CDW's CEO Richards: Customers Listening To Our Story

Nearly a year after taking the reins as CDW's CEO, Thomas Richards is putting his mark on the company with increased resources, more solutions and services initiatives and -- thanks in part to Charles Barkley -- a story to tell.

At the Global Technology Distribution Council's Vendor Summit in Newport Beach, Calif., this week Richards shared some of the changes and improvements he's made since he succeeded John Edwardson as head of the Vernon Hills, Ill.-based director marketer on Oct. 1, 2011.

"When I got to CDW [as president and COO in 2009], I asked John Edwardson what our story was. He said we don’t really have a story. I asked, 'How do we communicate to people who we are?' He said people know who we are and what we do. I said, 'We need to work on the CDW story,'" Richards told the crowd of distribution and vendor channel executives.

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So, Richards said, CDW hired an advertising agency, which came up with the slogan "The Guy Behind The Guy" to describe CDW's role as the back office for corporate IT departments. But, audience testing found only 60 percent of customers loved it. "It was offensive to some people. Why would we introduce anything that offends any of our customers? They said it's funny. But, we worked too hard to get a customer to lose any of them based on an ad," Richards said. "So, I became known as 'The Guy That Shot The Guy.'"

Back to the drawing board they went, and CDW decided to "have some fun telling our story," Richards said. They hired Charles Barkley to appear in a campaign in which the former pro-basketball player is hired by CDW as a ringer for its corporate hoops league.

CDW got 100 million impressions from the campaign, including 5,000 people who downloaded it from the company's website. "We even had a couple of customers go to the website who told us 'I didn't know you guys did this' and it started the sales process," said Richards, who knows a thing or two about basketball, having played the sport at the University of Pittsburgh.

Meanwhile, Richards has been busy bulking up CDW's resources too. The company now has 1,110 specialists and field sales staff, compared to 635 in 2007, he said. Revenue has increased as well. Through the first two fiscal quarters of 2012, sales were $4.90 billion, up 8 percent from $4.54 billion in the same period last year. The company's also earned $47.7 million through June 30, compared to a $39.0 million loss in the year-ago period.

NEXT: More Training Means More Business

Many of those new resources are focused on being proactive with customers, Richards said, as the company looks to shed its image as a products-only reseller.

"We make over 3,300 face-to-face sales calls a week," CDW’s Richards said. "We make over 125,000 proposals a week. We make over 275,000 customer contacts a week. When we think about the value CDW brings to market, I think about the number of touch points. I believe people buy from people. I buy from relationships. We sometimes get wrapped around the latest gizmo and not about listening to what people need."

Richards cited as one example a customer who called CDW two months ago on a Friday asking for 25,000 hard drives to be delivered the following Monday. "They said can you do it? We got it done. Think we have a customer that is more loyal to us? Absolutely," he said.

The next step is trying to better organize and utilize some of the deep customer information that CDW has acquired through the years, Richards said.

"I've said about CDW that we're the biggest small company I've ever seen. We're still immature in analytics and processes and go-to-market rigor," he said.

Richards has increased the number of sales training hours each associate gets from about 186 hours to 255 hours, decreasing the number of hours around systems and increasing skills in more technical areas.

"We've also changed the testing process. We used to give three or four shots to pass the test. Now you get two shots. Are we trying to be hard and firm? No. But, we are trying to be better prepared when we sit in front of a customer," Richards said.

CDW had quantified a 17-percent increase in productivity from sales people passing the revamped training, he said.

"I had a fun debate when I first got to CDW. Someone said we were in the pick, pack and ship business and we sell hardware. But, I said if I'm a customer and I need 1,000 PCS with asset tags shipped to 40 different places, that's not pick, pack and ship; that's solving a problem. So we started down the path to think more deep around solutions," Richards said.

CDW's regional services strategy, jump-started with the acquisition of Berbee Information Networks many years ago, has been challenged to grow in the market because of competition from local VARs, but Richards noted that CDW has expanded its in-region service delivery staff from 300 people to 580. "We have to go where we have customers," he said. "It's tough to plant a flag where we don't have customers."

Long gone are the days when CDW can expect to win business based on providing the lower price to customers, Richards said.

"Don't assume that if you're relevant yesterday, you'll be relevant tomorrow. I say to the CDW team all the time that I don't care how big we are; if we don't drive value and relevance, somebody will."