Office Depot's Tenuto: 'Move Up the Stack!'

“Channel Partners who have been riding the wave of low-hanging fruit are going to be in trouble if they aren’t already,” warns Heather Tenuto, vice president of sales for SMB services at Office Depot.

Her advice: Channel partners should move the technology stack and think in terms of providing services not only to IT departments but to line-of-business owners as well.

If you didn’t know, Office Depot offers a wide variety of services to partners. Think of them as an opportunity to offload the low-level work that is no longer core to your business, allowing you to focus instead on far more sophisticated, high-margin services that embed you far more deeply into your customers’ business strategies.

Office Depot’s Heather Tenuto

“Technology decisions are being made by heads of sales and marketing,” Tenuto says. “You have to get up the stack where you’re helping those business owners make technology decisions which tend to be more complicated and require more integration and a little bit more support. Find your place there.”

Acknowledging that the transition to cloud computing has all but ended infrastructure technology sales, Tenuto suggests that there is more opportunity in helping customers select applications and platforms for higher-level business needs.

“Basic desktop support and security [aren’t] going to be your bread and butter for too much longer,” she adds.

Another challenge? Dealing with the growing number of small customers who have multilocation needs. They require far more sophisticated networks than what MSPs are accustomed to. But there is money to be made in handling their needs, Tenuto says.

Find Your Niche

“The way to survive in the channel is to find your niche,” Tenuto says.

That’s a familiar refrain to Channel Futures’ regular readers. We’ve all heard it said that you can’t be all things to all people, but the real point is that you don’t want to be. Much like the medical, legal and finance professions, the day of the generalist is fading. Specialists are on the rise.

“Pick your place where you can be the expert and own all the applications,” advises Tenuto. “By own, I mean be knowledgeable about them. MSPs who focus on legal startups or manufacturing come to know that space and can provide extraordinary support throughout the business.”

Tenuto goes further to suggest that your area of focus should be narrow. She also acknowledges that this is no easy task.

“You can’t throw a wide net and provide managed services to everything you catch,” she intones. The further challenge is that focusing on a specific niche or vertical market requires marketing, demand generation and sales resources that many smaller MSPs and VARs have never had to have before. Generating demand within a narrow niche requires far more sophisticated resources.

What to Throw Overboard

Another important step is to determine what commodity services can no longer be provided profitably. Too many partners hold on to these services, perhaps not realizing that they’re losing money on them. Instead of doubling down on these services, they should redirect resources to the higher-revenue, higher-profitability services further up the technology stack.

Tenuto, for one, points out that “overboard” doesn’t necessarily mean …

… firing customers. Her advice is to find resources with the economies of scale to continue delivering commodity services at a profit. Let others pay you a commission for those referrals. Most important, says Tenuto: “Find a partner for commoditized services that is committed to working with the channel.”

Partnering with Suppliers

Tenuto’s “chicken-and-egg” advice is to determine where your niche lies, then find applications and tools to help you win it. Don’t build your niche around a specific supplier or you may end up finding yourself unable to disentangle from them should you need to.

“You want to have more than one partner in your chosen space,” says Tenuto.

This also means that you’ll probably be addressing multiple needs in your niche, which expands your revenue opportunity.

“You want a supplier,” says Tenuto, “that has channel account managers (CAMs) that are invested and knowledgeable on how to help you run your business.”

This brings a deeper, more robust meaning to the word “partner.”

“That person is very different from a person who’s going to help you close a deal,” she is quick to point out. “As a supplier, it’s very expensive for me to provide both. Lots of overhead.

“You have to be very specific about what you need from those resources,” she adds, offering advice to channel partners when working with suppliers. “You always know what your business needs better than your CAM does. You should be empowered to ask for very specific help. Content. Identifying ideal profiles. Partners should be empowered to ask for that kind of help, but you have to prioritize because resources are slim. We can’t be everything to everyone but we can help partners who know where they need our assistance.”

On Being a Better Partner

Office Depot, Tenuto says, needs healthy partners, especially partners that are diversified.

Given that resources are scarce, it’s important to develop a strategy that emphasizes that your company is worthy of greater allocations. Tenuto values communication, feedback and transparency.

“We want to know that partners are not just being opportunistic, but are engaged with us — partners that really understand the solution,” she says.

Tenuto also prefers partners that match her financial investments with investments of their time and energy.

“We spend a lot of money on training; show me that you care,” she says. “Make investments of your time and effort. We like to see artifacts of engagement — regular meetings with your CAM, doing the training, asking for specific help.”