It's not about coverage, it's about leverage

It's not about coverage, it's about leverage

For Australian resellers, the name of the game in the '90s has been coverage. Providing vendors with the extended account, market or geographic coverage has delivered a business model that has enabled revenue growth, though perhaps not always profit. However, as previously mentioned in my article, "Know your value proposition and survive" (ARN June 23, page 56), establishing a business model built primarily on the value-add of coverage, will not ensure that your company is in business in the new millennium.

Vendors want and need more from their partners than coverage and fulfilment - they want leverage!

In the context of technology sales, leverage is the ability to help influence a market for a vendor and leverage its product and/or services as part of a bigger solution. An example of this is Cisco working with Price Waterhouse. The ability to be able to create value for customers with added services and expertise helps position the reseller as something other than that of a commodity vendor.

This positioning brings significant leverage to the vendor whose products and services you resell, helping them to differentiate their content in the overall solution and to quarantine their products and services from commodity price negotiations.

What is driving this trend? Customers are looking beyond hardware and software for expertise. The transformation of their businesses in a highly competitive global economy is proving to be a difficult challenge, and customers are looking for help. Resellers with services linked to their product offerings will be the companies that customers will choose to engage.

Not one of us would doubt that this is underpinning the shift from a product orientation to a relationship orientation for both vendors and resellers. As Eric Benhamou, CEO of 3Com, says: "Customers are becoming less inter-ested in technology and more interested in solutions."

Resellers' sales forces need to shift focus from the product to the overall business solution: from selling to the IT manager to selling to the business manager; from emphasising product features to business impact; from reacting to customer requests to building long-term relationships in which the supplier can provide advice and expertise.

In summary, what is critical for a reseller's sales force is its ability and willingness to move from being "box sellers" to become "trusted advisers". This necessary shift clearly requires commitment from the reseller's senior management in such areas as training, remuneration and marketing.

For resellers who have successfully undergone this transformation, the picture is a rosy one. Their organisations will be able to create value for their customers and provide leverage for vendors seeking to differentiate themselves by positioning their products and services as a part of a total solution.

They will be essential to both the customer and the vendor. Now, that's leveraging!

Carol Johnson is principal consultant for channels and alliance practice Pelorus International. Reach them at:

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