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A couple of years ago, EMC faced a crossroad. Their storage market was growing rapidly – a good thing for the market leader – right? But the, market growth was largely driven by the SMB segment, where EMC had little presence. EMC was considered an enterprise class, direct sales solution – not a winning formula for the SMB market! Competitors, such as NetApp, dominated the SMB segment with great products and strong channel partnerships, and were winning market share from EMC.
In order to grow, EMC had to transform itself from an enterprise direct sales player to a multi-channel, multi-segment storage solutions provider. This was huge challenge from a product, messaging, brand, channel, and internal organization structure and company culture perspective. But EMC did it! After 2 years of planning, testing and changing, in 2011, EMC rolled out a new go to market strategy and succeeded wildly.
On Tuesday, 1/24/12, EMC announced stellar financial results. The key behind these results was EMC’s new, expanded and revamped channel programs.
Helene Barnekow, EMC’s SVP of WW Field and Channel Marketing, gave us the inside story at this month’s Business Marketing Association event.
The Winning Formula
According to Helene, the winning formula for EMC looks like this:
Market Opportunity + Right Partners + Winning Portfolio + Untapped Buyers
EMC grasped the magnitude of the market opportunity, but did not have the right customer understanding, products, marketing, channels and internal organization to tap into the opportunity. They had a lot to learn and faced an uphill battle to be successful. EMC began first by understanding SMB customers. Obviously, SMBs were not just “small” enterprises. They had their own unique needs, and EMC needed to “get them”. Then, EMC invested in developing the right product for this market and for the channel partners who would be essential to selling to these customers. “Channel First” became EMC’s mantra. New leaders were hired who understood the SMB market and its channel providers. Along with new product, EMC had to force itself to adopt a new marketing culture.
For Helene, marketing is all about the 5 S’s: story, simplicity, sizzle, sales and strategy.
EMC had to create simple, easy to understand messaging that would resonate with the SMB buyer, who was typically an IT generalist who had to manage all IT solutions for their company. They were not enterprise strategic CIOs, nor were they storage specialist in large IT teams.
(This advertisement has only 3 words. Imagine how uncomfortable the engineering team must have felt knowing all of the great technical capabilities inside this piece of hardware are explained by just 3 words).
EMC had to connect with SMBs and their channel partners with compelling integrated marketing – FUN and SIZZLING marketing – and change their brand perception from quality, performance and premium price, to quality, simple, efficient and affordable. A tough augmentation to the EMC brand, but one that was accomplished with marketing techniques that were borrowed from the B2C world – large scale events, fun contests, a branding campaign that showcased the mini-cooper as the new brand image, and a demo that featured the 11 year son of EMC’s CMO Jeremy Burton, that showcased the simplicity of using the newly launched SMB product line. EMC took this worldwide marketing machine and customized, where necessary, to meet local needs and also to allow local creativity to be showcased. EMC’s “no-longer-boring” marketing tactics drew enough attention to create 89 million impressions and generated over 27,000 marketing qualified leads, for channel partners. As Helene repeated often throughout her presentation, “When you’re working with partners, if they are successful, you are successful.”
EMC, of course, had to recruit the right channel partners win in this new market. EMC recruited 6600 new partners in just 12 months, surpassing their target of 4400 new partners. These partners were enabled to successfully reach and win with SMBs.
Organizational & Cultural Change
Direct sales are part of EMC’s DNA; the company has a world-class direct sales team. Trying to achieve a focus on channels and their needs was extremely difficult. EMC created a new organizational structure, hired new channel experienced leaders and took their matrixed organization structure to the next level by creating a dedicated cross-functional team to drive this initiative and drive it throughout the company. And with tremendous support from the CEO and CMO, they received the investment needed to stay the course and achieve market success.
Building a Channel Focused Company
So, how do you grow a $20B company into a $28B company in 2 years? EMC will tell you to focus on the channel first. If a product is successful in a channel model, it can be successful in a direct sales environment. Marketing campaigns designed for the channel route to market will work for direct sales, as well.
EMC believes in its channel and is betting on them. EMC just announced that they will ONLY sell directly to only 1000 accounts, worldwide (today EMC has tens of thousands of direct customers). Channel partners will lead all other accounts.
Questions to Consider
1) How can product marketing create “simple” messaging? How does one fight high tech company cultures that want to tell customers EVERY detail about a product?
2) What kinds of internal conflicts are caused by a strategy shift from direct to channel sales? Do you have personal experience with such a change?
3) What are some good ways to alter brand perception to gain access to an untapped buyer without negatively effecting current customers?