Competitive Advantage in the Email Hosting Business: Improving Win Rates and Profit Margins

By Marty Rini – VP of Sales and Operations, IDSync®

From a demand perspective, the hosting business is growing dramatically. As a result it has attracted many service providers to the Microsoft Exchange email market segment, each one offering a reasonably similar set of hosted services.

Given the standardized nature of software offerings, as a service provider there is a need to be ever aware of your competition, your unique value-add, and your own differentiators.

In the increasingly commoditized world of hosted Exchange, it is easy to get into a “dog fight” over who has the best data center and help desk until the sales conversation finally deteriorates into a lowest cost conversation.

In some cases, the unique feature can be very important but at the same time so mundane that it never even gets discussed. If you were selling a car, would you focus on the value of the fuel injector components? Probably not. But, at the same time, if the customer was aware they needed an injector and the dealer down the street sold cars that did not use injectors, you would have created the desire for a value-added feature while at the same time preempting your competitor, all without ever discussing price.

We find this many times when the subject of Active Directory integration, user provisioning, and metadata synchronization enters a discussion pertaining to email. If you don’t talk about Active Directory integration, customers may not realize they need or want it and, as a consequence, your sales staff ignores a potentially competitive differentiator that makes yours the offering to beat.

While there are many ways to create unique features and competitive advantage, in today’s market, single-logon, automated user provisioning, and automated synchronization with Microsoft’s Active Directory is a compelling proposition that can take a large chunk out of a customer’s daily operational costs and administrative efforts of working with an external hosting firm. Turning their problem into your competitive advantage will advance your cause and get you closer to the deal.

To gain this advantage, all you have to do is make it part of your standard sales talk. Even if your customer’s principal request is for Exchange email, if you lead with a benefit that you know your competitor can’t deliver, you can uncover a need and establish it as a must have feature. “Would you buy email that isn’t integrated to your Active Directory? Even if you don’t need it now, would you buy your email service from a firm without strong AD integration?”

If you include Active Directory integration in your sales talk and all your service offerings, including SharePoint and Lync (which is easy to do via the APS 2 bus), both your margins and your win rate are likely to improve - especially with larger size customers.

Good luck and good selling!

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Marty is a veteran of the computer services industry having served in service delivery, sales, and marketing management roles. He is currently working with Parallels service providers to improve competitive advantage and lower their customer’s costs of operations.

Posted on November 4, 2014 and filed under Guest Bloggers.