Business Strategies

Editor's Note: Show Daily guest columnist David Stelzl was one of four industry experts participating in yesterday's Solution Provider Business Strategy session, "Reality Business: A Makeover," hosted by T.C. Doyle, senior executive editor.

How does a solution provider move to the business model of selling solutions with valuable intellectual capital to produce a greater profit? I often make several recommendations including the following:

Move back in the technology-adoption life cycle. Most reseller businesses are built around a technology that was once (or is now) a hot seller. Think NetWare in the '80s, Unix in the mid-90s and SAP. Over time, products tend to commoditize as more resellers attempt to make money selling the same thing as the next guy. Solution providers have to resist the forces of inertia and focus on a market rather than on a product.

Solutions are built to solve problems. There is no lack of business problems to address today, and intellectual capital is more easily branded when companies are working in emerging markets. The closer resellers come to commodity product selling, the harder it is to have any unique offering.

Focus your mission. What is the purpose of your company? If your sole purpose is to make money, it's likely that not many people will buy from you. If your purpose is to supply products, you're likely to have thousands of competitors. Resellers need to have a passion and focus for solving relevant business issues. Resellers that add value must create that value by becoming more a trusted adviser and less a salesperson.

Modify your sales model. Sales have to be profitable. A traditional sales team that is built to sell lots of hardware often has a hard time selling project work. When it comes to complex integration deals, an expert is brought in to do everything but the initial introductions. This costly selling model can only work when there are projects of length under consideration. To be worth such a model, an account has to have what I call "stickiness" to it--a project that goes on and develops into new projects. Compensation models and account management practices all play a role in how this happens.

Forget about being agnostic. The old line, "We are brand-agnostic," is dead for resellers. Resellers benefit from strong vendor partners by teaming with them. Today's partner programs are among the best we have ever seen. VARs need to leverage these programs to increase profitability. Vendors are looking for loyalty, and if you are willing to give them that, you won't be far from becoming their go-to partner.

David Stelzl is president of Stelzl Visionary Learning Concepts, a third-party consulting company based in Charlotte, N.C., that works with solution providers with different but related needs.

Contact David Stelzl at [email protected]