Selling Services In A Tough Economy

VARs said that it's really a matter of educating the customers about how they can add value.

"We used to meet and schmooze with clients," said Rick Tashman, business development manager at Marietta, Ga.-based Syscom Technologies LLC. "Now we need to educate clients to gain credibility and come up with good methodologies."

One VAR said that his company "won't give away talent." Tashman noted that services that were once complimentary now come at a cost for some customers, but not all.

"Now we charge for helping people figure out business solutions, and what they want," Tashman said. "We have an up-front charge, which we never had before."

Interestingly enough, several VARs are seeing changes in how their clients hire employees, which can also affect winning contracts.

"It's a complete paradigm shift," said Becky Kramer, marketing director at Minnetonka, Minn.-based World Data Products Inc. "Companies used to hire strictly technology people for their IT departments. Now they're specifically hiring people with business backgrounds. They want to have more breadth of experience in deciding what is mission-critical."

VARs also agreed that to win contracts, it's now all about taking the long view--slow and steady wins the race. Yes, companies are spending, but they're more careful with their dollars, and often contracts that used to be signed in a matter of weeks now can take several quarters, or even years, for clients to sign on the dotted line. If you're going to convince a company to loosen their purse strings, it's now a given that VARs have to make a strong case when presenting ROI analysis.

Another factor driving longer sales cycles is the process of talking to the entire top tier of management, not just a company founder or CEO who approves contracts.

"It used to be a package that you presented to a company founder who wrote the checks," said Prashanth Vemuganti, president of Iselin, N.J.-based Pantheon Solutions Inc. "Now proposals get passed down from founders and CEOs to CIOs and CFOs and CTOs because purchases increasingly affect the whole company. You need to present your solution, but management needs to justify it."

VARs are also finding that location, location, location is not just a mantra exclusive to real estate. If you're not part of the customer's ZIP code, you're likely to be out of their comfort zone. As World Data's Kramer put it, "If you have the face-to-face, customers are more likely to let you into the vault."

"Many clients are saying, 'If you're not local, we're not buying from you,'" said one VAR. "You need to be in front of the customer--the trust factor goes a long way."

At long last, some of the more reticent manufacturers are realizing the value of local VARs, and the importance of their standing in their home base. To that end, vendors have been more willing to share profits with localized VARs.

"Even though you have to share, it's better to share than lose the whole contract," one VAR said. "Ten percent is better than zero."

VARs are also generating revenue from physical storage of equipment. "Not a day goes by that we're not doing take-outs from companies," said World Data's Kramer. "We see this because of co-locations and overbuying. Companies don't know what to do with the inventory and are willing to pay to have their equipment warehoused."

Solution providers were also in agreement that data storage is an area that remains hot. The consensus was that many customers are either not using all of their storage or not using it correctly, and the situation presents a powerful business case.

The bottom line, VARs said: Look at the big picture from another angle, have patience and bring in creativity to figure out how you can help the customer and help yourself at the same time. The dollars are out there, you just have to know where to look for them.