Outside-the-box thinking for increasing Channel sales

Channel-Speak: Yin and Yang of IT Sales

July 12th, 2010

Among the things I count as blessings in my life are my two sons. The younger son is bright, polite, and a true Southern Gentleman. The elder son, however, is just like me. He is intelligent but not particularly smart (as evidenced by decent grades despite many foiled plots to avoid school), embraces autonomy, and can be very innovative (meaning he cleverly schemes his way out of every sticky situation). The younger son does what should be done and the older son does whatever comes to mind. It occurred to me that their methodologies run parallel to one another. I tested this theory and it works: they’re most productive when they work together. And there is a lesson in this for all of us…

How many of you (as owners of a channel company) have hired salespeople who knew almost nothing about the technologies they would sell on your behalf? They are excellent salespeople, but must turn to your technical staff for anything “technical”? Back in the day when IT was booming, this worked. But it doesn’t work so well anymore; salesmen need to get technical and technicians need to learn how to sell. To get a return on investment in personnel, channel companies will need to hire and train both sides of the sales equation; technical salespeople and sales-savvy technicians.

Technicians are, perhaps, the most underutilized sales tool in the channel company’s arsenal. As I’ve said many times in this blog and others, technicians see Sales as a misdemeanor crime; you probably won’t get locked up for it, but people will look at you as a criminal. Technicians want nothing to do with the sales side of the business. They sequester themselves in the lab with their specs and updates, and do what needs to be done. For channel companies to reach their potential, that attitude will have to change.

It’s different for salespeople. They are the most over utilized sales tool in the company. I say that because everyone in the organization expects the salespeople to sell everything. I’ll bet half of you said “of course!” when you finished that last sentence. Of course, it is the salesperson’s primary objective to increase company sales. And when sales are down, the boss points to the salespeople and commands;

“You need to do better than this. You need to make more sales!”

And salespeople do find more sales. They make sales by listening to customers and prospects in finding innovative ways to solve problems. Many times, profitable product lines are the result of this necessary innovation. However, just as many and more new products could be built and sold by technicians involved in sales. He doesn’t need to wear a suit or speak “sales speak” to leverage his credibility to increase sales for his company.

How cool would it be if these two “brothers” (salespeople and technicians) would agree to work together? The boss should tell them that they must find a way to work together, and he should name a deadline for the desired result and make compensation available for both at the completion of the project. Then, to paraphrase General George Patton, the boss should tell the salespeople and the technicians where to go, but not how to get there. He will likely be amazed at the results.

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Channel-Speak: Data Dummies

June 16th, 2010

I was flattered when one the most well-known publications in our industry called with an interest in working together. I was excited to speak with an individual that has graced us with insight and perspective for a couple dozen years. We enjoyed a productive conversation about the need to complement the organization’s herd of data analysts with someone possessing actual experience. They needed more than data; they were looking for someone with real-world knowledge. His words – not mine.

I was impressed with their self=awareness. Privately, we all chuckle at the folly of those Data Dummies that have never faced the reality of only “eating what they kill”. The business analyst that have never built a business. The channel expert who has never worked in the Channel. The industry veteran with whom I spoke seemed quite sincere, but the relationship would never work. Their two-dimensional view of the world doesn’t flange up well with reality.

Please don’t misunderstand; I think we all agree that there is value in Data. It allows us to construct business models based on trends. Tendencies. Averages. But there is inherent danger in relying solely on data to define the tendencies of the average small business because the phrase itself is oxymoronic. There is no such thing as “the average small business”.

This is evident when you talk to analysts about that mysterious thing called the Cloud. Ask them for a profitable small business model for the Cloud; they stumble, mumble and point at the data. Trying to define a “one-size-fits-all” model of the Cloud induces a paralytic trance and the Data Dummies gag on reams of surveys and misguided conjecture. As Channel companies, we know how the Cloud will manifest itself in our business lives. We know that its implementation will be different for each of us because each of us serves a different business segment or vertical market. There will not be one ubiquitous Cloud; there will be stand-alone Clouds for the local medical clinics or regional printing companies or law offices in the metroplex. They will be vertically-specific and deployed by Channel companies with vertical expertise.

Data is of value when it is seasoned with common sense. It is important to remember that there is no such thing as a ‘business model sandwich’ and you can’t feed your family a hypothesis. Vendors and small businessmen alike are well-advised to consider data a supplement – but not a substitute – for experience, intuition, and good ol’ common sense.

