Seven Steps to Becoming the Perfect VAR

By SmallBusinessComputing Staff | Posted April 01, 2000
by Rivka Tadjer

When it comes to how small business owners feel about VARs, you can call any market research firm in the industry ­ or any average small business owner, for that matter ­ and they'll give you the same answer: They're skeptical at best about the service they'll get.

The problem is that small business owners know all too well that VARs are more accustomed to catering to the needs of large corporate customers. Their underlying feeling is that because they're running smaller businesses, with less in-house technical expertise and smaller budgets, they'll get the shaft when it comes to ongoing service because VARs will focus on their big-ticket customers.

Now, no one is saying that this perception is invariably true. But perception is reality as far as public opinion goes. So bear in mind that it's a mindset you'll have to deal with ­ and dispel ­ if you want to make the small business market part of your mainstay business. And as this market grows exponentially over the next few years ­ from today's number of 8 million-plus small businesses in America to perhaps twice that number over the next decade ­ it may behoove you to go after it.

So what will it take to win over small business owners? You should be aware that they have problems and challenges unique to the size of their businesses, and because of this, they require a special breed of help. That's your cue. The key is understanding specifically what they need ­ and presently can't find ­ and then offering the right solution.

Here are seven ways that VAR-related services can help small businesses, as well as methods to go about providing solutions, according to VARs who have managed to foster successful relationships with small business owners.

1. Take Care of Everything, Including Internet Access.
Small businesses do not have the human resources to negotiate with a host of vendors ­ not for the purchase process, and certainly not for the ongoing maintenance and administration headaches technology inevitably triggers. They want one-stop shopping and one-stop service.

You've heard this before, certainly, but the ante for what one-stop shopping means has officially been upped. It's not going to fly anymore simply to agree to fix their Windows 98 software glitches when something goes wrong, or to suggest an Internet Service Provider.

As small businesses are upgrading their simple networks and branching out into electronic commerce ­ in terms of both business-to-business and business-to-consumer purposes ­ they require solutions that are tailored to their vertical industries. That means you're going to need a variety of very specific expertises.

And that in turn means, without question, a host of brand new strategic partnerships, says Bernie Roemmele, chairman and CEO of Citx, a Quakertown, Pa.-based VAR that specializes in electronic commerce. "We may only have 40 employees to try and service a variety of industries, but we do it by partnering for vertical markets," says Roemmele. "We even have a board now devoted to fostering these partnerships."

Roemmele's strategy is to slice vertical markets horizontally. "What this means is that for accounting firms, we have partners who cater to small individual accountants, as well as partners who are used to installing systems at accounting divisions of larger companies," he explains. "That way we keep up with very customized needs."

In effect, Roemmele says that instead of having 40 people on the job, he has 32,000 if you count all the strategic partners. And no, that's not a typo.

How did he manage to foster these partnerships? "The key was to look at some of these large manufacturers and service providers and identify a problem they had in marketing their services to small businesses," he says. "Then we show them how to make what they offer a component of our small business solution."

Here's an example: Roemmele caters to small health care and financial services businesses. NCR, a major datawarehouse provider for megacorporations, had a shrink-wrap sensibility that was geared to banks and insurance companies, which are able to spend millions on a datawarehouse. They had nothing for the 10-person financial consultancy or small doctor's office.

"NCR didn't even see how a smaller business could use their technology," says Roemmele. "So we showed them how to divvy up a huge datawarehouse system and make a little data mart on the Internet, which they could sell access to for small businesses." By using an ID and password, and by paying a fee, small businesses can now access enormous data repositories without spending millions. And NCR earned revenues from a market segment that wasn't even on its radar.

Essentially, Roemmele created a solution that allowed NCR to compete with IBM's small business solutions for datawarehousing in those industries.

Strategic partnerships such as this one open up new worlds of ideas about how to service small businesses in unique ways. You'll get loyal customers and high-profile partners that will steer business in your direction.

2. Speak Many Tongues
One of the things you must learn from your strategic partners is industry-specific lingo, so you can relate to small business owners. "And almost as important is to speak in different tongues to different executives," says Roemmele. "For instance, CEOs understand business processes, while marketers understand communication with the outside world."

Explain technology to a CEO using an analogy that makes sense to him or her. Use a different one to ring a bell with the marketer. And in all cases, make the examples absolutely relevant to their own vertical industry. Never speak about customers in general. If you're talking to partners in a doctor's office, don't go on about customer service applications. Talk about how the right network-integrated phone system can forward emergencies more efficiently by forwarding the patient's history along with the phone message. Make the picture crystal clear.

