Lead The Way Into Vertical Markets

Annual revenues of $75 million is a respectable amount for any VAR. It is even more commendable considering Lewan & Associates, Inc.'s (this month's cover VAR) origins were in selling desktop calculators. Today, this computer storage and networking company attributes its successes to teaching its employees to be leaders - not followers. This philosophy is easy for many companies to preach, but much harder to put into practice.

Promoting Leadership Pays Off
History provides us with many examples of successful leaders. Charles Schwab was able to develop leadership within United States Steel Company as its president. And he was richly rewarded for it. His boss, Andrew Carnegie, paid Schwab a salary of $1 million a year. Schwab earned $3,000 a day in 1921, when most considered making $50 a week a good living. Schwab often commented, "The greatest asset I possess is my ability to arouse enthusiasm among my people."

A Focused Business Is A Growing One
Lewan & Associates molds its employees into leaders by providing a focused vision, according to Dr. Lloyd Lewan, chairman of the board. Lewan & Associates also gives employees the freedom to promote that vision. However, focus is exactly what some VARs and systems integrators lack in their businesses. VARs and integrators move from bid proposals to installations, prospects to customers, and industry to industry. Many of them wake up one day to discover their business is headed in many different directions.

Too Many Markets, Too Many Problems
Advanced Systems Consultants (ASC) learned this lesson. The integrator attempted to serve the warehouse management system and data collection needs of a variety of industries. However, the "jack of all trades" approach eventually led to problems. ASC lost $80,000 on a bar code verification installation for an automotive manufacturer. The integrator had agreed to a fixed price for the project ahead of time and didn't predict eventual complications in-volved with the install.

Choose Vertical Markets You Know
ASC now concentrates its sales of warehouse management and data collection systems on two key markets (manufacturing and route sales/transportation). Sam Walton, founder of Wal-Mart, is a proponent of business focus. He often uses the old saying, "Don't re-invent the wheel. Choose a business you can understand and get behind it."

Concentrating on select vertical markets provides VARs and integrators many opportunities, including:

• Develop a greater expertise and reputation with an industry.
• Use customers within an industry as referrals for other prospects.
• Develop packaged technologies for customers within an industry that has similar requirements. Then, customize that package as needed by a particular customer.
• Sell additional, complementary technologies to customers within an industry.
  
  Verticals Provide Ongoing Sales
  Critical Technologies LLC, a document and image management provider, tackled a 200-site installation for a mortgage company. This large project was a little overwhelming, at first, for the integrator. But it helped gain sales to other mortgage companies and boost revenues to a projected $6 million.
  
  "The final test of a leader is that he leaves behind him in other men the conviction and the will to carry on," said Walter Lippmann, a philosopher and author of Roosevelt Has Gone. Have you instilled a strong market direction for your company employees to follow?