Who Can Afford to "Educate" Small Business About Value of New IT, Communications Services?

In case you needed a reminder why channels are so important for sales of information technology and communication technology products, consider new research from
Parks Associates, which looks at spending on IT and Support Services for Small Businesses.

The study finds that small and mid-sized businesses, which have between one and 250 employees, spend only $90 to $150 per month for IT services, including server maintenance, virus protection, and backup services.

“SMBs rely heavily on computing devices, but their spending on IT services, such as network security, cloud storage and IT support, has not matched this growing dependence,” said Patrice Samuels, Research Analyst at Parks Associates. “

In part, that might result from the laborious effort to communicate actual value in a sales environment where the potential buyer is quite busy, generally not so sophisticated in terms of IT knowledge, and very conscious of value and price.

SMB decision makers who are familiar with the benefits of an IT service are more than nine times more likely to subscribe than decision makers who are unfamiliar with the service, says Samuels.

The issue is whether most channel partners, indeed at such levels most mass market sales efforts, can cost effectively communicate value.

In other words, how much time can a sales associate afford to spend educating a customer who’s spending might represent $100 incremental per month?

Can a sales associate even be an effective channel, under such circumstances? There is a reason small business generally is lumped in with “mass market” by tier one service providers.

The hard reality is that no tier one service provider can afford to spend very much on “educating” buyers in that space. The other problem is that a relatively low percentage of very small business owners are highly interested in buying new IT services.

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