Four channel trends for 2019

Next year is going to be the year of the customer, says Greg Lalle, senior VP of International Sales and Strategy at ConnectWise.

Johannesburg, 14 Dec 2018
Read time 6min 20sec
Greg Lalle, senior VP of International Sales and Strategy at ConnectWise.
Greg Lalle, senior VP of International Sales and Strategy at ConnectWise.

The Everything-as-a-Service (EaaS) model matured over the last few years and will come of age in 2019. This year, the biggest differentiator in the channel was service providers' ability to support customers' demands to consume any technology they wanted, when they wanted it, and how they wanted it.

Gregg Lalle, senior VP of International Sales and Strategy at ConnectWise, says 2019 will be the 'Year of the Customer'. This year, the differentiator will be in managed service providers' (MSPs) and value-added resellers' (VARs) ability to extract and learn customers' needs, and how they leverage technology to help solve customers' problems.

For Lalle, four trends will shape the channel in the new year, and they all have one thing in common: customers.

Trend 1: Security will become big business

Cybercrime is worth more than the global trafficking market, says Lalle, making automated managed security services a massive opportunity for MSPs.

"We're talking organised crime on an exponential scale. It's a threat to every business. Yet, much of the security function is still manual. With the growing cyber security skills gap and increasing demand for security solutions, MSPs need to start thinking more about automation," says Lalle.

Building deep expertise and services around security can help MSPs create "massive competitive advantage", he says, adding that every MSP should offer security services.

"Most MSPs only offer basic security services, like email encryption, spam filtering, anti-virus software, firewall management, device management, disaster recovery, and help desk. But the real value lies in advanced security services, like password protection, single sign-on and disk encryption capabilities, combined with multi-factor authentication, cyber risk assessment, vulnerability scanning, intrusion detection, and security awareness training. There simply aren't enough MSPs offering these as services, and the skills gap is widening."

Trend 2: Tighter alignment

There's pressure on the channel to manage technology, compliance, security, customer engagement issues, managed services, and support. Often, they have to do all this with fewer resources. This should sound familiar to most internal IT teams.

"With IoT, AI, and cloud services pushing us back to a decentralised environment, it will be critical to establish proper infrastructure and, more importantly, security down to the endpoint. It will be nearly impossible for both internal IT and MSPs to be all things to all people," says Lalle. "We're already seeing tighter alignment between what MSPs and VARs want, and we're seeing the same alignment across the SME and SMB markets."

Companies will get closer to achieving the elusive business-IT alignment, which makes it easier for IT to respond to changing business goals and customer demands. But partnerships will be crucial to success, says Lalle.

Trend 3: Customer-driven KPIs

"Business is changing in terms of how we support our customers," says Lalle. "Organisations should see this as an opportunity to meet and exceed customer expectations, thereby winning over new customers, while creating loyalty with existing ones."

The biggest challenge - and opportunity - for the channel in 2019 will be identifying and delivering services to customers in the most profitable way for the organisation, says Lalle. "In order to understand the customer journey, organisations need to define a repeatable methodology to ensure they understand the entire lifecycle, from creating market awareness, all the way through to billing and retention."

Equally important, he says, is understanding the impact of customer churn on the business and its bottom line. "Understanding churn trends - and frequently evaluating them at least quarterly, if not monthly - will help businesses to understand what steps they need to take to reduce churn and accelerate growth."

He says organisations should move away from traditional success measures, which focus on upfront revenue and bookings, to more customer-driven KPIs. Like helping customers to save money, helping them to learn new and emerging technologies, and building partnerships and relationships with their businesses.

"Customers want to feel supported. They want to know that their IT partner is aware of their goals and is continually working with them to adopt technology that will align to support their business. Moving to a customer-driven KPI model will ensure the adoption of technology, satisfaction, retention, and an upsell/cross-sell methodology," says Lalle.

Trend 4: Focus on differentiation

Whether a business manufactures software, produces software for the channel, or provides services to the end-user, Lalle says differentiation will be key if they want to appeal to customers - especially if everything goes to as-a-service.

"There's a shift happening, from supporting technology, to supporting the business through technology. We're beginning to see organisations switch from selling traditional technology, to selling business outcomes. And because technology is moving to a customer service focused industry, this is where businesses can differentiate themselves," says Lalle.

He adds that the channel has never been more vulnerable because anyone can replicate their services in the cloud and offer services using off-the-shelf solutions. "The differentiator will be in the education that MSPs and VARs provide their customers, as well as the level of service, the professionalism, the communication and soft skills, the relationships, and focusing on customers' success. That becomes paramount."

People want to deal with people, he adds, which makes interpersonal skills, strong written and verbal skills, and the ability to relate to customers essential. "Experience should also include the ability to link IT systems to business objectives; knowledge of technology trends likely to impact the customer; a firm grasp of IT project planning and management; understanding strategic planning, and experience with IT budgeting."

Trend 5: Balance between digital and traditional marketing

With technology becoming more pervasive in people's lives, Lalle believes that traditional marketing will not have the same reach as digital marketing. "There needs to be a well-balanced attack."

He advises businesses that don't have much experience in digital marketing to partner with vendors who have partnerships and expertise in this area. "As with all digital technologies, marketing also changes rapidly. One only needs to look at the constant changes to Google's search and targeting algorithms for evidence. Unless digital marketing is something you do all day, outsourcing to a partner who is on top of the trends and is familiar with the nuances of the different social media platforms will free up a business's time to focus on core activities."

This, he says can be balanced with traditional marketing, like picking up the phone and calling prospects, which goes a long way towards building relationships.

"When the customer signs the quote, it's only the beginning of the sale, not the end. The days of over promising and under delivering are over. MSPs and VARs must meet customer demands and deliver on exactly what they promise. Continually check customer service and adoption and give customers a chance to provide constructive comments or feedback - then act on it. Customers leave quietly, and it may take years to win them back, so be sure to nurture the ones you have."

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