Addressing the Midsize Market: Avaya’s Three-Pronged Approach

The midsize business segment of the IT industry is growing faster than any other segment, but Avaya’s share of the market declined from 2002 to 2004. In response, the company created a Midsize Business Focus team led by Kevin Cook, Avaya’s vice president of North American Sales, to assess the right solutions for the midsize market, the right focus on the sales channel, and the proper organizational structure to support long-term sales success. This cross-functional team embarked on a multi-year, multi-step initiative to accomplish a wholesale change in how Avaya approached the midsize market.

Step One: Understand the Issues

Cook’s team knew that before they could implement change, they needed to understand why Avaya’s share of the midsize market was not on target with the company’s expectations. As they performed extensive research with both customers and channel partners, it became clear that gaps in Avaya’s solutions portfolio needed to be filled with value propositions that were the right fit for the midsize market.

Utilizing research completed by Avaya’s corporate marketing group, it became clear to the team that the midsize market needed to be segmented further into three sub segments:

• Basic communicators
• Mainstream communicators
• Strategic communicators

Interviews with Avaya resellers revealed that channel partners were comfortable selling Avaya’s solutions to the strategic sub segment of the midsize market, but didn’t feel that Avaya had the right offers for the basic and mainstream groups.

One of the short-term, stop-gap initiatives that the company implemented immediately was the Takeshare Program, a promotional pricing initiative that allowed Avaya to aggressively improve market position and test the input they were receiving from their channel partners—information that proved to be critical. The company attributes the success of this program to clear, honest, and focused communication with and from its channel partners.

To achieve a high level of valuable information, training its Avaya channel account managers was particularly critical. The managers were trained to discuss what Avaya’s position was in the midmarket, the company’s long term plans for change, and how the partners could use the program to win in deals where they typically could not compete. To ensure a clear and consistent message, Avaya’s channel account managers met with each of their partners to review the program, including specific examples of how to use the program to their advantage in competing to win customers through rebates and how to adjust pricing of existing Avaya offers to make them more attractive to basic and mainstream communicators within the midsize market.

The Avaya team then executed an aggressive marketing campaign around the TakeShare Program. The campaign was designed to inform Avaya’s channel partners of the company’s current position in the midsize segment and train Avaya resellers to pursue midsize opportunities that they may not have previously considered worthwhile.

Since its inception in early 2005, the TakeShare Program has driven in more than $150 million in incremental revenue.

Step Two: Build Midsize Solutions

Despite the success of the TakeShare Program, Cook’s team knew that, in the long run, they needed to create a portfolio of offerings that were built specifically for the midsize market, especially in the mainstream communicators segment. To meet the needs of this particular market, Avaya’s solution needed to have the right level of sophistication, but not the complexity that a small staff of IT personnel at a midsize company might find difficult to manage. It needed to be easy for the channel to sell it, and easy for customers to purchase and use it.

Again, Avaya called on its community of certified resellers for input. The result was MultiVantage® Express, a solution that integrates the company’s call processing software and Avaya Communication Manager, along with applications such as conferencing, messaging, mobility, and call center. It’s very easy to design—the purchaser only has to answer how many and what type of phones they desire—and all the applications are integrated into one server to reduce the maintenance cost and effort. Furthermore, implementing MultiVantage Express isn’t nearly as difficult or time-consuming as implementing an enterprise-level solution.

Avaya knew that properly marketing to the midsize segment was essential to success. To that end, it created a Website specifically for the midsize business customer, as well as a midsize-focused section on Avaya’s channel portal. The sites contain information, white papers, and demos. Channel partners can also find appropriate midsize reference customers and a Small and Midsize Positioning Guide, which helps them determine if a prospect’s company is a basic, mainstream, or strategic communicator and also helps them identify the most relevant Avaya offering.

Due in large part to the creation of the TakeShare program and MultiVantage Express, line shipments of Avaya’s midsize portfolio grew 17 percent from 2005 to 2006.

Step Three: Organize for Growth

To ensure that its focus on the midsize market remains sharp, Avaya created the Midmarket Solution team, with focused responsibility for this segment. The team’s responsibility includes end-to-end global solutions targeted at this growing and competitively-contested customer segment, including coordinating packaging, pricing, positioning, requirements, and go-to-market for the midmarket portfolio components.

In April 2007, the solution team’s efforts bore fruit, with the launch of two new applications:

• Avaya Customer Interaction Express, a customer contact application designed for midsize call centers of 20 to 100 agents.
• Avaya Meeting Exchange Express, a mid-level conferencing and collaboration offering that provides industry-standard conferencing.

Avaya’s three-pronged approach to addressing the midsize market has been very successful, with a significant increase in its midsize revenues.

“One of the best things about the experience,” said Jeff Koehler, Avaya Midmarket Channel Director, “is that we’ve reinforced our belief in listening closely to our channel partners. Partner input through the entire solution development process was vital to ensuring that these offerings speak to the market and meet customer needs, and we’ll continue to engage with our partners as we move forward with this critical market segment.”

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