone
  giving the same message, from your sales team doing business development to your implementation staff performing solution delivery.
• Market integrity: This refers to what customers see. Deliver what you promise; only promise what you can deliver.
• Profitable integrity: This results from the previous two guidelines, and it represents the Nirvana that every sales organization exists to reach. It involves achieving a trusted-advisor relationship with your customers.

If there's a disconnect between what your company says it will do for customers (sales) and what it can do and actually does (delivery and support), then you may have an integrity problem of the first order. Your customers are obviously the final arbiters, the benchmark, in this important inquiry. (See "Does Your Company Have an Integrity Problem?")

Assume that your messaging is a valid representation of what your company can and does deliver -- and thus that the critical elements of your company (sales, delivery, support) are aligned. If your customers agree, then your company is aligned with the market. Your company has integrity.

The next step is to chase after profitable integrity, or achieving a trusted-advisor relationship with your customers. Charles Green, author of "Trust-Based Selling," defines trust as "the elusive but essential basis for the most successful sales relationships." That definition is especially apt for the SMB market, where IT is often a big mystery and the person who unlocks it -- who makes it work -- is an essential and trusted member of the extended team.

Does Your Company Have an Integrity Problem? Consider your answers to these guiding questions to determine whether your business has integrity problems that may influence relationships with customers or Microsoft: Identify the problem: What is your company's message? For example, is it "We can do anything for a manufacturing company"? Or is it more specific, as in: "We can refine your ERP solution so that you can source raw materials, then manufacture and ship them in half the time it takes today"? Talk to your delivery people: What's their impression of your messaging? Do they understand it? Does it correspond to their view of what they're doing in the SMB market? Talk to your salespeople: Are they comfortable with the messaging? Are they aware of any inabilities to deliver to customers what they promised when they sold the services? Talk to your support people: Ask the same questions you posed to your delivery people. Are your delivery and support people on the same page? Talk to your customers: Are they aware of any oversell/under-deliver issues with your company? Consider using the Microsoft customer-satisfaction tool. It's useful to have a third party take the pulse of your customers. -- T.D.

Trust-based selling is simple. It's common sense. And it works. Following are some guidelines for thinking about the practice:

• Trust-based selling is rooted in four principles. Customer-centricity, medium-to-long-term focus, collaboration and transparency.
• It's not about "being nice." It involves using soft skills for hard purposes.
• A customer who trusts you is invaluable. Trust trumps product excellence, salesmanship and price.
• Trust begins with the sale. How you sell creates or destroys trust for the relationship in the future.
• Trust isn't a business process. The only way to be trusted by yourcustomers is to be trustworthy. You can't fake it.

Ultimately, trust-based selling can massively increase profits for seller and customer alike. When both those in your organization and your customers understand and agree upon who you are and what you can do, you're positioned to become a trusted advisor. From this happy position, you can look to extend your customer base.

Honing Your Marketing Message
So how can you get specific enough in your marketing message without shutting off potential sales outside of that highly focused message? The answer involves finding a message consistent with what your company does especially well in order to differentiate it from others. That's your specialization, the hook by which to catch customers. (See "Getting Microsoft's Attention.") Once you've aligned your company's message with its delivery and established your reputation in the market, you can cross-sell partner solutions within your customer base. And as you get to know your partners better, you can educate and leverage them on the cross-sell. For example, if your company provides Microsoft Dynamics AX (formerly known as Microsoft Business Solutions-Axapta) services and you also offer deep infrastructure skills in Microsoft Exchange, that's an added bonus to both your Microsoft partnership and to your customers because you can help them meet their needs on multiple fronts. (For more on Microsoft Dynamics, read "Getting Serious About ERP.")

The cross-sell can be extended to many levels and, in some cases, it can serve as your differentiator. But note that it offers a different message from "we can do it all," which simply doesn't make sense to most SMB customers with experience in buying IT products or services. And the jack-of-all-trades approach will get you nowhere with Microsoft.

Thus, the messaging is the important point. Once you've established your message, educate your employees on the precise focus. Typically, they want to be excited about what they do and to do everything they can to provide value to your customers. If your personnel are well-trained about what your company does and doesn't do, it will be clear to your clients -- and your partners -- and it will get their attention. When you are on a sales call and you acknowledge that there are certain things your company can't do, people tend to pay more attention to what you say your company actually can do. This is integrity in action.

Getting Microsoft's Attention As a Microsoft partner, it's critical to make sure that the company understands who you are and what you do. Getting the company's attention, though, is easier said than done. Anecdotally, the average Microsoft customer-facing person receives around 200 e-mails a day from partners as well as six to 10 voice-mail messages. Given that level of activity, how can you get noticed amidst all this noise? After all, these are the people you want to know about your services and products because they should be your additional feet on the street. To capture their attention, you need a highly focused message that's also short and sweet. Once you have your Microsoft contacts' attention, it's in your best interests to create your trusted-advisor relationship with them. Consider how not to get their favorable attention: the first thing that many SMB-focused IT services companies do is to ask their Microsoft counterparts, "Where are my leads?" That's a great question, but entirely the wrong approach. Put yourself in Microsoft's position. How would you react if a vendor called and demanded an answer questions like these: "Where are my sales from you? You resell my product. Where are you in delivering sales?" It's a bit insulting, isn't it? So how do you take this to a trusted-advisor relationship with Microsoft as you have with your customers? Consider these three steps for relaying your message to Microsoft: Introduce your company and its specializations succinctly: "We have a proven track record in XYZ." Emphasize your company's achievements and why they're important to Microsoft: "We are trusted advisors to our customers -- such as A, B and C -- that account for [a specific dollar amount] in cross-sales of Microsoft products D, E and F." Impressive names and numbers will capture Microsoft's attention. Make the pitch: "We're campaigning to develop new relationships with new customers in our core area of expertise in [a specific vertical or geographical area]. We'd like to work together with you on that." -- T.D

Now let's tie the discussion back to the Microsoft Partner Program and how those Microsoft competencies integrate with your messaging. If you create a trusted-advisor relationship with your customers, you can easily achieve the same kind of relationship with your Microsoft colleagues. With Microsoft, the relationship will be based on technical competency, sales strategy (that is, focused messaging), and the ability to generate references, which is the ultimate measuring stick for trusted-advisor status with your client base.

An educated customer won't buy from a vendor that says it can do this, that and everything else. Customers will buy from vendors who understand their business needs, provide concrete options with measurable returns and demonstrate capabilities for supporting those customers' solutions across their business-value lifetime. That's the point when the specialist becomes the generalist -- that is, when the IT-services company achieves the trusted-advisor role with customers and with partners and can sell both on an increasing array of services.

Achieving trusted-advisor status with your customers and your Microsoft counterparts is a long, complicated process, but because it's well worth the effort, I challenge you to consider it.