D&H President Dan Schwab: Growth In Our Customer Base Bounds To Four-Year High

D&H Distributing expects to notch a 5 percent increase in the size of its customer base in 2017 thanks to a growing sales force and expanded credit line program.

The Harrisburg, Pa.-based distributor said the channel has for years been experiencing declines in breadth, with most manufacturers and distributors recording a couple of percentage point reduction in the number of resellers served, according to Co-President Dan Schwab. D&H was outpacing the market simply by maintaining the size of its customer base, Schwab said.

"Now, we're back in expansion mode," Schwab told CRN during the company's 2017 Fall Mid-Atlantic Technology Show in Hershey, Pa. "It was probably four years ago that we were expanding to the same degree we are today."

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Roughly half of D&H's overall growth, though, can be attributed to existing channel partners expanding their wallet share with the distributor, Schwab said. Since July 1, D&H's VAR business is up 22 percent on a year-over-year basis due in part to increased investments in education, according to Schwab.

D&H has helped many of its smaller VAR customers grow and go after larger opportunities through close collaboration around training and education, Schwab said. Secondarily, Schwab said some of the midsize resellers D&H has had longstanding relationships with have grown closer to the distributor as suppliers cut back on programs, services and support for the SMB channel.

"As vendors have fewer and fewer resources, they tend to focus on the larger accounts, very enterprise- or data-center-focused," Schwab said. "Whereas D&H is laser-focused on the small and midsize reseller."

Schwab attributes some of D&H's growth to May's announcement of the largest credit increase in the company's 99-year history. D&H said at the time that it would be making $115 million of downstream credit available to SMB resellers each month to help them grow their businesses.

D&H has upped the ante since the original program launched, Schwab said, and is now on track to actually add $150 million of downstream credit each month for SMB VARs. Many of D&H's resellers have historically focused on clients with 100 seats or fewer, but Schwab said that's starting to change as the company doubles down on helping its partners sell more advanced technologies.

"Our goal is to help that reseller land the 500-seat opportunity or the 1,000-seat opportunity," Schwab said, "When they do so, typically that will be outside their normal credit arrangements. D&H wants to make sure we're the partner that helps them overcome those challenges."

D&H has also in recent months hired a number of field and inside sales reps, Schwab said, and just approved the hiring of even more sales reps. The distributor's level of service has been attractive to new and existing partners alike, according to Schwab.

"The average D&H sales rep has 10 years of tenure, so they're very knowledgeable," Schwab said.

Southern Computer Warehouse has gone through four or five reps over the past decade with most of its distribution partners, but at D&H, the Marietta, Ga.-based solution provider has hung onto the same rep for the entire time, according to Julia Stewart, vice president of sales. As a result, Stewart said their D&H rep knows the account well and is able to provide consistent service.

Stewart also praised D&H's methodical approach to the market, saying the distributor "learns everything" about any new products it's taking on. This has been particularly helpful around Cisco, Stewart said, since they can be a difficult set of products to sell if you're not well-versed in them.

"For me, they're very helpful with what's new in the market," Stewart said. "Just the speed and accuracy with which our rep works with us."