Many smaller companies focus on developing partnerships and selling their product only as an add-on to a larger original equipment manufacturer’s (OEM) integrated solution. This channel strategy is very prevalent in the healthcare IT world.
Systems vendors are always seeking to integrate new technologies into existing systems. Since no single company can develop all aspects of an integrated solution, this approach can benefit all parties. More importantly, it provides a better solution for the end user. And, as long as it is an ongoing effort, marketing helps both OEM and direct sales channels.
Companies of any size that enter a new or existing market with a new product must do several things.
- You need to make the market aware of the problem you solve.
- You must show the market that you solve the problem better than the competition.
- You have to illustrate how you have solved the problem for others.
- You also need to build brand awareness, value, and credibility.
A well-executed product marketing strategy should achieve all these goals.
Let’s take a closer look at three ways marketing helps OEM and direct sales.
1) Marketing should create awareness of the problem solved.
A primary role of marketing is to create demand within the market. A proven way to do this is to create awareness of the problem and its negative impact. Most organizations and individuals are unaware of problems that limit their productivity. Healthcare providers are no exception. When entering a new market, you must create awareness of the problem you solve.
Educating the OEM’s sales leadership and their sales force about the problems your product solves may be enough to secure a reseller agreement. But, it will not be enough to generate enough sales to grow the company and the OEM relationship. You need to coach the OEM sales department on how to raise awareness of these problems.
The bottom line is, if there is no awareness of the problem, there will be no market. Then, the business will suffer.
2) Marketing should create demand for the company’s solution.
Once you build awareness of the problem your product solves, it’s time to create demand for your solution. With enough demand, the OEM sales team, as well as the direct sales team (if one exists), can build an effective sales funnel.
The greater the demand in the broader market, the easier it will be for an OEM or direct sales team to succeed. Either you, as the new market entrant, can create this demand, or your OEM can. You focus more on the problem than the OEM. You understand the problem. And you understand how to solve it better than anyone. So, you are in the best position to use marketing to create demand. Present the benefits of your solution in your marketing. Then, refer interested customers to your direct sales team or OEM sales force to learn more.
One common challenge with the OEM sales channel strategy is that the partner story can get lost in the OEM’s bigger story. OEM sales reps often focus on selling the big ticket items and/or the “low hanging fruit” that are easy to sell. But remember that nobody knows your product story and marketing message better than people internal to your company. Don’t forget that the OEM is your partner, not your supervisor. You are in the perfect position to help the OEM marketing organization incorporate your story into their bigger story. Marketing for OEM and direct sales should make closing the deal easier for everyone.
3) Marketing should create awareness of the new company.
New companies in particular, have to end the inherent fear, uncertainty, and doubt (FUD) that hinder their efforts to generate new business and new business relationships. Even when there is a pre-existing relationship, the role of marketing for OEM and direct sales is to reduce FUD by providing evidence to the market that you can solve the stated problems. You also need to show how your ability to solve the problem is unique and better than your competitors’ ability.
Customer success with your product should be a cornerstone of your marketing. This is true whether in partnership with the OEM or through working with customers. Companies that pursue an OEM sales channel strategy often aspire to partner with multiple OEMs. Human behavior being what it is, once a company is known, liked, and trusted, other OEM’s will likely show interest in partnering.
In short:
While most early stage companies don’t budget enough for marketing, it is the marketing effort that can accelerate sales. This means you generate cash before it runs out. Marketing accelerates the awareness-building and demand generation processes described above.
It’s important to incorporate these processes into your company’s business strategy. Don’t leave them up to chance or put them in the hands of the OEM partner. Larger OEMs tend to move slower, so you need to do your part to grease the wheels.
