Back to the Future for IT Product Sales
During my 20+ years as the founder and CEO of a successful IT solutions company, I saw first-hand the importance of evolving our business models to meet the needs and capabilities of our clients and our own companies. And, as I work with our customers and countless others in the channel now, I see that the more things change, the more they stay the same.
The Heck With Products, Then.
I can easily recall my first 8-10 years of business when I had no interest in selling products since I was 100% focused on service delivery. It did not help our business at the time and you could not get into selling products — or delivering them — without a major investment. We were writing custom applications, and integrating hardware and software into supporting infrastructure to meet our clients’ business needs. Period. And, the products for our recommended solutions were typically sold by a franchise reseller we partnered with, or by others we referred.
After competing on a few deals with resellers who not only sold and delivered product, but who also sold the services as a one stop solution, we were forced to reconsider selling products. The last straw was when we lost a deal with a long-time client to one of the resellers we’d been partnering with. The pressure was on to evolve and adapt, and we had to quickly learn how to sell and deliver products with our services.
After some initial doubts about the shift, over time, we became pretty good at selling product. And those sales helped drive our services business, increased top-line revenue, helped us forge tight relationships with distributors and manufacturers, and jump-started our managed services practice. The best result was increased profitability.
The Heck With Products, Now.
After years of the Industry push to deliver more IT services and to transform into Managed Services Providers with recurring revenue streams, our customers – and the channel – now face similar challenges. With the investments in service automation tools and a narrow focus on becoming great IT service providers, we may not realize how important product sales are to building and maintaining a profitable IT Services business.
As a result, selling more products has not been a priority focus of what we do, or how our businesses can become more profitable doing it. Instead, we refer clients to fulfill their product needs elsewhere and introduce potential competitors to our accounts, or we deliver products in an inefficient manner and negatively impact out own profitability. Most importantly, we risk losing account control and ongoing service opportunities as a result.
Why It’s Time To Change.
Whether you are actively involved in selling tech products or are just beginning to consider it, now is the time to look at product sales as a way to build a stronger, healthier and more well rounded IT business. Thankfully, in addition to the service automation tools on the market that help you scale delivery and reduce costs, we finally have automation tools that promise to take the costs out of the product delivery model as well, and that could be a real differentiator for your business.
Len DiCostanzo is Dean of Autotask Academy and Senior VP of Autotask Corp., developers of Autotask hosted professional services automation software, the VARStreet family of advanced quoting and e-commerce tools and Taskfire, a hosted service desk and ticket management system sold by IT solution providers for businesses of all sizes with internal IT resources. Monthly guest blogs such as this one are part of The VAR Guy’s annual sponsorship.