by Ramon Ray
The foundation of being a VAR has always been selling product, product, product. However, in this new digital economy, product means almost nothing. The currency of this marketplace is content, information, and solutions. Hence the reason VARs of yesterday are calling themselves solutions providers (SPs) today.
For years PC vendors reaped decent margins by selling computer systems. But, then the Internet snuck up and the hardware platform wasn’t that important any more. For years “Intel inside” was very important when buying a computer. Now, who cares? Up until recently, everyone wanted a name brand computer from IBM or somewhere else. Now we are getting almost free, or close to it computers, from Gobi, Emachines, and others. Ever since I can remember, Windows was the operating system of choice force. However, thanks to HTML and XML, the operating system is irrelevant.
The market has turned upside down, I’m sure that soon my local supermarket, Pathmark, will start giving away a computer with every 2 pounds of broccoli purchased.
In any case, where does this all leave you and me? First of all, we’ve got to stop concentrating on selling pieces of metal and plastic to our customers. Let’s be honest with them, it doesn’t really matter so much (more on this later) what kind of computer they have. It does matter what kind of solution you can put together for them.
I’m not saying to go out and get any old PC from any old vendor, the top tier vendors, such as IBM, Dell, HP, and Compaq, make very good computers and should be seriously considered. However, the focus on brand is not important and your customers should know this. On the other hand, note that some of these vendors are adding a value to their computers and you should look at what solutions these vendors are packaging with their computers.
Now back to us. Instead of playing pricing games with your clients and trying to beat the next SP around the corner on a buck or two, begin developing and nurturing relationships with your clients. Let them clearly see that no matter what the brand is on their computer, you can provide them with a solution and add value to their technology purchases, even if you charge 2 percent more than the guy around the corner. Strong customer relations is the first step in adding value.
Also, many peripheral vendors have executed clear small business solutions and strategies, and these peripheral vendors will enhance the value you bring to your customers. For example, Intel’s InBusiness line, WEB Ramp’s products, 3COM’s NBX telephony LAN, and other solutions will add value to your solutions. The PC may be a dying commodity and margins are getting closer to zero, but you can make money outside the box.
E-commerce is crucial. It’s not just the marketing hype, but really enabling your small business customers to digitally integrate their entire sales processes while leveraging the power of the Internet.
Small businesses don’t understand this new digital economy and may think e-commerce is simply e-mailing some credit card numbers. Help them understand. And if you need help understanding how to take advantage of e-business, look to vendors such as IBM, HP, and others to help you learn. Yahoo Stores, and Icat are okay, but that’s child’s play. Being able to “e-biz” your small business customers is important and something they may not even know they need. You may want to partner with another SP or vendor and offer your small business customers a workshop about e-business.
Whether you’re a small one person SP or a large 500-employee company, it’s crucial that you have someone dedicated to e-business and who can help you craft an e-business plan. This person should be able to guide your e-business marketing efforts and services to clients.
Digitally enhanced communications is a must have for small businesses. Larger companies can afford secretaries, administrative assistants, express mailing all over the place, and multiple communications devices. However, small businesses don’t have the time or desire to manage tons of bleeding edge technology, and need to cut as much overhead as they can. That’s why they’ll love any feasible communications solution that will help. As SPs, we can automate everything; however, remember that your clients may not be tech savvy. Therefore, the solutions you provide should be easy to use and manageable. If HotMail works for your clients, then let them use HotMail and don’t try to force General Magic’s Portico down their throats. If they need a solution like Hot Office, then don’t stick them with pcAnywhere. Small businesses are heterogeneous – one size doesn’t fit all.
Treat your customer right and treat them like they are the only client you’ll have, and you’ll be in business for a long time. Provide them with solutions, not just products. Listen to their needs and give them answers. Don’t talk at or down to them. Instead, start an interactive dialog.
I was talking to Barry Star, chairman of OneCore Financial Network Inc. (www.onecore.com), a new full service financial service for small businesses based in Bedford, Mass. He explained OneCore was designed from the ground up for him. As a small business owner, he had gone through many problems with his bank not serving his needs. So he decided to create a financial institution specifically catering to the small business market. In short, he didn’t start out with all sorts of gee-whiz technology, or focus on high-end features. Instead, his primary focus was on customer service, pleasing customers, and making things easy.
Amazon is another good example. Yes, they sell books like every other Tom, Dick, and Harry. However, the outstanding customer service, personal profiles, remembering past orders, showing what others have bought and so many other features to enhance a purchase of such a commodity product endears them to me. I don’t even look at Barnesandnoble.com or anyone else.
OneCore and Amazon get the concept. First build a solid foundation of customer service and support. Go overboard for your customers. After you’ve built this foundation you can build well-working, solid technology on top of it. Competition is fierce and only a new breed of SP that can change and adapt will survive.
