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Colocation Strategies for Optimizing Services, Target Market Selection, and Remaining Competitive

10 Ways for Colocation Providers to Find the Right Niches and Avoid CommoditizationManaged service providers and colocation providers once operated in unrelated markets, targeted different clients, and performed separate services. Today, the lines continue to blur as colocation, enterprise hosting, private cloud, and managed services serve the same/similar markets.

Many colocation providers express difficulty staying on task, identifying the right clients and partners, and maintaining pricing power.

Join me at Data Center World on Tuesday, April 4th at 2:30 pm to learn how to provide managed services, assess your product/market fit, and get in front of today’s colocation buyer’s journey.  

My session 10 Ways for Colocation Providers to Find the Right Niches and Avoid Commoditization(part of the Modern Data Center Strategies track) will address strategies for analyzing your competition, identifying market opportunities, and positioning your colocation company for profitable growth.

Providing Managed Services

In the past, MSPs operated as outsourced virtual IT for small to medium-sized businesses (SMBs). Over the years, technology expanded the needs of SMBs, with more and more clients demanding services such as hosting, cloud, and colocation. Today, some MSPs even purchase wholesale colocation and sell retail colocation in an attempt to keep up with these growing demands.

Colocation providers’ typical SMB clients have faster sales cycles than mid-market and enterprise clients and require more profitable professional services. It can be beneficial for colocation providers to partner with MSPs. However, they should be selective and operate with caution, as MSPs notoriously execute weak sales and marketing strategies, and the two are hunting the same SMBs—thus, making them competitors.

Product/Market Fit

Product/Market Fit—otherwise known as PMF—describes the degree to which a product satisfies a strong market demand. Whether your colocation company has PMF can be determined by analyzing:

  • How accurate your buyer personas are
  • How well you know your metrics

Buyer personas are semi-fictional representations of your ideal clients based on real data and some select, educated speculation regarding demographics, behavioral patterns, motivations, and goals. Buyer persona research takes note of commonalities and trends observed in its data and uses them to create a fictionalized profile. These personas should be very detailed and well-developed, as they serve as a basic staple to several other sales and marketing strategies (will be discussed at length during my Data Center World session).

Buyer personas are excellent tools for colo providers to use because they help validate campaigns, delegate resources, and attract like-minded leads. They are also critical for aligning sales and marketing teams, supporting services and operations, and facilitating future investments in revenue growth.

You can also determine PMF by analyzing key metrics such as:

  • Average client lifetime value (LTV)
  • Average cost of client acquisition (COCA)
  • Average sales cycle length

Calculating these metrics can help businesses in the data center industry optimize their strategies.

Getting in Front of Today’s Buyer’s Journey

A buyer’s journey describes the active research process a prospect goes through when making a purchase decision. The buyer’s journey consists of three stages:

  • Awareness
  • Consideration
  • Decision’

The Awareness Stage describes the period in which a prospect is discovering a problem, opportunity, or goal and attempting to identify it. In this stage, buyers are researching to define their particular circumstance and rely on informative content to guide them through this phase. Content intended for prospects in the Awareness Stage should be educationally based, as they are seeking information to take them to the next stage: Consideration.

The Consideration Stage takes place after a prospect defines their problem, opportunity, or goal, and begins researching solutions to overcome/achieve their circumstances. In the Consideration Stage, prospects are weighing each solution to determine which best fits their needs. Content intended for prospects in the Consideration stage should also be educationally based, as prospects are still learning about their circumstances and considering various solutions.

The final stage of the buyer’s journey begins once a prospect settles on a solution and searches for the best vendor to meet their needs. Prospects in this stage are comparing vendors, prices, features, and more to ensure they make the best decision.

Content produced for the Decision Stage should be more product- and company-based. Content such as vendor comparatives, pricing sheets, testimonials, and trials are all appropriate offers to use during the Decision stage.

The average buyer is 70% or more through their buyer’s journey before contacting a sales professional. This reality makes it especially important for businesses to provide content at every stage of the buyer’s journey to ensure maximum reach among prospects.

The earlier an organization gets found, the more time they have to nurture prospects, gain their trust, prove their value, and guide their prospect’s buying process. Personalize content through buyer personas to attract qualified leads and create content for every stage of the buyer’s journey to optimize your marketing and sales strategies.

The Next Step

To learn more about how to provide managed services, assess your product/market fit, and get in front of today’s colocation buyer’s journey, join me on April 4th at 2:30pm at Data Center World 2017 for my workshop on “10 Ways for Colocation Providers to Find the Right Niches and Avoid Commoditization.” The session will provide comprehensive information essential to accelerating your sales cycles, generating new highly-qualified leads, scaling your business, and driving your sales, marketing, and revenue growth strategies.



Has your colocation business achieved product/market fit? Are you being found early enough in your prospects’ buyer’s journeys to matter? Let us know in the Comments below.



To learn more about effectively partnering with MSPs, achieving product/market fit, and how to get in front of today's buyer's journey, check out our webinar "How Colocation Data Centers Can Differentiate to Grow Leads, Revenue, and ROI."



Register for "How Colocation Data Centers Can Differentiate to Grow Leads, Revenue, and ROI" (Live Webinar)