Channel Forecast: Setting a strategic course for 2024 and beyond

Taking responsibility for the future of your business and investing strategic time and effort into the priorities that matter most – such as differentiation, competitiveness, single-source supplier status and knowledge building – will be key to long-term success, according to panelists at last month’s Comms Dealer Channel Forecast insight session.

The factors and strategies that drive differentiation and competitiveness are becoming top of mind for a growing number of resellers, according to Jamie Hughes (pictured), Sales Director, Evolve IP. “Competition in the UK market is a lot more established with fewer newcomers, so differentiation among resellers is challenging,” he stated. “Therefore we are seeing resellers follow a dual vendor strategy, not just from a voice perspective but also connectivity and cyber solutions. Resellers are wanting to move away from market commoditisation while maintaining margins, increasing ARPU and putting more value into what they are selling, while pursuing alternative solutions and upsell opportunities.”

The comms channel is undergoing an unprecedented level of disruption, driven by digitalisation and to a large degree led by industry giants with influence, presenting resellers with another challenge in terms of achieving an advantage. “There’s a big evolution in the market around Microsoft and Teams,” stated Ian Dunstan (pictured left), Managing Director, Cobalt. “Microsoft is a big competitor selling direct, but luckily it is still not likely to get it right for the next year or so. You can’t fight Microsoft but working in synergy with it could give you a competitive advantage as a single solution provider. All small and medium sized businesses would rather have one person to talk to and a trusted partnership rather than a supplier relationship. That’s the key difference.”
Resellers should not be afraid to speak to their vendors to find out what they have planned for 2024, assess what they are seeing in the market and the solutions they are coming up with

Added to this mix, observed Paul Gibbs (pictured left), Head of Sales, VoIP Unlimited, is the challenge of securing revenue from each customer while ring-fencing client bases for the longer-term. “Some are doing the ‘did you know?’ exercise,” he stated. “Did you know we did this and that service? There’s nothing more infuriating to a reseller than a customer sourcing a product or service from someone else because they didn’t know their ICT provider could deliver. Engaging with all customers more closely so they know everything you do and driving that relationship is key.”

Hughes underlined the well used phrase that it’s more difficult to acquire new customers than drive revenue from existing ones. “It’s about understanding your customers, their processes, the tools they use and how they can be more efficient, rather than just selling to clients and revisiting them in around 30 months or six months before the contract renewal,” he added. “Are customers taking all of the solutions you provide? Is your customer part of a larger group? Are they a franchise? Do they offer international opportunities? These questions help to understand the customer better.”

Those fast growing resellers and MSPs supported by investment are enabling their business transformation through acquisitions, which gives them an advantage as a single source supplier. “We’ve seen so much acquisition in the market,” noted Gibbs. “We now have super-resellers providing a multitude of services. Smaller resellers understand that they need to maximise wallet share and shut the door, and are looking for vendors to create long lasting partnerships that enable them to provide all the services a customer needs.”

Selective partnering
Therefore a product and service portfolio assessment is crucial for resellers wanting to keep pace with their faster growing counterparts, but despite the need for a broader scope of products, Hughes advises that it’s not about having a greater number of partnerships, it’s about being smart and selective. “I would love every one of our partners to just sell our services, but in a competitive world that is not realistic,” he added. “If you have three or four vendors you are diluting the value of those vendors – but a dual vendor strategy supports the plugging of portfolio gaps.”

I want my team to have the same undiluted message around what we do, how we do it and how we conduct ourselves. We talk about our values the whole time

Navigating today’s challenges successfully will also enable resellers to better understand their own businesses, believes Dunstan, who says they should stick to what they know best despite taking a longer and wider strategic view. “Do what you’re good at and become what you are,” he advised. “Today, we see top comms people trying to lead as an IT business. But they are good telecoms companies, not IT businesses. If you’re really good at what you do, stick to that. If you want to evolve into a different marketplace, acquire a business or bring people on board with the skills. Doing it properly requires that focus.”

Dunstan’s approach has proved to be successful for Cobalt. “We’re a trusted provider and a one-stop-shop which takes the customer out of the marketplace,” he added. “This keeps the pressure on us as a supplier as we have to do as well as we can. I’m also king of the 30 day contract – this also keeps us on our toes and agile. We’ve grown, moved offices, expanded the sales team and are on a push towards the end of a ten year plan. And I’ve established eight core values using simple words and an explanation to support our culture. I want my team to have the same undiluted message around what we do, how we do it and how we conduct ourselves. We talk about our values the whole time.”

Purposeful strategies
Values and behaviours may also be determined by the markets resellers and MSPs operate in, observed Gibbs. “It’s important to develop more purposeful strategies, especially when tendering for certain projects that require commitments to ESG,” he commented. “If you don’t answer to public sector bids, it’s on you to decide what your values are and how you want your people to behave. It’s important for reseller owners to have that at the forefront of their mind, but having an ESG policy doesn’t keep the lights on every day. It’s about getting the balance right and the markets you play in.”

Having a clearly defined purpose and set of values inevitably builds trust with staff and customers, and shows that a business cares and contributes to society – all factors that are rising up the leadership agenda, along with business outcome improvements based on insights and operational excellence. “We realigned our core values last year and focused on knowledge building through initiatives like lunch-and-learns and levelling up across the organisation,” explained Hughes. “We are building on our progress this year while leveraging our vendors to learn more about their solutions and what they know about their competition. We’re also looking to be more data driven and better able to inform partners about what their customers are doing and the solutions that could support them.

We’re staring down the barrel of the 2025 switch off. It’s getting real and resellers need to help smaller businesses move to IP technologies

“Refining customer and partner experiences is also on our agenda, along with discussions with partners around APIs and streamlining the provisioning process. So for this year, the big themes are more knowledge and leveraging data. Resellers should not be afraid to speak to their vendors and find out what they have planned for 2024, assess what they are seeing in the market and the solutions they are coming up with. We have three launches this quarter – one around compliance and two around the customer experience. See what your vendors are doing.”

Perhaps there has never been a more important time for resellers to build greater trust with their vendors and customers to solve problems and challenges, especially in the context of widespread industry transformation, including the PSTN shut down. “We are staring down the barrel of the 2025 switch off,” noted Gibbs. “It’s getting real, it’s going to happen, and resellers need to help smaller businesses move to IP technologies.”

Dunstan added: “Resellers have two years until the big switch off, so focus on your base and get everyone on legacy comms onto new technology. We have no ISDN lines – they’ve all been moved – and I’m talking to everyone else’s customers who haven’t done that already.”

More points to consider...
We are a carbon neutral business. We didn’t set a deadline of 2030, we just did it, like everything else we do.
Ian Dunstan, Managing Director, Cobalt

Cloud has been the way of the world for a few years now. Having everything on an opex basis is good for the end user.
Paul Gibbs, Head of Sales, VoIP Unlimited

Be mindful of the younger generations as they want to work for a company that has ESG priorities in place. We have now appointed a sustainability manager.
Jamie Hughes, Sales Director, Evolve IP


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