A Little Business Sense

In this column, I often write about the latest technologies or vertical markets the channel could benefit from. But Business Solutions' editorial also covers business issues. Why? Because readers continually tell us they want help with hiring, selling, training, managing, etc. Their reasons vary. Some VARs come from technical or engineering backgrounds and have little business training. Others juggle so many different issues that they often lose sight of their everyday operational issues.

Sell Integrity, Not Product
I gained some perspective on business and the channel at the NSA Distribution 2002 Solutions Summit, January 23 to 24, 2002, in Long Beach, CA. NSA, a point of sale (POS) and data collection distributor, hosted a conference for its VARs and integrators to learn about the latest applications and technologies. Kicking off the event was a presentation from Peter Chan, director of IT for The Coffee Bean and Tea Leaf and former IT executive for the California Pizza Kitchen and Wolfgang Puck restaurants.

Chan shared with the channel audience his criteria for selecting technology suppliers. What Chan had to say was not earth shattering, but it is worth repeating. He examines a technology provider's credibility and reliability before considering price. "I want a supplier who will spend the time necessary to understand my business - not just force some solution on me," said Chan. "I need a company that won't abandon me after the sale." He sees IT suppliers as long-term business partners whom he can hold accountable if problems arise. Chan's advice may seem like common sense, but there are many technology providers that don't keep up the customer relationship once they've installed the solution.

Be A Consultant, Not A Reseller
Chan wasn't the only presenter at the 2002 Solutions Summit to provide recommendations on how VARs and integrators should position their businesses. Michael Gebb, a former VAR and now president of Specialized Business Solutions (Dillon, CO), a POS software company, preached to the channel the importance of selling its expertise - not its products. Gebb's talk was centered on how VARs and integrators can better sell service, but it had a larger message on how to conduct business like a consultant. He told VARs, "You're not selling hardware, software, or even solutions. You're selling your knowledge. You need to gain a customer's confidence in order to show them the value of your services." Gebb said VARs should present and price the installation and training of the solution together. The better trained the customer is, the more likely the solution will perform better and require fewer service calls.

He also recommended that VARs scale pricing to encourage prepaid service plans over incident-based service. These plans can be sold in blocks based on dollar value or on time spent on the service performed. Gebb added that VARs should schedule a complimentary service call before the service plan ends and offer a discounted renewal to the customer. He said a VAR should inform the customer in writing what its service plan does and does not cover, as well as keep detailed records of each service performed. This straightforward approach eliminates any confusion for the customer and adds to the VAR's credibility.

The tips Chan and Gebb provided all really boil down to professionalism. In today's Internet age where technology can be easily sourced from the Web, it's imperative that VARs and integrators differentiate themselves. Box-pushing resellers are long gone. The channel companies that will prevail are those that can display their undeniable value.