Guest Column | May 18, 2009

Successful VARs Stay Close To Partners In Tough Times

corace_russ_printek

Written by: Russ Corace, Executive VP of Printek, Inc.

"These are the times that try men's souls." That famous quote has never been truer than now, and certainly seems as applicable to the hardware B2B market as any other. While many mobility VARs and hardware manufacturers are finding it difficult to navigate in these rough economic waters, some tried and true philosophies are important to remember as you seek stability for your business. For VARs, good relations with their hardware vendors has always been an important aspect of their long-term business strategy, but in troubling times and down markets it doesn’t hurt to be reminded of all the reasons this is so. Good partnerships are not so much a “misery loves company” as a “strength in numbers" phenomena when things get tough, and emphasizing the synergies you gain from these relationships could be critical to your survival.

All VARs, like other businesses, strive for differentiation and distinction in their competitive fields. The ability to remain “special”, above the fray of commoditizing forces, is a key to any successful business, preserving pricing power and profitability even in the worst market climates. VARs who work closely with their hardware vendors in the following critical areas can often weather the storm better than their competition.

Application Knowledge
You know your customers as well as anybody, right? You understand their business processes end to end, in sometimes excruciating detail, in order to put together the mobile solutions that best serve their needs. But have you seen fit to pass this application knowledge along to your hardware partners, in the right context? Everybody benefits in this sharing of information; hardware providers clearly benefit by gaining the ability to hone their offerings to best serve the needs of the VAR and their customers, adding features and capabilities which solve specific problems and expand market coverage. And VARs benefit by the improved efficiency reduced integration time gained from a better match of hardware to solution the first time.

Some of the most innovative features of our printers have come from just this type of knowledge sharing, and we have passed the benefits gained along to our VAR partners several fold.

Targeted Sales Efforts
The fortunate truth about mobile solutions in this economic downturn is that not everyone has stopped buying. In fact, in selected verticals and certain pockets of the business market, the productivity enhancements, cost savings, and business process re-engineering which mobility offers are seen as the key to digging out of the profitability slide. This is driving robust sales in some application areas, such as field service, DSD (direct store delivery), and warehouse management. Healthcare mobility applications also remain steady to rising due to the recession-proof nature of that sector and the desire to drive significant cost out of those processes millions of people touch and rely on every day. The problem remains on how to discover these opportunities and reach these customers. This is where close partnerships between small VARs and larger hardware partners can be particularly important.

In many cases, hardware manufacturers offer their closest channel partners significant market development funds (MDF) directly or as a rebate to attained sales. Manufacturers are often not best at generating end user leads, and often find it much more efficient and productive to provide MDF to their best VARs to generate leads which will inure to the benefit of both parties. Successful VARs take advantage of MDF and other cooperative marketing programs with hardware partners, particularly in difficult times when cash is in short supply. One common problem is that VARs, particularly newer or smaller ones, do not have their own marketing function or the marketing know-how to deliver the right message to the right audience. This is where a close partnership with their hardware vendor can mean the difference between limited market exposure and business-driving campaigns, leveraging the resources and know-how of the supplier to achieve the common goal of successful sales.

Product and Vendor Selection
One of the keys to repeated successful system integration, the lifeblood of a profitable VAR business, is the correct selection of the hardware used to construct their customer solutions. Mobile VARs in particular need to demand devices which are rugged, reliable, and flexible to ensure robust solutions which satisfy customers on day one as well as provide the best uptime possible.

Ruggedness and reliability are essential for the best solution experience, and so culturing hardware partners who understand this is critical to the VAR's success. There is no question that the "out-of-office" environments routinely encountered, and the work culture of the field workforce strongly justifies the specification of ruggedized devices. Non-rugged devices will work just fine for a time, but the statistics of typical events (devices dropped to concrete, banged on door sills, etc.) will quickly catch up with you, at which time the decision reverts to simple math. How many non-rugged devices will you need to buy to fulfill your uptime requirements vs. non-rugged devices for the same level of fulfillment? The answer is clear and points to the selection of ruggedized mobile equipment as the best business decision.

Product flexibility is important in creating systems out of common components that can be configured in a myriad of ways to help solve a wide spectrum of customer problems. Close partnerships with hardware vendors with a bent towards flexibility improves the chances that the VAR will be able to satisfy a wide range of needs with the lowest amount of inventory possible. Multifunction mobile printers (MFMP), for example, which, in addition to providing the platform for leaving receipts, invoices, inspection reports, tickets, etc. might also provide the credit card swipe required for transaction processing, or a port for adding barcode scanners or RFID readers to a solution otherwise incapable. Printek mobile printers, for example, offer maximum flexibility by emulating most popular printer brands, allowing you to choose one hardware printer partner yet cover all possible legacy applications, including traditional desktop apps.

Read Printek’s white paper, “Five Tips for Selecting the Best Mobile Printer” for further information on how to achieve the greatest value and return on investment in a mobile printing application.

Service and Training
Unfortunately, as competition grows in the VAR plane, and in the tier above them where hardware suppliers operate, a tendency towards commoditization can occur. How can a VAR distinguish themselves in such an environment? Pricing can only take you so far, as competitive gyrations in pricing clash with the hard limits of profitability and price equity. Expanding your offerings has value, but can be cost-prohibitive in tough times.

Service and training is the answer, of course. The days where success through simply offering the best business solutions at reasonable prices ended with the steady rise of global competitiveness in the hardware markets. Service innovation and excellence is something your competitors either can’t or won’t necessarily be able to match, and thus offers you a chance at real distinction with long-lasting effects. Having like-minded hardware partners, leveraging their service offerings, processes, and best practices, can go a long way to making you a “vendor of choice” in your market. In fact, it is exceedingly difficult for the smaller VAR to provide top of the line service to their customers if their hardware partners don’t provide equally superior service to them first. Demand the highest level of product training from your partners and pass that along to your customers for the shortest system assimilation times and the greatest satisfaction ratings.

You can never abandon product innovation (yours or your vendor partners), but recognize the fleeting nature of simple hardware advantages and ground yourself with a market advantage you can control – service. Your close hardware partners will be a critical element of this task.

In conclusion, close partnerships with hardware vendors, while always important to mobile VARs, has never been so critical as it is in these difficult economic times. Those resellers who are able to culture these partnerships and leverage the financial, operational, and marketing muscle of their hardware vendors will be more successful and able to weather the storm better than those who do not. Benefits to be had with this strategy are many and varied, and are shared equally between the VAR and the hardware supplier.



About the Author
Russ Corace is the Executive Vice President of Printek, Inc., a company which has been a leader in innovative business printing solutions with a 25 year history of delivering products for mission-critical industrial and business applications. Besides general management and business development activities, he is responsible for all technology creation and customer service / technical support at the company. Russ has been with Printek for nine years. Prior to Printek, he spent 18 years developing advanced technology in various engineering and management roles in the medical and biotech marketplaces, fields also known for their adherence to principles of zero tolerance of product failure. Russ has advanced degrees in engineering and over a dozen patents in instrumentation and medical technology.


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