The small office home office (SOHO) segment is a growing market, as many people seek to survive a continued economic downturn by starting their own businesses. This is true of the world in general, but of South Africa in particular, where the majority of businesses are classified as small operations, says Anamika Budree, Sales Manager Branded Products at WD South Africa.
As a result, the SOHO represents a significant opportunity for the channel, particularly since vendors are increasing their offerings tailored specifically for this market. However, selling to the SOHO requires a different approach to corporate sales – this market is often price-sensitive and typically responds well to a more personal approach.
Adding value and building loyalty through relationships is therefore critical in leveraging the opportunities in the SOHO market.
While SOHO users do not have the budget or the in-house IT expertise of their larger counterparts, their technology needs are often very similar. This is particularly true of any storage and backup technology – data is the backbone of any organisation, no matter the size, and storing, accessing and protecting this data is essential.
Some small organisations still do not have the budget or the desire to invest in technology, however, the majority of SOHOS are highly educated as to available technology, how it benefits business and enables efficiency and so on. This means that SOHOs are, for the most part, following the same technology trends seen in larger businesses and in the global market.
Despite having similar needs, SOHOs do not have the same budget as larger organisations, and are typically far more cautious when it comes to making purchasing decisions. A significant amount of time is often put into carefully researching solutions to find the best one to meet both requirements and budget. Business owners are often personally involved in purchasing decisions.
This represents an opportunity for the channel – developing a relationship with a business owner and assisting them with making sound decisions can help to ensure loyalty, which can result in repeat business over many years.
Matching the right solution to the needs of the customer is key in catering successfully to the SOHO market. Exploiting these businesses by offering them the most expensive or most feature-packed solution when they do not need it will not create opportunities.
It is far more profitable in the long term to develop a relationship as a trusted advisor, which increases the likelihood that your loyal customer will recommend you to others, creating the breadth of customer base required. In addition, offering services such as ‘try and buy’ solutions can help customers to make those higher-end purchasing decisions, by reassuring them that the solution will work for them and give them the required benefits.
Creating bundled packages is another way of tapping this market – printers, notebooks, external hard drives, software and so on can be bundled together to create an attractive offering. If customers see that purchasing each solution separately will cost them more, they will recognise the value in such packages. In addition, products and services can be bundled together to create even more value.
For example, a SOHO may require a server, but does not necessarily have the knowledge or skill to support and maintain it. Calling out an IT company every time they need assistance can get very costly. Bundling the server with a service and maintenance contract can help to add value and cater to the needs of the SOHO segment effectively. It also provides the reseller with annuity revenue.
Helping customers to make the right technology decision is also vital, particularly with data storage technology. As much as 67% of small businesses that experience a major data loss event are unable to recover and close down within a year.
As a result small businesses are becoming increasingly aware of the need to protect data in order to protect their business. Network Attached Storage (NAS) and personal cloud options therefore present a significant growth opportunity.
NAS solutions for the SOHO, including 2-Bay and 4 Bay NAS, are more in demand than ever, offering high storage capacity as well as the ability to make use of RAID for more effective data redundancy and protection.
Customers also typically wish to have access to cloud storage, but do not have the luxury of the private cloud such as those utilised by enterprise. The public cloud is often not an option, as it is either not secure enough, or the cost per gigabyte makes it uneconomical. The personal cloud has therefore emerged as a solution.
This growing concept is being quickly adopted by SOHO and home users, offering the ability to centralise content and access it from anywhere without the security issues or expense of the public cloud.
While SOHO businesses are often very price conscious, relationships typically mean more to them than small savings when it comes to buying hardware and other technology. SOHO customers want reliability and affordability, but most importantly they want reputable brands from resellers they can trust.
By offering the right products and not taking advantage of the customer, and by offering services and solutions that will add value to a customer’s business, the channel will be able to leverage available margins in the SOHO market. If resellers take the time to build relationships and garner loyalty, and offer added value, then repeat business and referrals are almost guaranteed.
