ScanSource Shows VARs the Way With Profit Maps

In recent years, ScanSource has established itself as a specialty distributor on the cutting edge of technology. The Greenville, S.C.-based company, which traditionally focused on point-of-sale (POS) and AIDC, or Auto-ID, products, has established new businesses around VoIP, security and RFID technologies.

But at the distributor's recent Solution City event in Dallas, ScanSource found that VARs were flocking to its new offering: Profit Maps, a series of business-consulting and training seminars focusing on best practices for sales, marketing and financial management. Bobby McLain, vice president of marketing at ScanSource, says Profit Maps became a hit with the event's 350 solution-provider attendees.

"It was standing-room only for many of these sessions," McLain says. "We did some research prior to the event on the business needs of the resellers, so we're offering them things like best practices on how to hire and retain the right salespeople, [how to] enhance their marketing and even how to deal with human-resources issues."

Profit Maps had been introduced at a previous Solution City, but it was at the Dallas event where it proved popular. ScanSource brought in outside consultants, such as the JS Group, a channel consulting firm headquartered in Somerville, N.J., and provided workshops and online training around four key areas: sales, marketing, operations and finance. In addition to the seminars and workshops, ScanSource is enhancing the online tools at Solution City's Web site, which offers downloadable course materials and presentations from previous events.

McLain says the distributor is also tying the business courses into its technical training so that VARs can better understand, for example, how to build a new vertical solution and then effectively sell and market the solution and brand themselves as an expert in that new vertical.

"You can't just sell speeds and feeds and get a group of resellers to move over to a new vertical market," McLain says. "You have to show them the way."

Therein lies the biggest challenge for ScanSource. The distributor has been stressing vertical solutions to its customers as a conduit to new technologies, such as VoIP and RFID. Jeff Yelton, vice president of merchandising at ScanSource, believes it's easier to adopt emerging technologies by focusing on a particular vertical, such as manufacturing and food/grocery, for RFID.

"I'd say the majority of the VARs at Solution City had strengths in at least one of two vertical markets," he says. "But the larger, more successful VARs know they have to get into new markets and develop new vertical solutions to continue growing."

Beyond POS

Another priority for ScanSource in 2006 will be encouraging its traditional resellers to explore the distributor's other business units, such as Catalyst Telecom, which focuses on networking solutions with vendors such as Juniper Networks and Avaya, and ScanSource Security Distribution. For now, Yelton says, the distributor won't merge its ScanSource and Catalyst Telecom sales forces, but, rather, will try to encourage more crossover during events like Solution City. In addition, ScanSource recently introduced a joint solution from Avaya and Symbol, which integrates Symbol's mobile-computing devices and wireless-network infrastructure with Avaya's IP-telephony software and mobile appli- cations. The objective, according to Chris Marlar, director of merchandising at Catalyst, is to combine voice and data technologies in one solution.

"We were finding two VARs in the same customer account--one was selling voice solutions and the other was selling data," Marlar says. "So we want to expose our voice resellers to more data solutions and vice versa."

Marlar believes joint solutions, such as the Avaya/Symbol combo, will help generate interest in convergence with resellers and demand from end users as well. ScanSource also says the Avaya/Symbol effort will allow Catalyst VARs to partner with ScanSource VARs on the same account, which will help eliminate learning curves.

Perhaps the most crucial part of ScanSource's strategy for 2006 will be its RFID Edge program. While the distributor says RFID interest is high, adoption has been slow, says Greg Dixon, chief technology officer at ScanSource. Part of the issue is that, while the RFID tag technology itself isn't incredibly complex, finding out how to integrate the data generated by the technology with the rest of the business infrastructure can be challenging. Still, Dixon says, with companies like Wal-Mart aggressively ramping up their RFID strategies, the future looks bright.

"Right now, our POS/AIDC VARs are the closest to adoption. We're telling them to come on in, the water's fine," Dixon says. "There's no doubt RFID is going to happen, and our VAR community is standing right in the middle of this opportunity."