The Regional Edge

In my last post, I shared how I saw strong advantages with service providers who were coming from a strong vertical, or industry-specific perspective.

But they are not the only ones who are doing well -- I could also make a case that the regional SP model is doing quite well, thank you very much.

And there, the advantage seems to be an unbeatable one -- the ability to establish trust and confidence.

It's Simple

We all tend to do business with people we trust. 

If we're talking external IT services -- especially newer ones -- the mechanism by which trust and confidence is established becomes an important matter of overall business strategy, especially for IT service providers.

In my last post, I presented the case for establishing trust through vertical and/or industry expertise.  But that's not the only mechanism available.

Because, at the end of the day, we tend to like to work with people who are local to us.  It's easier to get to know them, easier to work with them, and -- ultimately -- easier to give them the business.

Where This Started For Me

I first noticed this phenomenon when traveling to Australia and New Zealand several years ago.  The SP market was well underway and rapidly maturing.  All the usual concerns around "security" and "availability" and "control" weren't in play as far as I could see. 

People were just getting on with it, so to speak ...

So, I started asking questions as to why things were apparently different in this part of the world than others.  And I got some interesting answers.

The first was simply technical.  ANZ is separated from the rest of the world by some pretty long and expensive network pipe.  As a result, any IT service that could be delivered locally would have some inherent advantages vs. ones that were not.

The second was more cultural.  These are not countries with enormous populations.  As a result, you've got tightly knit business communities where people tend to know each other -- if not personally, certainly by reputation.

The Lens Expands

So, I started looking around where some of the same dynamics might start to play out -- if not technologically, than certainly culturally.  And I found all sorts of SPs getting into the market.

Think South Africa.  Central and Southern America.  Canada.  The Nordics.  Central Europe.  France.  Portions of the Middle East.  The list goes on and on.

If you're in the market for IT services, which would you prefer?  A provider in your country that speaks your language and is part of your business community, or some entity from another country?  The advantage here should be obvious, if you think about it.

Even in a large market like the US, there are all sorts of regional pockets.  The South.  Central US.  The Pacific Northwest -- and so on.  Even though we're ostensibly one, big happy country, there's always a preference to work with people who are seen as local and part of the community.

How Is This Translating?

I'm finding all sorts of regional service providers who are offering a broad swath of generic IT services to their local customers.  They get business using local contacts and a lot of face-to-face time. 

They're the "local guys" ... and they play it much the same way a regional bank might -- offering better service and more personal attention.  Their customers aren't the big enterprise IT shops (although they're starting to get some traction there as well), but typically the more modest regional companies that need high-quality, low-cost IT services.

From an offer perspective, they also are starting to think in terms of "stacking" their offers.  Once they've got a happy customer (the expensive part) they turn around and figure out what else those customers might need.  This is in contrast to attempting to use new offers to get new customers -- interesting, but a more challenging proposition if you think about it.

And their businesses appear to be growing, and growing.  That's a wonderful thing.

Establishing Your Circle Of Trust

So much of IT marketing -- and IT services marketing -- is all about cost reduction.  For me, that's what you talk about when you have nothing better to talk about -- being cheap.

The more I work in this space, the more I realize that successful SP models are all about establishing trust with your clients and prospects.

I think there's a strong case for a vertical model that establishes trust.  In this post, I've explained my arguments for using a regional approach to doing the same thing, albeit with different offerings.

And I think there are a few more "circle of trust" models out there that I'll discuss later.

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