PCnomics: How VARs Can Thrive In Tough Economic Times
Written by: Jay McBain, Director of SMB, LenovoIt is evident that customers across most market segments are cutting back their IT spending. With the increased competition for shrinking opportunities, it is a critical time for technology VARs to focus on their core competencies. Many VARs traditionally specializing in hardware sales, including PCs, have diversified their offerings to include services like remote monitoring and software as a service (SaaS). Other VARs are trying to define a niche in managed services and consulting practices.
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 VARs that offer a complete line of high-quality products with different levels of functionality will be better able to meet their customers' needs.
A customer that wants 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 VAR that offers a one-stop shopping experience. VARs should look to partner with vendors that 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 specialty applications. Customers are looking for VARs as "trusted advisors" to steer them to the hardware purchases yielding the best bang for their buck. VARs that 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 VARs can drive value through their technology recommendations, factoring in durability, reliability, energy efficiency, and the latest technologies. Some customers that have purchased high-quality PCs have been able to use them up to five years. For customers that are not ready for replacement equipment, VARs 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.
VARs should educate customers about the total cost of PC ownership, helping them to realize that more than 80% of the total cost of ownership comes from management and ongoing maintenance costs, not the PC purchase. VARs can help lower the ongoing costs through value-added services, such as remote monitoring, patch management, and backup services. Additionally, VARs should look for vendors that back them up with additional service offerings, such as 24/7 IT support. VARs can even receive credit toward future hardware purchases by using end-of-life recycling options from some vendors.
Finally, VARs should look for vendors that offer complete financing options to them as well as their customers. Plans such as 0% 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 VARs 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 VAR during unstable economic times. More importantly, these actions will position the VAR to emerge even stronger than before.