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Channel-Speak: To a Healthier Channel

May 2nd, 2010

At the airport on my way back to Dallas, I review the events of Intel’s Channel Alliance Summit. I was privileged to open the event with a short keynote speaking to the recent evolution of the Channel. At the Summit (hosted by Intel at HQ), many industry-leading vendors gather to review the state of the channel. They collaborate to improve the health of this all-important customer segment. The Channel is of great importance to the vendor community; we provide ‘touch’ to hundreds of thousands of users, take new technology to market (and provide meaningful feedback) quicker than our competitors, and – most importantly – provide vendors with their most profitable stream of revenue.

It is my observation that the vendors at this Summit are regulars; always a few new guys, but most appear year-after-year. They “talk the talk and walk the walk”. There are, of course, several big names that do not attend. There are many vendors (VMWare comes to mind) that pay lip service to channel partners and never seem to have time for this type of event. At the Channel Alliance Summit, however, we see the best of the vendor community working hard to assist the Channel in overcoming major obstacles to growth. Obviously, I am not at liberty to discuss details of this event or the content delivered. But my message this morning needs no such detail. It is enough to know that many of the Channel’s business partners are sincere; their appreciation for the Channel is genuine. They are ‘in sync’ with our stated priorities and understand our need to market the Channel brand. They fund the development of compliance programs (as we move toward inevitable ‘green IT’ requirements). They provide research data that helps us determine the best [Channel] business models in today’s economy. Most importantly, they remain open-minded to new ways of doing things – new ways to support their Channel.

So often we breakfast with doom and gloom, beginning our days with bad news for the Channel. That MNCs are blocking us out of government bids with compliance regulations they helped design, that the New New Deal has not provided necessary financing for our customers and our companies, and that our migration to a service business model has become – out of necessity – an exodus. As is so often the case with The Media, however, you’re only reading the bad news. The good news is that some of the biggest and most powerful players in the game acknowledge our importance to this industry, and commit time and resources to seeing us grow. The good news is that it is not a huggy-feely thing that diminishes as the relationship matures, friends; their appreciation for the Channel is serious business. We provide them with their richest source of revenue, and they’re dead serious about protecting that…

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Channel-Speak: Getting your Foot in the Door

April 6th, 2010

As we all know, channel companies believe that differentiation is a strategic advantage when competing with multinational companies for a customer’s business. Our ability to do more and be more for our customers is, in fact, a big part of our “value add”. Talking about differentiation is one thing; demonstrating it is another altogether.

Many years ago, Kenny Kremm (my business partner) and I were competing for a Storage Area Network sale being tendered by an international printing company. Two well-known multinational companies were involved in the tender, and it appeared unlikely a company of our size would be able to compete at all. Fortunately, the plant manager responsible for making the purchase decision felt it important to at least consider a small business for the job. We had the expertise (and had won several industry awards validating that claim) and we had the service record, but we did not have the size to make the customer comfortable with our ability to deliver and support such infrastructure. As the day neared for the sale to be awarded, only Dell, Compaq, and our company remained. We called to get updated on the status of the order but were unable to reach the plant manager. Another day passed, and we began to worry. On the third day, we decided to take action before the sale was lost.

Kenny and I drove down to the local boot store; since we lived in Texas, it wasn’t much of a drive. We picked out a nice but inexpensive pair of black cowboy boots. We took one boot from the pair (so the plant manager would not mistake the offering for a gift) and put it in a box with a note that said…

“We have the technology. We have the expertise. We are the right team for the job. Just let us get our foot in the door and we promise we won’t let you down.”

We FedEx’d the box to the plant manager to arrive the next day. Before noon he called and, laughing, gave us one shot to get our “foot in the door” and instructed us to be there by lunchtime the next day. We won the sale and kept the customer for many years to follow.

Customers will buy what channel companies have to sell, but we have to sell them on the fact that we, in fact, do more for them. Be bold. Be confident. Be different.

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Channel-Speak: New Opportunities for the Channel

March 31st, 2010

This week, I spoke at the Home Entertainment Solutions Summit in Dallas, Texas. It was a gathering of A/V solution providers, including retail shops and systems specialists. My presentation was about partnering with the channel to meet their IT needs.

Home entertainment has become more than displays, DVD players, and 5.1 audio systems. There is a need for what I call “domestic infrastructure”; an integrated solution based on client/server technology. These AV specialists understand that IT is an inevitable part of their solutions future. The questions posed at the end of my presentation revolved around whether to (a) grow these skill sets organically within their own organizations or (b) build a relationship with a channel partner. The opportunity presented to my peers in the channel is obvious.

