Your retail clients can lose tens of thousands of dollars an hour if their brick-and-mortar or online point of sale systems crash, making BDR (backup and disaster recovery) a must-have.
In some vertical markets, BDR is the foundational solution and service VARs and MSPs sell their clients, which opens the door to additional opportunities. A case in point can be seen in an MSP success story in this issue (see pg. 26, “Lead With BDR, Follow With Managed Services”). The story highlights Clocktower Technology Services’ BDR sale with a hotel resort. Shortly after the initial sale, the MSP upsold the client a managed services agreement that’s led to a much more profitable business relationship over the past couple of years.
In retail environments, on the other hand, selling BDR seems to be more an exception than the rule. “A recent survey we conducted revealed that business decision makers in the retail industry are more likely to manage application support themselves rather than pay an external consultant or firm,” confirms Dave Hauser, senior director of channel development at Carbonite. “In fact, only 18 percent of retailers bring in a consultant.” But Hauser and other industry experts agree that when it comes to a business’ backup and recovery plan, more retailers should be bringing in outside professional help. And, with a few tips from industry experts, there’s no reason that can’t happen.
Retail Needs BDR In A Big Way
Have you ever been shopping somewhere only to find out at the checkout the retailer’s payment system was down, and it couldn’t accept credit or debit card payments? As frustrating as that experience can be, consider the negative repercussions from the retailer’s perspective. “With retail organizations generating revenue on an hourly and sometimes minute-by-minute basis, downtime can be much higher than with other organizations that have less frequent transactions,” says Dave Sobel, director of partner community at GFI Software. “For example, a typical storefront, such as a retail shoe store, can bring in revenue in the thousands of dollars an hour, and when the system is down, this revenue is halted at best, but more often it’s lost to a competitor.”
Not all downtime is temporary, either, as Subo Guha, vice president of product management and marketing at Unitrends, reminds us. “There are various surveys that show that between 25 percent and 40 percent of businesses that lose their data following a disaster never recover. Retailers must have proper backup and recovery policies and solutions that enable them to have complete business continuity at an affordable cost.”
Selling BDR On Price Is A Losing Proposition
IT solutions providers that recognize the important role BDR plays in protecting their customers and learn how to avoid a couple of common sales pitfalls can earn new healthy revenue streams and build stronger customer relationships in the process.
One of the biggest mistakes VARs and MSPs make when selling BDR is spending too much time engaged in “cost-per-gigabyte” discussions. Let’s face it: Storage is cheap, and it’s getting cheaper all the time. You’re probably well aware that many consumer cloud providers offer cloud storage services that are free for up to 25 GB of cloud storage, and they charge a nominal fee to those that have greater data storage needs. Storage appliance costs are a mere fraction of what they used to be, too. “Don’t focus just on cost and the price of the initial solution,” warns Guha. “Focus instead on the business SLA [service level agreement] and recovery times a business can tolerate and look at the customer’s future growth needs.”
Some VARs and MSPs move the “value vs. price” pendulum too far to the other extreme, however, when they engage prospects by focusing their discussions on worst-case disasters such as fires, floods, hurricanes, and the like. Rob Rae, VP of business development at Datto, says this can backfire on the MSP because these extreme scenarios can come across as scare tactics. A better approach, says Rae, is to focus on the more tangible day-to-day business challenges that are much more likely to resonate with prospects. “It’s all about RTO [recovery time objective] — how long can your retail client afford to be down?” he says. “If an MSP can clearly articulate the financial impact to a retailer’s operations when even a couple of hours of downtime occur, the MSP can sell a business continuity solution.” To make that happen, it’s imperative MSPs present easy to understand metrics to their retail prospects. Some BDR vendors offer online RTO/RPO (recovery point objective) calculators that MSPs can use when engaged in these discussions.
The Other BDR Sweet Spot — Regulatory Compliance
Retail security data breaches have made headlines over the past year with big-name retailers being the target (no pun intended). Although this may sound like a topic that’s separate from BDR, security and BDR are very tightly linked. “With the management of data, cloud backup solutions must be encrypted and managed in a secure manner,” says Sobel. “Understanding the management and even the geography of the data storage is necessary to ensure proper compliance. Additionally, encryption and routine auditing should be a part of both the transit of the data and data storage.”
The topic of regulatory compliance is an area where IT service providers can distinguish themselves from consumer-grade cloud offerings, which lack many of the necessary encryption and other data protection elements. It’s also imperative that VARs and MSPs choose their vendor partners wisely to make sure they’re not putting themselves and their retail customers at risk. “When you’re looking at any BDR vendor, make sure to do your due diligence in checking out their security practices,” advises Hauser. “If the details aren’t readily available on their website, ask a salesperson about the vendor’s encryption, data center security, compliance requirements, and where their data centers are located. If they’re reluctant to share that information, walk away. There are other vendors who will be up front with you.”
Datto’s Rae concurs with Hauser’s points and adds, “Make sure the vendor you work with will sign a Business Associate Agreement [which acknowledges the vendor’s commitment to comply with industry regulations], the vendor’s solution comes standard with end-to-end encryption [e.g. AES 256], and the vendor offers education on compliance [e.g. white papers, webinars].”
A BDR solution isn’t a nice-to-have luxury your retail clients should consider when they have extra budget they don’t know what to do with. Rather, it’s a smart business move that’s akin to the insurance we buy to protect our homes, automobiles, and our lives. Once you help retail clients see and understand this logical parallel and demonstrate your knowledge of their business continuity and regulatory compliance needs, BDR sales can quickly change from sales exceptions to routines.