E-Commerce, Distributors Key to Cisco SMB Partner Push
Four Cisco channel executives detailed go-to-market changes they've made to capture rising small business technology demands.
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What is the average buyer persona for SMB?
Andrew Sage, vice president of global distribution and SMB Sales at Cisco, said the normal target is larger than a one- or two-person business. Often these companies employ between 50 and 250 people, Sage said. But even for the higher end of that group, he said the IT person is a generalist.
“Generally, it’s people who know the apps. There are usually one or two general technology generalists, and very rarely you’ll find somebody who’s focusing on security, which is why they lean so much on their partners,” Sage told Channel Futures.
And increasingly, these purchasers want to transact digitally.
Cisco’s efforts to reach the SMB market has included a push to bring these customers in through Cisco’s website.
Luxy Thuraisingam (pictured), Cisco’s vice president of global SMB and partner marketing, started in her role in 2021. She said her team took a look at the way SMBs were engaging digitally with Cisco. She said the data analysis revealed a bounce rate of upward of 60% for SMBs visiting the Cisco website.
“While they were finding their way over to the website, they weren’t staying. They weren’t hanging out,” Thuraisingham told Channel Futures.
Stephen Lawrence, who started in his job as head of global SMB and e-commerce marketing in 2022, said Cisco needed to reframe the content on its website for SMBs. While these business leaders were engaging on product-focused parts of the website like Small Business Product Selector, they needed a more relatable education piece, Lawrence said.
Simply put, they needed to know what products were best for them and how to buy those products.
“What we focused on in this reimagination was removing the noise and delivering what they cared about, focusing on simplicity and relevance,” he said.
And they’re seeing results. Lawrence said the engagement rate has tripled, while the bounce rate has dropped into single digits. Thuraisingham said Cisco reported 6,300 leads over a two-quarter since evolving the site.
This initiative started in the U.S. but has since moved to a global scale, Thuraisingam said.
Where do partners fit into the initiative to revamp Cisco’s digital platform for SMBs?
Lawrence (pictured) said a click-to-buy option shows a digital storefront with real-time display of the partners have possess the product in stock. With that option, the SMBs can purchase the product from the partner directly from Cisco’s website.
Thuraisingam said that new option represents the alignment of Cisco’s global e-commerce division, which Lawrence had been leading prior to 2022, with marketing for SMB and partners.
“It’s almost like the perfect marriage now. Taking all the amazing work that has been invested in developing that e-commerce engine and now bringing it front and center to that SMB audience and being able to track it,” she told Channel Futures.
Partners who don’t want to immediately click to buy can work with Cisco’s Virtual Demand Center (VDC), an inside sales unit the company launched in 2019. SMBs bring more complex, multi-product needs to the VDC, who will then work with a partner to close the deal. Lawrence said the VDC reported a year-over-year 100% increase in bookings.
Cisco is leaning on its distributor partners in a big way to make its SMB investments possible.
“We have a big bet running with all the distributors. And I can tell you, over the last years it paid off,” said Oliver Tuszik (pictured), Cisco’s senior vice president of partner sales and general manager of routes to market.
Sage said the alignment of SMB and distribution under his purview is unique compared to the midmarket and enterprise segments. Sage said 70% of the SMB business touches distributors. And that’s with the large distributors as well as smaller, more local ones, Sage said.
“They build up these scaling engines that give these smaller partners a chance to have access to all the information. They’re providing them not only help on the pre-sales, but they increasingly help them with more complex stuff, with SaaS offerings. They are helping them on services more,” Tuszik told Channel Futures.
Andrew Sage (pictured) said distributors are helping partners on lengthening their involvement in the customer life cycle. Some partners lack the size or resources to build the practice needed for Cisco Partner Lifecycle Services.
“Our distributors and become specialized in Cisco’s life cycle programs, and they’re using that specialization that they get to support partners who might be too small to make the investments in customer success or renewals managers,” said Sage.
The distributors can fill those gaps people-wise.
“Partners will say, ‘I’ve landed a customer. I need you to support me with a customer success plan and an adoption plan, and I need you to build me a project plan,'” Sage said. “The distributors provide people to do that work.”
Channel Futures has reported on the increased focus telcos are putting on SMB in 2023. And Cisco is reporting momentum with communications service providers around small business.
According to Sage, 15% of Cisco’s SMB revenue comes from telcos, such as NTT and Deutsche Telekom.
Tuszik said that while these providers offer essential resources to the increasingly SaaS/cloud focused world in their connectivity world, they are working to rebuild their business models to better scale. And for many of them, bundling with providers like Cisco is a key strategy to reach smaller customers faster and in larger quantity.
For example, Cisco at its recent conference unveiled new collaborations with AT&T. The partnership natively Cisco Webex onto the AT&T mobile network and can give customers a single number to Webex on an AT&T cell phone.
“We are helping them to bring their assets and our assets together and then activate their channel or even other channels,” Tuszik said.
Telcos’ attempts to reach SMBs with bundles invariably includes digital sales platforms and marketplaces.
Moreover, AT&T announced a self-service option for SMBs to procure AT&T Business Wi-Fi with Cisco Meraki. Tuszik said the service providers need to employ quick touch models like that.
“Creating this digital, self-service, highly automated motion is key for this segment, which doesn’t have the time,” Tuszik told Channel Futures. “And by the way, if we would do a full coverage sales model, the margin would not work for our business.”
Telcos’ attempts to reach SMBs with bundles invariably includes digital sales platforms and marketplaces.
Moreover, AT&T announced a self-service option for SMBs to procure AT&T Business Wi-Fi with Cisco Meraki. Tuszik said the service providers need to employ quick touch models like that.
“Creating this digital, self-service, highly automated motion is key for this segment, which doesn’t have the time,” Tuszik told Channel Futures. “And by the way, if we would do a full coverage sales model, the margin would not work for our business.”
The Cisco SMB segment is growing fast, with a combination of distribution, strategic partnerships and digital platforms fueling the rise.
Cisco has touted its SMB growth in the last year, calling it the fastest growing business segment in the company. The movement aligns with a larger shift that’s occurring among down-market IT purchasers. Namely, those small and medium-size businesses see their need to invest in technology. The demand for digital transformation no longer sits at just the large accounts, said Oliver Tuszik, Cisco’s senior vice president of global partner sales and general manager of routes to market.
Cisco’s Oliver Tuszik
“No matter what size of business you have, you need to have a digital business model,” Tuszik told Channel Futures.
Cisco SMB Push Called for Changes
But the shift to serve more SMBs has required significant changes at both the product and go-to-market levels. The vendor spent much of its recent Cisco Live conference pitching itself as a simplified provider of technology platforms.
Cisco’s Luxy Thuraisingam
“Our biggest opportunity is to simplify how we engage with our SMB customers,” said Luxy Thuraisingam, Cisco’s vice president of global SMB and partner marketing.
And on the go-to-market side, Cisco has embraced new tools, pricing and partner strategies. That includes a refreshed approach to driving leads from the Cisco website.
Sixty percent of Cisco SMB revenue comes from traditional VARs and SIs, but another 20% comes from MSPs and yet another 15% comes from communications service providers, according to global distribution and SMB sales lead Andrew Sage. Finally, five percent comes from e-commerce. In the meantime, distributors are working closely with many of those aforementioned partners.
Several Cisco executives detailed how the company going to market with partners to reach SMBs. They detailed the expansion of digital platforms, distribution relationships and telco partnerships.
View their commentary in the seven slides above.
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