I was able to convince most of the attendees that the dollar/hassle ratio would be more cumbersome and costly than partnering with channel IT specialists. The custom nature of “domestic infrastructure” could easily be met by most channel companies with experience in servers, storage, and networking. Customization might include small quiet cool servers with redundant storage systems, various desktop configurations to meet specific needs of family members (touch screen in the kitchen for Mom, gaming workstation for the kids, docking station for Dad’s mobile office, and high-end media centers for the family room). There would, of course, be networking involved and, eventually, remote control of many household systems.

These are the kind of opportunities the channel needs to diversify their businesses. We talk about digital signage, ruggedized equipment, and healthcare on a regular basis. But this real-time communication with the Home entertainment industry demonstrates the abundance of opportunities available to channel companies willing to customize and service new applications for technology.

Feel free to contact me for more information on home entertainment opportunities. I will be happy to do some “matchmaking” on my channel peer’s behalf.

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Channel Speak: How to Win New Customers

January 19th, 2010

How to Meet that New Customer

For the best part of the last quarter, I was ’on the road’ meeting with channel companies across the country. I learned a lot about today’s channel business from system builders and integrators in the channel. I learned that things don’t look as bad as they did a year ago, but we can’t say things look good. We haven’t lost any customers really; they’re just not buying as much. We need new sales to replace that revenue. We need new sales to grow.

Big companies increase their marketing and advertising budgets in an effort to increase sales. Channel companies don’t have marketing budgets and advertising is usually limited to giveaways for our customers. Simply put, channel companies have to actually see more [people] to sell more. We have to see prospects and make a connection as small businesses. It is something unique that we have in common with the small business marketplace, and the MNCs will forever envy our customer ‘touch’. That’s our value-add and, intuitively, the prospect understands that.

Beyond your products and services, you want to sell the small-business brand. Essentially, the small-business brand means “we cost a little more, but we’re worth it”. Small business will customize products for customers and back them up with the craftsman’s guarantee. Everyone I know expects to pay a premium for a company that works like that. Small business in IT offers the same things to our customers; customized technology, industry expertise, and unconditional service.

“Sounds good. Let’s go sell them. What are we going to do now?”

First, we have to find some new prospects. There are many schools of thought on that matter. Some recommend cold-calling (a waste of time for system builders) or telemarketing, and some prefer direct mail. Personally, I practice ‘networking’. And the best network to harvest for referrals is your personal customer network. Here’s an example:

I’m having a normal conversation with one of my customers. In the course of conversation, he’s likely to ask me “What’s up with you?”

“I’m prospecting. I’m calling my customers and getting referrals”, I say, “and I’m going to need five from you.”

“Well, I don’t know anybody who is buying servers right now,” says your customer. “I’ll be sure to refer to them to you if I hear of anybody.”

(That is the standard response. And here’s the good stuff…)

“Thanks, Matt, but I’m not looking for people buying servers. I’m looking for the names of people you know and trust who have computers and use them in their business. Because I know when they buy computers, people usually buy from reputable companies and people they trust. And with your recommendation, I get a chance to be that guy. Just the names of five friends or associates…”

Then play the same thing back to the prospect:

“I’m Pat Taylor with Atypical Business and I was referred to you by Matt as someone he knows and trusts. I build and support all of Matt’s IT equipment.”

“Well, I don’t need any servers right now.”

“Yes, sir; Matt said that when he gave me your name. But he knows that people buy computers from a reputable company and from someone they trust. And that’s why I called today. I want to meet with you and learn a little about your business. And maybe the next time you’re buying computers, I’ll be the guy that you trust. Like Matt does. Is Tuesday at lunch a good time to meet or is Wednesday morning better?

And this is Sales! This is how it is done; if you see two of these referrals each day – three days a week, you’ll see almost 300 new prospects a year… and you’re going to make more sales. No high-dollar marketing campaign will prove as effective as direct communication with prospects by referral. People will agree to meet with you. At those meetings, you lay the groundwork for long-term, mutually-beneficial business relationships.

From the moment you sit at the table to meet with a prospect, you must take care to establish the appropriate relationship with this person. This entrepreneur. It is important to remember that for him – as for you – business is personal. And since he doesn’t really want to know about the 15 locations your company has in America and your long history of achievement as expressed as a percentage of some acronym, he would like to begin building this personal relationship by telling you about his business. And he wants you to listen.