3. Offer Ongoing Maintenance Contracts and Warranties
Everyone knows this truism: Technology will falter and clients will get frustrated. Don't let yourself be dealt into the blame game. Tell small businesses up front that part of the cost of buying technology systems is the ongoing maintenance contract and warranty on the work.

"Small business customers only look at a certain portion of the picture­the hardware they need right away and a limited number of services," says Susan Labandibar, president of Computer Warehouse, a reseller and service provider in South Boston. "They don't consider that warranties and maintenance are key to a smooth operation."

Labandibar targets small businesses without in-house tech support. "So I have to make sure they understand they want an on-site warranty," she says. "I talk to them about it at the same time I explain how disruptive downtime can be when you rely on technology to run the office."

Labandibar offers different types of ongoing service contracts. The basic one is a standard on-site warranty that includes protecting the hardware. The other contract includes prepaid information technology services. So far, 20 percent of her small business clients have bought the prepaid contract, according to Labandibar.

4. Offer All Customers a Single, Dedicated Sales Rep for Their Company
Want to hear a small business owner launch into a diatribe about what's wrong with VARs? Ask one who hired a VAR but didn't get a dedicated sales rep to field phone calls. Small business owners have no time, as a rule. Nothing makes them more furious than getting the runaround on the phone, or having to explain their situation ­ including the entire chronology of their technology saga ­ to a different person every time they call.

"It's key for small business owners to have a single person taking care of them," says Keith Josephson, vice president of ION Computer Systems in Hauppage, N.Y. "If they can call you up, get the person who knows their whole story on the phone, and get whatever they need, they'll stay with you."

One of Josephson's small business clients, financial services firm CE Unterberg-Tobin, started out as a 60-employee firm, taking up just half a floor in the Swiss Bank building in Manhattan. "Now, they have 180 employees and take up a whole floor, and they're still with us because we provided a single, direct point of entry to ION at all times."

There may be no single more crucial service you can offer that assures a small business owner that you're reliable and trustworthy.

5. Make Handholding the Top Priority
What goes hand-in-hand with a single dedicated sales rep? Handholding and education. Let's face it, half the reason small businesses need a dedicated sales rep is that they have tons of questions, Josephson points out.

"This is especially true with businesses that have no in-house IT person," he explains. "We're mostly engineers here, so pretty much my whole staff can explain what needs to be explained. But you have to be willing to if you're going to serve small businesses."

If you don't want to offer service that includes walking people through processes over the phone, and going on site and training people on equipment, then stay out of the small business market.

6. Identify New Technologies and Get Them Ready for Growth
Certainly part of fostering strategic partnerships will be keeping up on all of the latest technologies and understanding which may take hold and which likely won't. If you don't have the in-house expertise to do that now, you should consider acquiring it or using your partners to guide you in making such decisions.

It's imperative not only to ensure that clients are getting what's best for them, but also to standardize them, so that as they expand ­ which successful small businesses tend to do at a faster rate than large corporations­upgrading them is easy.

"The process of helping a company grow from 60 to 180 quickly is all about consistency," says Josephson. "And that means standardizing their equipment as much as possible, so adding on new people is simple."

Your reputation as a service provider and technology expert will hinge on how well you make the calls about which technology to standardize. Nothing looks quite as bad as a VAR who must tell a small business client that the infrastructural systems put into place weren't installed with growth in mind, and so the whole thing has to be overhauled instead of simply adding on. This means databases systems that scale well, enough storage to give room to grow ­ the list goes on.

The prize is that successful small businesses that grow spend more money and have constant upgrade needs. If you can prove that you can take them where they want to go next, you'll have a profitable, long-term relationship on your hands ­ and on your books.

7. Don't Disrupt Their Workplace
Bear in mind that while you're installing upgrades, small business owners can't just temporarily move the marketing people into the accounting department to use the extra computers that happen to be laying around. Often their lone marketing person is sitting in a cubicle next to the lone accountant. There probably aren't any extra computers available. These are lean operations, and disruptions of any kind cost them money ­ and aggravation.

Sometimes, the disruption is unavoidable. The network crashes and you have to come in and fix it (the key reason to remind them that they need a maintenance contract, by the way). But if you can minimize the disruption for maintenance and upgrades, you'll win the hearts of your small business clients.

"We try to do upgrades during evenings or weekends, if we can," says Labandibar. "Try and be flexible. That's the best solution for the client."

Labandibar has found that working after-hours also can make any upgrade or maintenance process more efficient, and therefore more appealing, to her own employees as well. "My technicians say they can also concentrate better when the office isn't full of people and the phone isn't ringing off the hook."

Put these seven policies into practice, and you may find you have a whole new list of clients: happy small business owners.

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