PCnomics: How VARs Can Thrive in Tough Economic Times
Sure, customers across most market segments are cutting back their IT spending. With increased competition for this smaller opportunity, it is a critical time for technology resellers to focus on their core competencies. Many resellers traditionally specializing in hardware sales, including PCs, have diversified their offerings to include services like remote monitoring and software as a service (SaaS). Other resellers are trying to define a niche in Managed Services and Consulting practices. Here’s how you can keep your profits flowing.
The economic downturn provides the impetus to assess current offerings and streamline them. This can concentrate areas of expertise providing higher customer value. If you’ve been to the grocery store lately, this concept will ring true. Look at how many food companies are driving less popular brands and flavors from their product lines and concentrating on merchandising the best-selling ones.
While VARs should consider consolidating their offerings, it’s important to remember that many customers are doing the same thing. They are pairing down on the amount of technology purchases and their points of purchase. Choosing only the most immediate and necessary equipment means resellers who offer a complete line of high-quality products with different levels of functionality will better be able to meet their customers’ needs.
A customer who may want netbooks for connectivity purposes, laptops for their mobile workers, desktops for their call center and servers to power their operations can save on procurement costs by going to one reseller who offers a one-stop shopping experience.
Resellers should look to partner with vendors who offer them a full, diverse product lineup. For PCs, that starts with entry level products at sub-$400 prices all the way up to the highest performing PCs for graphics, intensive processing and niche applications. (Here’s a sampling of our own offerings, if you’re interested.)
Customers are looking for resellers as “trusted advisors” to steer them to the hardware purchases yielding the best bang for their buck. Resellers who do this well will be rewarded with loyal customers in any economic condition.
Value is the new standard for making decisions on IT hardware in today’s economy, and resellers can drive value through their technology recommendations, factoring in durability, reliability, energy efficiency and the latest technologies.
Extended Life Cycles
Some customers who have purchased high quality PCs have been able to use them up to five years. For customers who are not ready for replacement, resellers can help them extend the life of their existing fleet through PC tune-ups, like upgrading memory and hard drives, defragging hard drives, removing unnecessary applications, replacing batteries and adding a second monitor for increased productivity.
Resellers should educate customers about the total cost of PC ownership, realizing that more than 80 percent of the total cost comes from management and ongoing maintenance costs, not the PC purchase.
Resellers can help lower the ongoing costs through their value-added services, such as remote monitoring, patch management and backup services. Additionally, look for vendors who back up reseller partners with additional service offerings, such as 24/7 IT support. Customers can even receive credit toward future hardware purchases by using end of life recycling options from some vendors.
Finally, resellers should look for vendors who offer complete financing options to them as well as their customers. Plans such as 0 percent financing, leasing options and discounts increase flexibility, incenting customers to invest today instead of waiting for tomorrow. Governments are also offering technology stimulus packages, and resellers should understand them and the applicability to their customers.
The focus on fewer, higher quality vendor solutions, combined with enhanced services, lower total cost of ownership and financing options will drive greater customer value, increase loyalty and protect the reseller during unstable economic times. More importantly, these actions will position the reseller to emerge even stronger than before.
Jay McBain is director of SMB for Lenovo. Guest blog entries such as this one are contributed on a monthly basis as part of The VAR Guy’s 2009 sponsorship program.