Magazine Article | May 20, 2013

The Road To Survival Is Challenging, But Profitable

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By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

I’ve been writing for a while now about taking the important and necessary action of expanding your line card beyond the core technologies you currently sell. Never has there been a time when this was more important. Evaporating margins are one thing, while increased competition is another. In either case, many reading this article need to change their businesses to survive.

One way to survive is to offer what I like to think of as expansive solutions. Some might compare this with total solutions. I shy away from that phrase because it’s way overused. Everyone tells me that they’re a total-solutions provider. I don’t buy it. Expansive, integrated solutions incorporate a wide variety of technologies into welldevised solutions that solve a variety of business problems.

Look at the retail industry. Simply sell tried-andtrue POS (point of sale) hardware and software in that market, and you’ll find yourself getting beat on price by the iPad app store entries flooding the market. However, that competition becomes less a factor when you’re offering a multitechnology solution. App store developers and start-up VARs selling such solutions aren’t equipped to handle someone offering integrated solutions. They can’t do things like integrate digital signage and video surveillance. Of course, you can’t either if you don’t take the time and effort to expand your line card.

Beyond being competitive, you’re creating new revenue opportunities for yourself. Why shouldn’t you get the money? You’re the trusted adviser, connected and in tune with your customers’ needs and the issues of the markets you serve. No one knows your customers better than you. Sell them everything you can.

Competing On Price Requires A Business Change
Toss your playbook out the window. What worked years ago might not today. In fact, it probably won’t work today. Be creative, and push your vendor partners to do the same. As the industry transitions, it requires more forward thinking than ever. One of those areas that needs addressing is your business and delivery model.

The cloud model and offering solutions as a service are here to stay. While you hesitate and say that such things aren’t for your company, a new competitor who does offer such solutions is rising up. The fact is, many people are successfully using this model. Much of what you struggle with when you consider such a business model has already been figured out.

As you struggle, have you investigated who the vendors are who can help you? Have you pushed your existing partners to help you? Do you read all the articles in Business Solutions magazine, not just the ones dedicated to your primary technology? I’ve got news for you — we’ve been writing about the “as a Service” model for six or seven years. If you don’t have the back issues, go online and find past articles on pricing strategies, hiring the right sales people, and more. The answers are out there if you take the time to look.

I should warn you that the answers might lead to harsh realities. For instance, at a recent Ingram Micro event, Gartner analyst Tiffani Bova claimed that only one out of three of a reseller’s sales team will be able to make the transition to a recurring revenue model. This may force you to hire new talent and let go of sales reps who are unable to make the transition.

It’s apparent that the changes you need to make to your business aren’t going to be easy. Indeed, you might have really hard decisions ahead of you. Definitely not easy, but necessary if you want to remain relevant and in business in the future.

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