ENGLEWOOD, Colo.--(BUSINESS WIRE)--Arrow Enterprise Computing Solutions, a business segment of Arrow Electronics Inc. (NYSE:ARW), recently offered the following tips to resellers in managing their business, particularly in difficult macroeconomic conditions.
Additional guidance for resellers in managing their business, and comprehensive resources to help them grow faster than the market and faster than the competition is available at www.ArrowECS.com.
- Do not depend on product reselling as your only source of profit. Have other sources of profit generation that supports your businesses. Successful value–added resellers must add additional value to supplier offerings to ensure a predictable and profitable revenue flow.
"If I create my own service offering outside of the products, then I'm in a situation that I'm having a solutions discussion with customers, focusing on a particular methodology or service offering that I've designed," said Mike Strohl, president of Concord, Calif.–based Entisys Solutions Inc. and Agile 360, a division of Entisys. "It's a lot easier to sell products and services that way."
- Know your customers' total information technology spend and be aware of how the solution fits into the end–user's environment with a view to fully "clothing" the sale. For example, is there opportunity for additional software, accessories, printers or personal computers? Ask questions to ensure that you are maximizing your selling opportunity.
"Knowing the total IT spend is important, but you should also know and understand your customer's budget cycle and get into that process," said Strohl. "There is extreme power in being a part of that process. You know all their projects, what they can spend and where their money comes from."
- Focus on solving business problems for your customer – not just selling them product. Anyone can do that, and solutions automatically sell more product, and are less price sensitive.
"Compliance regulations such as HIPAA (the Health Insurance Portability and Accountability Act), the Sarbanes–Oxley Act and others are driving purchases around security solutions," said Jim Steinlage, president of Kansas City–based Choice Solutions LLC. "I'm also seeing increased interest in solutions that offer opportunities to work remotely."
- Leverage the resources of your value–added distributor. You are simply increasing your cost structure and making yourself less competitive if you don't take advantage of your distributor's resources and hire your own team.
"Nettitude has worked with the DNS group of Arrow ECS for a number of years. We are able to tap into the specific product knowledge of Arrow ECS' technical team and partner with their sales and marketing resources to deliver targeted campaigns and drive sales," said Martin Watts, sales manager for Nettitude, a security reseller based in the United Kingdom. "This close relationship has contributed to a 25 percent revenue growth year–over–year in security products delivered by Nettitude."
- "Focus on solutions that have a short-term return on investment," offered Steinlage. "IT decision-makers aren't into solutions with a two-year ROI right now. They are much more into the solutions with ROI of a year or less."
- Add as much service as possible. If a project requires skills you don't have, partner with your distributor or even another value–added reseller if necessary, but don't just leave the customer looking for someone to address their needs. It invites competition into your accounts.
"The smart VARs are the ones that know their own skill set – that can identify what they're experts in – and find other partners with other products and solution lines that complement their offerings," said Strohl. "There is more in that than what just seems obvious."
- Identify new customers. VARs must engage in marketing activities to find new customers. Without new customers, VARs cannot grow, and without growth they will fail.
"New customers are indeed the lifeblood of a business," said Dan Lowery, president of St. Louis-based Lowery Systems Inc. "Each year, we try to leverage the resources of Arrow ECS, such as its MPower program for the midmarket, or new service areas from IBM to identify new customers. The intent is to get new names, and grow with them. By using resources that are available to us through Arrow ECS and IBM, the cost to us is greatly reduced."
- Leverage supplier programs that protect margins. Supplier deal registration programs are critical tools for VARs to demonstrate and protect their value.
"I pay a dividend to train one person to track all certifications, rebates and sales promotion incentive fees," said Lowery. "By utilizing market development funds from various sources, we are often able to put on a first-class event at minimal cost."
- FOCUS! You can't be all things to all people. Know your value proposition, be able to articulate it and make sure your business is organized around it. It's never been more critical for VARs to have a value proposition and be able to deliver it. Communicate your value to suppliers and ensure your distributors are supporting that effort.
- "Know thy pipeline," said Andy Bryant, president of Arrow ECS. "You really have to get underneath the pipeline and ask, ‘is this project going to go or not?'"
ABOUT ARROW ENTERPRISE COMPUTING SOLUTIONS
Arrow ECS, a business segment of Arrow Electronics Inc. (NYSE:ARW), provides enterprise and midrange computing products, services and solutions to value-added resellers, system integrators, and independent software vendors. Based in Englewood, Colo., Arrow ECS connects its customers to the world's foremost technology suppliers, including HP, IBM, Sun Microsystems, EMC, NetApp, Hitachi Data Systems, and other leading storage networking, software, and security suppliers. Arrow ECS reported $4.8 billion in global enterprise computing solution sales in 2007. Visit www.arrowecs.com for more information.
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