By listening, you gather invaluable information about the customer and the company. Moreover, you begin to establish a relationship; you become a communications link he can trust. Just the act of taking time to listen to a prospect or customer adds value to your service. What we really provide is Comfort and that adds value, too. You want your customers to know that you’re “a little more expensive, but worth it”. In the beginning, you do that by listening.

These simple suggestions will work for you. I have shared them with channel companies across the U.S. and Canada and the feedback I receive validates that claim. If we can discipline ourselves to seek out new customers – one call at a time – we can begin to turn this thing around and secure our niche in the marketplace.

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Channel-Speak: A Frightful Vision

December 2nd, 2009

System builders here and abroad are increasingly aware of the uncertain future of the Channel. It all started a couple years ago at the Intel Solutions Summit when Paul Ottelini, President and CEO of Intel, shared his vision for Tomorrow. His vision is of a world in the not-too-distant future where there exists a “billion connected devices”. Hundreds of millions of different, discrete miniature systems connecting and communicating; consumer electronics, embedded devices, handhelds and netbooks. And it’s scary how fast the vision has become an impending reality.

The vision creates uncertainty for today’s channel companies because only a fraction of those billion devices can actually be built by the Channel. In my vision of the future, the Channel will probably be building infrastructure for ‘the cloud’ in the form of servers and storage. Infrastructure projects benefit from vertical expertise, custom designs, and rapid service response; these are all hallmarks of a channel company, so we’ll be building infrastructure for awhile. And we will be providing service for the users of those “billion connected devices”. But we won’t build many desktops, or laptops. Certainly no netbooks or handhelds or anything else that is small. The transition from building systems to NOT building systems will be a sea change for these small Channel businesses. If they are to survive the transition and thrive in the future, they will need to commit to a common [channel] strategy and relentlessly execute their plan.

I believe that the Channel needs to create demand for its products and services. We need to tell the buying public that we’re experts in making ‘the cloud’ work for their businesses and can provide all the services they’ll require. We need to let them know that there are thousands of channel companies all across the country and that “we’re small businesses just like you”. Customers will buy into that idea, but we’ve got to put it in their heads. We need to better market our collective ability to deliver more than servers and storage; our product is Comfort and small businesses need what we’ve got. And we have to learn to sell what we’ve got. We need to put top priority on sales and sharpen our salescraft. We need to build a company culture around Sales in order to find new revenue (cash flow) and create more margin (profit).

Intel’s vision for the future is almost upon us. The relentless truth of Moore’s Law dictates that technology’s new devices will get smaller and smaller until only machines can manufacture them. The business of system building will change dramatically, but there will still be business for system builders. Capturing the business (and securing a future) will rely on our ability to see change and adapt. To learn new things and accept new challenges. To evolve in response to our changing world.

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Channel-Speak: Business Associates

November 3rd, 2009

In 1844, a group of 28 artisans working in the cotton mills in Rochdale established the Rochdale Equitable Pioneers Society.  These poorly paid weavers could not afford the high prices of food and household goods, so they agreed to pool their resources and buy the things they needed at a lower price.  The principles that brought success to the Pioneers Society serve as the foundation upon which all modern co-operatives operate.

If you read the blogs I post on this site, you probably know that several dozen system builders have agreed to work together.  Our Channel network is like a co-operative and a trade association combined; a trade association to advertise and promote our industry brand and a co-operative to better negotiate for goods.  Our loosely affiliated group of like-minded entrepreneurs is already engaged in “Channel business” and has made measurable progress, negotiating a Volume Purchasing Agreement and Channel Discounting plans.  The work isn’t finished, but we have made a start.

We’ve grown from the original 59 members to more than 80 participating companies during our first six months.  And I should qualify this number; most of these companies are part of the Intel Premier Channel Partner organization – the top tier customer companies in Intel’s channel program.  One out of five Premiers is involved in our network and the growth is totally organic – completely ‘word of mouth’.  Recently, the second tier of Intel’s channel – the Associate level – has shown great enthusiasm for the Channel network initiative.  Associate companies in North America number in the thousands and their participation will provide appreciable thrust to the effort.  The need for collaboration is a topic of conversation at every Channel gathering I attend – and I attend a lot of gatherings…

So you heard it here first; some system builders and integrators are starting an association.  By us – for us; that kind of thing.  An association to preserve and promote the Channel.  It will be organized to create and promote a Channel brand and to establish it as a premium brand; a preferred option in the eyes of the American buying public.  Of course, participating association companies will maintain their individual identities, but gain recognition and benefits by demonstrating their Channel membership.  Benefits like [co-op] better pricing.

