Demo Your Way To Higher Profits
MSI Systems Integrators will double its storage revenue this year by letting customers try before they buy.
Imagine for a moment that you are a specialty car salesman. A customer walks in and expresses an interest in the new Lamborghini Diablo (retail price: $274,900). You take the customer to a conference room and show him pictures of the automobile, while describing its 550-horsepower engine, 48 valves, leather seats, and ability to do zero to 60 mph in three seconds. After several minutes of listening to you talk, the customer starts to get a glazed look in his eyes. Upon realizing that you are not going to actually show him the car, much less take him for a test drive, he thanks you and walks out, taking his business and his money elsewhere.
Unfortunately, as a VAR or integrator, the aforementioned sales approach may not be all that unfamiliar to you. The conference room approach is how many resellers attempt to sell companies a storage area network (SAN). SANs are complex and expensive, easily costing $1 million or more. Yet in making the purchase, prospective clients do not get to see, touch, or test drive any of the equipment. For customers who were already confused about the technology when they walked in, this type of sales approach leaves a lot to be desired. Have you ever wondered if there might be a better way to make the sale?
Phil Sauvageau, EVP of products and services at MSI Systems Integrators (Omaha, NE), often pondered that question. But, he doesn't have to wonder anymore. In 2000, MSI installed a solution center in its home office so that customers could come in and try out a SAN before buying it. Last year MSI's storage sales soared from $6 million to $25 million. Sauvageau attributes that success to the new solution center. This year, MSI expects that revenue to double to over $50 million.
SANs And Fibre Channel Bring Consolidation And Confusion
In 1999, MSI saw a trend developing in the storage industry. End user companies wanted and needed to consolidate their data storage, which was growing by 50% a year or more. "At the time most industry analysts believed that Fibre Channel would actually become accepted as the technology to help customers with that storage consolidation," said Sauvageau. "We felt if we started to put a solutions lab together, it would come to fruition about the same time Fibre Channel standards hit the market. And that is exactly what did happen."
MSI's IBM Certified TotalStorage Solution Center (TSSC) was opened in July 2000. MSI had four main goals it hoped to accomplish with the center. First, the company wanted to be able to demonstrate to customers the new products that were coming into the market, specifically Fibre Channel switches and enterprise storage devices. To this day, that is still one of the primary functions of the lab. The second goal was education. Sauvageau felt that if his engineers educated clients on storage products, the customers would look to MSI to perform the design and implementation work as well.
The third goal was to perform proof-of-concept testing. If a customer has an idea of something they think might work, MSI can put together a scaled-down version of the client's SAN environment to demonstrate how the solution would work. The final goal was to allow customers to come in and use the lab for testing.
MSI has invested about $1 million in the TSSC, but Sauvageau places its total worth at around $3.5 million. "That would be the total cost if we had to go out and purchase all of the equipment," he insists. MSI was able to bring down the cost by working closely with its vendor partners, namely IBM and McDATA. MSI also made good use of marketing development funds available from its vendors to purchase a lot of the equipment. There are also ongoing costs related to rotating equipment in order to keep up with the latest products, and personnel (staff engineers) whose time is required in the lab for customer testing.
Build The Center And They Will Come
MSI is currently in the process of expanding the center, which will bring its total size to 1,200 square feet. The TSSC includes an equipment room, two demo rooms, and a meeting room. MSI has had well over 1,000 clients through the TSSC since it opened, and according to Sauvageau, there is no question the lab has been the reason for MSI's soaring storage sales. "When we bring customers in and let them see and try the equipment, you can see the light bulbs come on in their heads," he said. "Customers are used to salespeople describing a SAN to them. Actually seeing and touching the equipment and software is something that is very new to them."
One company that toured the lab was a nationally known law firm. The firm handles large cases that require the company to rent out floors of a hotel and install a storage system that all of the attorneys can access from their rooms. "They will actually build a data center in a hotel each time they get a new case," said Sauvageau. "Sometimes they needed NAS [network attached storage], other times they needed a SAN. The system also had to be mobile. They came to us with some pretty challenging needs."
The customer was already convinced that no one could help them when they were invited to visit MSI. "We designed a SAN that could be parked at their corporate headquarters or moved if necessary," said Sauvageau. "We built the system and showed them, live, what the system could do for them. We also demonstrated our technical capabilities to support them and their equipment." Needless to say, the demonstration resulted in a sale of the SAN.
Another customer was a healthcare firm with hospitals in multiple locations that faced problems with storage on both their open and mainframe systems. Vendors they spoke to were typically able to solve either their open system or their mainframe problem, but not both. "We told them that if we were not able to demonstrate a way to solve their problem, that we would pay for their trip to Omaha," boasts Sauvageau. "Otherwise they would pay for the trip and let us help them. We presented new solutions to them and showed them ways to connect both their mainframe and open systems." The end result was $1.5 million in storage revenue for MSI, with more on the way as the customer is now expanding.
When Your Plan Works, Put It In Writing
The last two years have taught MSI a lot about how to best run the TSSC. Sauvageau believes commitment and design were two of the biggest lessons learned. "If you take on an endeavor like this, you need to be committed to it," he said. "You also need to design the center in a way that you can make it successful without outside help. A lot of integrators make the mistake of believing that one of their large partners will bring them a lot of customers. VARs will get support from our vendors, but don't count on someone else to do your job for you."
Sauvageau also insists that when running a TSSC, VARs must have a consistent message to deliver to customers. A consistent message makes the entire briefing process definable and repeatable, regardless of who the customer is or what they are looking for. MSI's procedure is written down on paper and studied by every employee who works in the center. "We felt we needed a consistent message, and our success proves that the process we developed does work," said Sauvageau. "We are deliberate in how we approach each briefing. We know exactly what is going to happen next during every minute of the briefing process."
Clearly, getting to that point will be a VAR's biggest challenge. Even for MSI, getting to this stage did not happen overnight. "We are very comfortable with our process now," said Sauvageau, "but it took about a year before we had a process that worked and that we were comfortable with. It is now a rock-solid plan, and we intend to expand that whole concept into more of our products and services."