If there is something we have heard with a good deal of regularity recently, it is resellers complaining about falling hardware margins. "The [insert appropriate technology here] market is becoming commoditized," is a common cry. Ditto for, "If you don't sell training and services, you will struggle to be profitable." However, it is still possible to find VARs that not only move a lot of hardware, but are happy and profitable doing so.
eServ, LLC, a reseller headquartered in Peoria, IL, sells a lot of hardware and is proud it does. "We like selling hardware, and we make a lot of money doing it," boasts COO Tim Baldwin. "The way we do it is by developing close relationships with every customer and becoming their partner and trusted advisor, not just their VAR."
eServ got its start providing outsourced engineering design support and services to clients. The nature of the business required eServ employees to get very close to their customers. "We were not hired hands providing outside support to their engineering team," said Baldwin. "We were considered an extension of their own team."
When eServ entered the reseller market in 1999, Baldwin wanted to take that close, partnering type of relationship and carry it over to their VAR business. The company already had employees involved in the engineering environments of large customers, which gave eServ an interesting inside perspective. "We were able to gain an understanding of each customer's computing needs," said Baldwin. "We felt that inside knowledge gave us an advantage over our competition."
Build A Trusting Relationship
Although pre-existing customer relationships helped eServ get its VAR employees in the door with many large customers, Baldwin credits his company's business philosophy for most of its success. "We consider ourselves a trusted advisor to all of our customers," he stated. "Our customers are our partners. They trust us to provide them with the right solutions, regardless of cost or manufacturer. Our customers trust us because we have developed close relationships with them and have proven to them that we are on their side. Every employee in the company is tasked with building relationships, and those relationships are what allow us to fight off our competition."
eServ is located in farm country, and because of that its customers have to be more sophisticated than their counterparts in large metropolitan areas. While eServ's customers use the same diverse products as a company in Chicago or New York, they do not have access to the same vendor resources. This requires them to build a pretty sophisticated infrastructure to support their needs. eServ has built its business around supporting that infrastructure. "There is a lot of legwork involved," admitted Baldwin. "You have to know their business and their infrastructure. We represent each customer in dealing with vendors and always look out for their best interest. That is how you become a trusted advisor."
But it is that same geography that helps eServ employees build good relationships. "We are out in the boonies," said Baldwin. "Being in close-knit communities enables us to have phenomenal relationships with all of our accounts. We see them in the community, at soccer games, we eat lunch together, and our children go to school together." The population of Peoria is about 175,000, and it is located in a metro area with a population of around 500,000. eServ's other main VAR offices are in Rock Island, IL, and Des Moines, IA, each with a metro population of approximately 500,000.
Putting The Value Back In VAR
The focus on relationships is certainly paying off. Many of eServ's customers are large companies that are direct accounts for some of the big vendors. However, those customers will often insist that products be sourced through eServ. "They know they will get a straight deal from us," said Baldwin. "Vendors come and go, but our customers are here forever."
An example of eServ's trusted advisor status can be seen in Rockwell Automation, a longtime eServ customer. A large storage vendor was recently in the process of making a direct sale to Rockwell. When negotiations got down to the wire, Rockwell insisted the vendor get eServ's blessing on the deal before they would write a purchase order, which the vendor eventually had to do.
Another Fortune 500 company had been buying direct from one of its vendors, which did not want eServ's participation in the account. Baldwin agreed to stay away, but the vendor soon found it was not able to meet the delivery time demanded by the customer. The vendor's delivery time was 30 to 60 days. "That is typical when buying direct from the manufacturer," said Baldwin. Most of the big vendors are just-in-time manufacturers, so each order has to be built. Their direct sales reps also cannot go through distributors, as that luxury is afforded only to VARs. "The quick fix to that situation was to bring a VAR into the mix," added Baldwin. The vendor reluctantly called eServ, and Baldwin's team was able to bring the delivery time down to four days.
"We have since established a long-term relationship with the client," said Baldwin. "When we found out the customer actually needed even faster turnaround times, we created a new program called Rapid Server Deployment. We now build servers to their configuration specifications and store them on-site at their facility. They are ready to be installed with just a phone call from the customer."
100% ... Plus 1
eServ's method of doing business has also enabled the company to continually defend its turf against larger VARs, and Baldwin acknowledges there are a lot of them calling on eServ accounts. Much of the eServ philosophy is derived from the book Raving Fans: A Revolutionary Approach To Customer Service by Kenneth Blanchard. The book, which tells how to deliver exceptional customer service, is now the in-house bible for eServ employees, and the company has gone so far as to create an entire training program based on its concepts.
"Every eServ employee has read the book, and it is now assigned reading for every new employee," said Baldwin. "We expect employees to meet every customer's needs and then go beyond that. We expect our employees to take ownership in every customer and in everything they do, every single day. We don't treat customers the way we want to be treated. We treat them better."
After reading the book, Baldwin brought in a consultant to train every eServ employee on the concepts outlined in the book. The company has since hired that consultant as a full-time employee. Every employee at eServ now receives nine hours of training a month on providing exceptional customer service. The training program costs eServ around $50,000 per year, not including employee time spent in training, but Baldwin believes the money is well spent.