D&H's Services Prowess Pays Off In Double Digit Sales Growth

When VoIP Supply, an Amherst New York solution provider, was recently looking for help pulling together a "rush" order for 1,000 Cisco phones, including hard-to-get codes used to link the phones to a VoIP system, its executive team knew they could count on D&H Distributing to come to the rescue.

The quick turnaround on the 1,000 unit order with technical support to provide the codes for the VoIP system is the kind of request that would have flummoxed larger distributors, but not D&H, says VoIP Supply Chief Marketing Officer Garrett Smith.

"D&H was able to cut through the red tape and get us all the MAC addresses and serial numbers so we could get them preloaded in the VoIP system and get the customer up and running quickly," said Smith. "That allowed us to delight the customer." And it opened the door to new business with the client, said Smith.

D&H competitors would likely have charged an exorbitant amount for a quick turnaround on the VoIP system solution and even then might not have been able to quickly provide the MAC addresses to get the VoIP system up and running quickly, said Smith.

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D&H's high services quotient combined with the large number of orders drop shipped daily from the distributor to customers has made D&H, a 93 year year old, employee-owned company, a favorite of SMB VARs. "D&H is like an extension of our business," says Smith. "For me it's a great relief to have a partner like D&H you can count on and rely on."

Ultimately, Smith says it is D&H's small medium business (SMB) VAR services focus that separates the distributor from competitors. "People there seem to care a lot more because they have skin in the game," says Smith. D&H says that SMB services focus has allowed the Harrisburg, Pa. based distributor to post an amazing 374 consecutive quarters of profitable business. What's more, it has resulted in 12 percent organic revenue growth year over year for the last dozen years. No small matter in an era where other distributors have grown through acquisition. And D&H just closed its Fiscal Year 2011 ended April 30 with 10 percent sales growth to $2.6 billion.

D&H Co-President Dan Schwab says D&H's impressive financial track record is due to its steadfast focus on the bread and better SMB reseller (81 percent of D&H's VARs serve customers with between 1-20 employees). SMB remains the fastest growing sector for D&H accounting for a 20 percent increase in sales in the last fiscal year. And D&H's system builder business -- a perennial SMB business -- was up 14 percent in the last fiscal year.

NEXT: Cisco's VoIP SMB Success

Schwab also credits new networking products likes Cisco's VoIP products including the new Cisco UC320 unified communications product aimed at offices with fewer than 25 users as driving SMB sales growth.

Smith says that Cisco UC line and PBX based products are two of VoIP Supply's fastest growing products delivering 40 percent year over year sales growth. "We have been surprised by how well Cisco solutions have been embraced in the SMB," he said. "Cisco has done a good job of taking what worked well in the enterprise and then understanding the SMB market and making it work well in the SMB."

Smith says he has seen a big difference between the service that the fast growing VoIP Supply (sales grew 27 percent to $20 million in 2010) has received as a D&H customer versus the service he experienced at larger distributors. "Even though we are growing, we are still just a small blip on the screen for larger distributors," he said. "At D&H every account is treated the same - no matter what your size. That is their secret sauce. They care if there are issues with a customer. They are proactive and get out in front of them. There is a high-touch with D&H that you just can't get from the bigger distributors. That is why we keep coming back to D&H."

That "high touch" has resulted in VoIP Supply working closely with D&H on emerging market opportunities, said Smith. "They are always coming to us and asking how they can help grow our business," he says.

Smith says he is even willing to pay more and settle for a smaller credit line because of D&H's high service levels. In fact, he says, VoIP Supply has shifted the majority of its business to D&H since it established a relationship with the distributor 18 months ago.

Even as some larger distributors have cut back services to SMB resellers, D&H has added services muscle. D&H offers each customer a dedicated account representative. And this year the company added a D&H "Concierge Service" providing a single point of phone contact to address any customer question or problem. That's a big differentiator in a business where SMB VARs are often shuffled from one department to another and sometimes relegated to phone answering pools or overseas call centers.

Schwab promises that the new D&H Concierge service will be able to quickly resolve issues by providing a single point of customer contact dealing with all departments from credit to sales to warehouse. There will be no transfers and no multiple operators, he said, "just a start to finish answer."

Schwab says offerings like the D&H Concierge service are part of a company culture that puts the customer first. "We've been able to maneuver through the financial storms because of our focus on SMB, service and our core values," he said. "From where I sit it's all about our extraordinarily, passionate people who are willing to go above and beyond what any other distributor is willing to do for their customers."

Schwab says he is confident that D&H can continue its robust sales growth by continuing to lead SMB VARs to new emerging markets including the Tablet opportunity. He is looking forward to tablets from HP, Lenovo, Toshiba, Asus and Acer.

That said, Schwab cautioned that it will require a "tremendous amount of foresight, fortitude and resources" from SMB solution providers to take advantage of the tablet opportunity. "It is all about heavy lifting," he said. "It's a challenging environment. The world keeps changing. In order to continue to achieve the growth we have you need to provide the requisite level of programs, education and service. We are optimistic about the new fiscal year, but not naive. We have been able to grow our business consistently by staying laser focused on driving value. We don't think that will ever go out of style."