Ring Up Storage Sales

As a successful VAR, you probably have plenty of long-term relationships with your customers. Clear your mind and think of only one of those customers. Think about that customer's entire technology budget for a given year. Now, how much of that budget did your company earn through sales, services, and consulting? Odds are, your company only realized a portion of your customer's total budget.

Why? There are plenty of possible answers to this question. However, the most common explanation is that your customer requires a product or service that your company does not offer. You might sell a storage solution to a law firm, but you do not offer the document management and imaging technology that the client also wants. You might sell point of sale (POS) equipment, such as cash drawers and pole displays. But, customers have to contact another VAR for radio frequency (RF) technology. In each of these cases, your company loses potential revenue.

Instead of sharing your customers' budgets with fellow VARs, you should be exploring ways to garner a bigger share of those budgets. Companies such as Xerxes (‘zirk-zeez) Computer Corporation (XCC) already know this. The Minnetonka, MN-based company rarely says no to requests from long-term customers. Founded in 1981 to sell used midrange and mainframe equipment, the company has grown to offer a range of services. In addition to its mainframe business, XCC now sells and integrates POS and RF technologies. The company also offers a software package to detect and deter employee theft in retail stores.

Long-term customers frequently start with XCC when trying to solve a technology problem. With the ball in XCC's court, the 48-employee company has a few options. XCC can attempt to solve a problem for a customer; or, XCC can help the customer find a VAR with the appropriate expertise. In most cases, XCC will choose the former. "There is nothing wrong with saying no to a client. But, it is often more important to say 'I don't know,'" states Peter Schrempp, VP, midrange group at XCC. "We have strong relationships with our clients. We might not have an answer to a problem today, but we will have one by tomorrow."

Solving customers' problems has led XCC to offer a range of technologies. Recently, the company added another arrow to its quiver. A large retail client needed a storage solution. Instead of contacting a storage VAR, XCC handled the job itself. As a result, XCC now has a new line of expertise to take to its clients. Integrating multiple technologies works for XCC, and it can work for your company as well.

Total Solutions Include Storage Systems
Like many VARs, XCC considers itself to be a solution seller. Selling complete solutions, however, can present many challenges to VARs. For example, most VARs don't have expertise in-house to solve every customer problem. Thus, the company either acquires the talent to get the job done, or it partners with vendors.

When a large retail store approached XCC about a storage concern, the VAR had only limited knowledge regarding potential solutions. The retailer had more than 100 stores nationwide, and each location wanted to store mission-critical data regarding sales and inventory. This data was so critical that it had to be accessible at all times - that means no downtime. "The storage solution needed to have fault-tolerant features, such as spare fans and power supplies," says Schrempp. "We had to find a system that offered high availability to data."

In this case, that solution turned out to be a redundant array of independent disks (RAID) system from Raidtec. This type of system stores data on hard disk drives, which allows fast access. RAID systems also store data redundantly on multiple drives. If one drive fails, for instance, the data can be accessed from another drive. The defective drive can usually be replaced without taking the system offline, and data is reconfigured on the new drive.

Because XCC had a relationship with this retail customer for more than 10 years, the client was willing to trust XCC to find a solution. XCC worked with Raidtec and the client's technical staff to configure the proper RAID systems. Seagate, which manufactured the hard drives for the RAID systems, was also consulted during the installation. When the installation was complete, XCC had the expertise and alliances to now offer similar RAID storage solutions to its other customers.

"What was presented to us as a problem, we looked at as an opportunity. This is a long-term customer, and every transaction with this customer has been getting larger. We have been growing with them," says Kelly Bennewitz, president and COO at XCC. "It was a lot of work to bring all the expertise together for this project, but it was definitely worth our while."

Build Around In-House Talent
While customers can prod VARs to take on new products and services, it is sometimes beneficial for VARs to be proactive. XCC did this 12 years ago when it began carrying a line of Fujitsu POS products. Instead of waiting for customer demand, XCC researched the market and hired a recent college graduate to run the division. The new hire continued the in-depth research of the market and found a niche where XCC could be successful. The company identified the customers and the types of products the market required. At that point, it was only a matter of calling on the prospects and pitching a POS solution.

At XCC, there is never a hiring freeze. The company is constantly looking for new employees who can add value. In fact, the company compensates any current employee who helps attract a new employee to XCC. "We hire people based on talent. We will place an advertisement for a specific position at the company. However, we might hire someone who is very talented but doesn't necessarily meet all the requirements of the posted position," relays Bennewitz. "We may, in fact, hire a talented person, build an expertise around that person, and then take that expertise to market."

Sell RAID Systems To Multiple Sites
Before XCC offers a new technology, the company must first determine if it will be a profitable venture. New products and services must either be sold into the current XCC customer base or expose XCC to new customers and markets. When XCC configured its first RAID solution, the company realized the best of both outcomes. Its current customers were interested in RAID solutions, and XCC could now take a solution to previously untapped markets.

In its initial RAID sale, XCC also learned a valuable lesson for future deals. The first sale was to a large retailer with more than 100 stores. This ensured that XCC would sell and install a RAID system at each one of the retail locations. Once the work was completed at a few sites, the systems could be smoothly rolled out to the remaining retail stores. "There is a learning curve in these types of installations. The technology is foreign to customers. They want to see a viable solution at a few sites before it is rolled out to hundreds of locations," says Schrempp. "If you are spending a lot of time on a sale and only selling one system, then it would not be very profitable. When you are selling hundreds of systems, then you can spend a little more time on the first few sites and not worry about losing money."

According to Schrempp, the key to these types of sales is to identify markets that require hundreds of similar solutions. In addition to retailers with hundreds of stores, XCC is also exploring the banking industry. Banks need data storage with high availability, and they also have many branches where similar solutions could be installed.

Market All Skills To Customers
XCC is a vastly different company than it was when it was founded 18 years ago. For the first six months of XCC's existence, the three founders worked out of their homes. XCC eventually formed relationships with its customers. These relationships offered problems, or opportunities - depending on your outlook. XCC chose to think of each challenge as an opportunity. "As our customers' needs grew, we tried to build on our current expertise and offer more complete solutions," says Bennewitz. "The majority of our customer base can use every product and service that we offer. We try to capitalize on this by cross-marketing our different expertise to each customer. It's more beneficial to us and to our customers."