These are not lofty goals, Channel peers; we have already negotiated a Channel Purchasing Agreement with one alternative distributor out West and have signed a provisional agreement with a purchasing entity to aggregate product on our behalf.  To reap these benefits (and others), you need only your Proof of Membership.  You can join the Channel network by following this link. It’s free, except for the obligation to participate.  Creating the association is still in front of us, but collaborating and leveraging our strength has begun.

Something good is about to happen, folks.  And system builders and integrators will want to be a part of it.

(The association is Under Construction.  You can join the Channel network free of charge at http://www.atypicalbusiness.com/index.cfm/general/join_the_channel – as a member, you are obliged to participate in a minimum of one vote each month.  It’s free until the association is formed.)

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Channel-Speak: EPEAT for the Channel

October 11th, 2009

I just got back from Intel’s Channel Alliance Summit. The event is designed to gather companies from the vendor community to communicate (and perhaps collaborate) on subjects relating to the Channel. Of the topics presented, I found the sessions on “Eco-smart” and EPEAT most interesting. Environmental compliance is a big deal with the people who buy our products now and in the future, and it is encouraging to know that vendors are working on the Channel’s behalf.

The impact of the trend toward ‘green’ became serious when we first learned of EPEAT last year. These compliance criteria became boilerplate for a surprisingly large number of government and education organizations. When IT stimulus money was released, 22 government agencies were among the first to roll out RFPs for hundreds of millions of dollars of work. To the Channel’s dismay, every tender issued by these agencies required that the participant provide EPEAT-compliant equipment. The small businesses that were the intended beneficiaries of the stimulus plan were prohibited from competing by a standard we cannot meet. If there was a “bright side” of things at that time, it was seeing the vendors share our surprise and dismay at the discovery.

Some of the vendors (most notably Intel) directed resources to assist the Channel with programs and compliance consultants. Others have taken a more creative approach. At the Alliance Summit last week, we heard Paul Parkinson of In-Win (the chassis and power supply vendor) describe their company’s effort to support the Channel. His team proceeded with a strategy built around the idea that EPEAT is not about a particular product (although that is how it’s managed); it’s about a process. So Paul and his crew organized the documentation, processes, and process management required to meet EPEAT’s compliance specification. This very creative (and quite effective) approach took many man-hours to execute, but the results seem spectacular to Channel guys. By the end of the year, a Channel company should be able to purchase a chassis and power supply from In-Win and assemble an EPEAT-compliant machine. The chassis and power supply will come with “manuals”; Energy Star and EPEAT compliance guides that will list the certified parts (and their vendors) that a Channel company can use to assemble their machine. With EPEAT compliant desktops and laptops, we can compete for stimulus dollars in government and education infrastructure opportunities. We can compete for business where environmental compliance is a requirement.

There is still work to be done. We need other members of the vendor community to step forward and join Paul Parkinson at In-Win. His team has done most of the heavy lifting; other vendors need to communicate with him and certify their technology as part of In-Win’s compliance stack. More vendors – more variety; more technology for the Channel to use to build custom solutions for customers. I was at the Channel Alliance Summit last week and I heard Paul’s presentation to his peers in the vendor community. There was interest and enthusiasm, and I hope that translates into action. It won’t hurt if the system builders reading this blog will (the next time they’re on the phone with them) ask your vendors what they are doing to help you achieve EPEAT compliance.

The real message lies more in the method than in the result. The Channel identified the problem during an event hosted by a vendor. A vendor takes up the cause and brings a solution to the Channel. All this in less than a year…

..imagine our achievements when we’re properly organized.

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Channel-Speak: The Extra Mile

September 2nd, 2009

(Part 3 of a three-part series titled Sales Savvy for the IT Channel)

In the last blog, we talked about prospecting as an essential and often neglected part of the sales process.  We talked about how the old prospector’s advice was relevant to today’s businessman; we have to move a lot of material if we’re going to find any gold.  And salesmen should be prepared to go through a lot of prospects to find some customers, too.  Finally, we discussed the fact that prospecting is hard work, and that nobody likes hard work.  But the secret to success in prospecting (and in sales) is making a habit of doing the things that no one likes to do.

Some sales trainers call this “entering the Discomfort Zone” and others call it “walking the Extra Mile”.  So what do the old sales maxims do to help channel companies run a better business?  How can they help them make more money?  How does a CEO get into his Discomfort Zone, and isn’t every president always walking the Extra Mile?  The direct answer is “no”.  Read the rest of this entry »

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