In recent posts I have looked at trends that directly impact broadcast technology vendors, including where vendors see their sales growth coming from over the next 2-3 years, and where vendors plan to open sales offices in the future.
Now let’s look at the go-to-market strategies of vendors — i.e. how do they sell today and how do they plan to sell in the future. As part of the 2009 Big Broadcast Survey, I asked approximately 550 broadcast technology vendors how they sell today — primarily direct, through distributors, or indirect — and how they predict they will sell in the future.
The results are summarized in the chart below:
Question: How do you currently sell?
In general, broadcast technology vendors prefer to sell direct where possible — 2/3 of respondents reported that they either sell direct or mostly direct, and about 1/3 of the total vendor respondents report that they sell broadcast technology products through a third-party on an indirect basis. Interestingly, these statistics are more or less the same for vendors of all sizes.
As a follow-up question, I asked vendors how they believe their sales approach will change in the future. The results are show in the chart below.
Question: How do you expect your sales mix to change in the future?
About half of all vendors surveyed expect to continue to with their current sales approach. However, it’s clear that vendors do intend to beef up third party channel distribution channels, through both dealers and systems integrators.
These results reinforce the findings presented in previous posts about where vendors see future growth and where they plan to open sales offices. For example, the majority of broadcast technology vendors believe that China will be the fastest growing region in the next 2-3 years, an average of 20%, and yet China ranks last in terms of where vendors plan to open new offices.
This indicates that as vendors look to expand geographically they will rely more heavily on 3rd party distributors and systems integrators to reach parts of the world where they do not have direct representation.
There is another factor that is undoubtedly contributing to an increased use of third party sales channels. Broadcasters, who have shed technical staff in an effort to cut costs, seem to be increasing relying 3rd party firms such as systems integrators to help plan and then implement complex facility expansion plans. In recognition of this, vendors must now sell to the end customer while courting the systems integrators who are bidding to win project work from broadcasters.
So while many vendors may prefer to sell direct (and plan to increase direct selling efforts in the future), there is no doubt that they must increasingly rely on dealers and SIs to reach a large part of the market.