Distributor Shares Secrets To VAR Success

How do you succeed as a distributor? How about by focusing less on how VARs can sell product and more on how they can improve their business. That's just what ScanSource did last week when it brought nearly 900 solution providers to San Diego.

The Greenville, SC-based value-added distributor dedicated the first half of the one-day Impact Now conference to keynotes and sessions aimed at helping solution providers recruit and retain sales reps, improve customer satisfaction, find venture capital funding, and even market themselves to would-be suitors.

"ScanSource is my favorite distributor by far," said Stephen Wright, president of Wright Business Technologies, a Houston-based solution provider who attended the conference. "They really care about the reseller. Even the conference—half the sessions are not on selling to us. They're more on how we can sell more. And that helps them sell more."

Richard Lowney, CEO of Clearview Software, an Amherst, NH-based independent software vendor, said that ScanSource wants to move a lot of hardware, but the company has recognized the need to move solutions whether product-based or technology-based.

"ScanSource Knows we know what the customer needs, and that we understand the vertical market," Lowney said. "They realize companies need to partner with people like us because we know where the issues lie. In the past, you might sell hardware, but you got out of town before dark. With solution selling, you need to be involved."

In the past, ISVs like Clearview were treated as a necessary evil for vendors to sell their hardware, Lowney said. "But we don't feel that way with ScanSource," he said. "They make us a necessary part of a sale."

Mike Baur, CEO of ScanSource, said that, as a value-added distributor, ScanSource's goal is to find ways to help solution providers get together and network with each other over business and technology issues. This is the first year for the Impact Now conference, which morphed from the company's regional Solution City events it held the past couple years, Baur said.

"We've made an industry event with a trade show to help you with business issues and keeping up on the latest products," he said. "The typical trade shows are extinct mainly because there is some vested interest in keeping it alive. If this one doesn't work, we will just let it go away."

NEXT: How to hire and retain sales talent

Russell Riendeau, senior partner with The East Wing Search Group, a Barrington, Ill.-based executive employment agency, talked to solution providers about how to hire and retain sales talent. The first mistake many companies make when hiring salespeople is assume the best candidate is one with industry experience, Riendeau said.

It would be great to be able to grab such a person from a competitor because he or she would bring in new business without training, Riendeau said. "But you can't do that," he said. "I can't do that, and I'm a head hunter. It's because people are resistant to change."

Riendeau said there are two types of salespeople, those who couldn't sell guns in a prison, and those who could sell a plasma TV to an Amish farmer.

The average salesperson in the US stays with his or her company between 2.7 years and 3.3 years, and the average US company has a yearly sales staff turnover rate of 25 percent to 35 percent, Riendeau said.

"You only have about three years to get the best out of him," he said. "You have to be conscious of the amount of time he'll be around, and your turnover. So you need a good system."

And that system includes hiring alternatives to poaching from a competitor. Riendeau said such hires typically come with non-compete agreements, different compensation requirements, non-disclosure agreements, and resistance to providing reference accounts because he or she is still working with the current employer.

"You are trying to buy business, and it doesn't work," he said. "If they come to you for money, they will go somewhere else for money."

Riendeau said that the average salesperson brings a boost to business of only 10 percent over the first one-and-a-half years of employment. "So forget the book of business," he said. "It's too difficult."

Riendeau offered solution providers a number of tips for enhancing their talent.

First, he said, companies must be pro-active in looking for talent. "You have to always be looking," he said. "Have your employees always looking."

Second, he said to have a realistic and a written job description. "If you don't have one, how do you know what you are looking for," he said.

It is also important to have a list of core competencies and initiatives for what you want a new sales rep to do, and make sure he or she follows them, he said. "For example, their goal may be to set up two network groups within six months and make 50 cold calls a week," he said. "Once you set these numbers, don't worry about if they come from outside the industry."

Fourth, Riendeau said to get documentation from a new salesperson as to their prior salary. "Don't believe the person," he said. "Do some salesmen inflate things? Maybe out East. Get copies of all documentation. Get a copy of their W-2 or a pay stub. If they can't show it, kick them out."

Next, he said to make a clear six-month goal and stick to it. "At the end of the day, what matters is, did they get the job done," he said.

Riendeau also suggested solution providers look around their office and see if they are providing a place where people want to come to work. "Do you have an attractive place?" he said. "Do you have a distinct advantage to get somebody to come to work?"

Solution providers also need to be willing to adjust compensation plans as needed, and not be afraid to get rid of under-achievers.

"What's 'low turnover' in Americanism?" Riendeau said. "'Socialism.' We are not a socialist state. If you are not willing to have turnover, you will be out of business."

Finally, Riendeau said there is one sure-fire way to eliminate employee turnover: hire only the boss' relatives. "They never leave," he said.

Barry Walker, director of sales at Merrill and Associates, a Brea, Calif.-based Avaya, Extreme Networks, and Juniper Networks solution provider, said Riendeau was on the money in terms of recruiting sales talent.

"The first thing people look for is experience," Walker said. "But we need to distinguish ourselves to get good candidates. Some of the points he made about how to market your company, and the checkpoints, are very new for us. And beneficial. We'll probably go back and implement them."

NEXT: Improve the customer experience

Jeanne Bliss, an author and presenter with a focus on the need for improving customer experience, stressed the need for VARs to have a "chief customer officer."

Bliss said that each company has many different types of employees, but that customers do not know what each person does, making customer satisfaction an important part of everyone's job.

"Forty-seven percent of customers believe there is no difference between competing brands," Bliss said. "So you need to wrap customer satisfaction into the customer experience."

The customer experience comes from many different areas, Bliss said. For instance, instead of managing custom interactions, companies should make sure they support customer goals. And instead of selling products, they should be offering complete solutions. "Because 89 percent of customers with good buying experience are likely to purchase from you again," she said.

For instance, Bliss cited the service technician who, instead of just taking care of one issue could be key to building a good customer experience. "Do you think of them as a brand preservation hero?" she said. "Do they think that way? Do you think of your technical depot as a brand preservation center?"

Finally, Bliss said that it is important to understand why customers leave. "Do you know why?" she said. "Do a loss-control review once a month. Call five or 10 customers to find out why they left."

Clearview's Lowney said that knowing one's customer is and how to improve customer experience is a big issue, and the idea of having a chief customer officer is one whose time has come.

"Before, people thought the focus should be on features and benefits," he said. "But the customer wants to know, if it breaks, can I depend on you? If there's a paradigm shift, will you be there? Bliss reinforced what we see. Her vision is, this is somebody's job."