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Some Candid Advice For CDW And Others Launching Agent Programs For VARs

CDW, never one to be a follower, is piloting an agent program it believes can help VARs compete more effectively with Dell.

By using CDW's efficiencies and ability to quickly deliver a large spectrum of products at competitive prices, CDW Chairman and CEO John Edwardson believes his company can help solution providers free up working capital and become stronger competitors. I agree.

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ROBERT FALETRA
Can be reached at (516) 562-7812 or via e-mail at rfaletra@cmp.com.

The SolutionsEdge program calls for CDW to pay an agent fee to solution providers that source product through CDW. VARs would continue to service their customers much as they do today, while offloading product delivery to CDW.

If you are a regular reader of this column, then you know I've been talking for months about why I believe this strategy makes sense. And I know CDW will not be the only one to do this.

But while I believe a program such as CDW's fills a need in the market, there is no guarantee of success. My biggest fear is that CDW and others may not stick with these programs long enough to work through the issues necessary to make them successful long-term. This is going to be anything but a "build-it-and-they-will-come" scenario.

Nonetheless, I'm excited about it. There is a need for it, and CDW and its major competitors already have the systems in place to make such an agent plan work. They can all ship a variety of products from a multitude of manufacturers to any location overnight, and handle returns, billing and credit. And they can do this better than Dell, which is limited to its own products and a few peripherals it sources from other manufacturers or distributors.

What CDW, PC Connection, Insight, Zones, PC Mall and others don't have is a marketing program targeted at VARs.

I've said in the past that I believe agent programs are best placed with these players because they already touch end users. Some of those users are very small, so these companies are used to handling very small orders.

So let me give some free advice to John Edwardson and any other executive looking at this model.

First and foremost, you need to make a commitment. I've never seen a major strategy like this play out in less than 18 months to two years.

Don't assume the solution providers you want as your partners know what you are trying to do. Marketing in the form of advertising, face-to-face events, PR and so on will be critical and will have to be continuous if this plan is going to succeed.

You must be clear on rules of engagement. VARs will need to hear from you repeatedly that you are not after their customers but rather want to help them compete in a win-win business relationship. It may be obvious to you that this program would last about a week if you had any intention of taking their customers away, but they still need to be told that. Fear can be a great inhibitor to engagement.

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'By using CDW's efficiencies and ability to quickly deliver a large spectrum of products at competitive prices, CDW's Edwardson believes his company can help solution providers free up working capital and become stronger competitors.'

Talk up the successes. VARs that can free up working capital, get access to credit and, in short, invest more in the services portion of their business by teaming with you can be your best advocates. Help them make others understand that this works and can grow their business, too.

Paint Dell as the enemy and remind VARs that together you are more capable of satisfying customer expectations in both price and service.

Be honest when things don't go well, and commit to fixing them. Nothing builds trust faster than admitting that things should have gone better.

I'm excited about all this because I think it makes sense and the right players are making it happen. Success will come to those who are committed.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at rfaletra@cmp.com.

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