Achieve SMB Security Sales Success
This VAR shares the business philosophy itâ€™s using to produce 28% sales growth in the SMB network security segment.
The SMB segment is hot — especially for security software and services. How hot? According to Forrester Research, Inc., 37% of the SMB respondents say they will increase IT spending on security software this year. With a market opportunity like that, it might sound easy to succeed as a VAR selling security products to the SMB segment. However, if you ask Robert Siemons, CEO of Seattle-based Rain Networks, he'll tell you that it's been anything but easy. Rain Networks provides network security products and services — or 'total protection,' as Siemons calls it. At $3.2 million in projected sales this year, Rain Networks is not a behemoth. But, the 28% growth Siemons has projected for 2008 is impressive for any size VAR these days. The secrets to Siemons' success in the highly competitive SMB security segment are not really secrets at all. Instead, Rain Networks has mixed many common business 'ingredients' in a unique way to produce its recipe for success.
Ingredient #1: Build Stronger Partnerships
It may sound clichÃ©, but the first step in Rain Networks' success has been to build strong partnerships with vendors and customers. The key is understanding what Siemons views as a 'strong' partnership. "Our goal is not just to have healthy partnerships with our vendors," he explains. "We are always striving to achieve the highest level of certification our vendors offer." Rain Networks seeks out, and partners with, emerging technology companies such as Barracuda Networks early on. "We are one of only a few diamond partners with Barracuda," says Siemons. "That high-level relationship differentiates us and can give us a leg up in competitive situations by keeping us top-of-mind with the vendor [i.e. given top priority for leads]."
For example, a large Washington state government agency recently contacted BitDefender — another Rain Networks security vendor partner — to respond to a blanket bid. BitDefender recommended Rain Networks as its VAR of choice to respond because Rain Networks is a premier partner and because of the strong commitment Rain Networks has shown to the vendor. As of press time, Rain Networks was still awaiting the outcome of that RFP. "I believe that we are considered for these types of leads from vendors due to our seriousness about vendor/VAR relationships," adds Siemons. "When you invest the time and money required for certification on a consistent basis, you earn the respect of your vendors." Rain Networks has developed those types of high-value relationships with security vendors such as AVG, Barracuda, CA, ESET, eSoft, McAfee, Panda, Sana Security, Symantec, Trend Micro, and Watchguard — all with a strong SMB focus.
With Rain Networks' diverse palette of security vendors, it would seem that there may be some conflict when recommending vendors' products. That's not the case, according to Siemons. "We present the options — the strengths and weaknesses of each product — and let customers make the final choice," he says. "Although we are loyal to our vendors, we have no agenda when presenting their products. That is one way that we build customer loyalty."
Ingredient #2: Take Calculated Risks
"Strong vendor relationships are great, but they're not enough for us to be successful," cautions Siemons. "It's important to develop those same types of relationships with SMB customers." Oftentimes, Rain Networks establishes customer relationships by extending support to potential customers for free — a risky proposition for a couple of reasons. What if the prospect accepts your help and then buys elsewhere? Or, what if you are inadvertently setting the customer's expectation level incorrectly (e.g. they expect your help for free, forever)? That has not been the case for Rain Networks. In fact, Siemons says the company's philosophy of helping out prospects before they ever spend a penny has worked out well. He adds, "We take consistent risks with new prospects, and those risks have resulted in double-digit growth over each of the last six years."
In an example of how his risk-based philosophy works, Rain Networks offered technical assistance to a decision maker at a company with multiple locations with separate IT divisions. "He came to us asking about a firewall solution," explains Siemons. "We provided a full product comparison and a cost comparison, and we didn't invoice the prospect. The prospect was so happy with the assistance we provided that he put his name on the line and recommended us to the other 150 IT decision makers for the company located in multiple states. At that point, it wasn't about money; it was about building trust." As a result of those efforts, Rain Networks earned 10 times more business than if it had worked with only one location of the company — all because the VAR was willing to take a risk up front.
Learn more about VAR opportunities in layered security at: www.BSMinfo.com/jp/2954.
Ingredient #3: Use A Consultative, Old-Fashioned Sales Approach
One of the most interesting things about Rain Networks is how a company selling high-tech equipment and services still uses some fairly basic concepts to win business — concepts that seem particularly effective with SMBs. For instance, do your salespeople go through the local phone book to find new prospects? Rain Networks' salespeople do. They also employ other 'old school' techniques such as asking existing customers for referrals. "It's no different from what insurance agents do to get referrals," says Siemons. "We make sure our customers are satisfied. Satisfied customers should be happy to refer us another prospect. It's simple; we ask, 'Do you know of three other companies that may benefit from a relationship like ours?'" Siemons' salespeople all work on 100% commission. "They are truly independent franchises and have the responsibility to run their own businesses," explains Siemons.
Siemons has trained his sales staff to take a consultative sales approach — one that requires a deep understanding of the customers' business goals. That approach is a difficult one to master. "In many cases, it has taken us years to truly understand our customers' business goals," says Siemons. "The consultative selling approach is one of the main reasons that we are able to get the 25% to 30% margins that we expect on each sale."
Even when you do have a decent understanding of your customers' business objectives, you're not done. Consultative selling is a process that has to be an ongoing effort. The minute you lose touch with your customer, you take the risk of being expendable. For instance, what happens if you're working with a customer and don't get in touch with that customer for six months? In that time, your sales contact can leave the company — leaving you with no contact there. Perhaps the new employee has a relationship with one of your competitors. Now you are left out in the cold.
In that example, you could prevent the problem by establishing multiple contacts at your customer's organization. It's not good enough to have a strong relationship with one individual. It's important to have roots that run deep within all of your customers.
It's important to note that Siemons' recipe for success changes depending on the business situation. He also says that it's important to review your recipe as the business climate changes. For instance, Siemons is growing the segment of his business that offers managed services. That growth required a reevaluation of his customers' needs and Rain Networks' capabilities to handle managed services growth.
Whether you're selling security solutions like Rain Networks, or you focus on some other technology, it's important to remember that SMBs need your help and they are willing to pay for it. When you're cooking up your plan for security sales success, make sure to include SMBs in the mix.