Talking up a revolution

I love a good motivational talk. In fact, it wouldn't be bad actually being a motivational speaker for that matter.

I'm sure you know the drill. The speaker visits your conference or company off-site and for a princely sum will speak for an hour on how to overcome obstacles, make your business all that it should be, and most importantly, tell you what you're doing wrong. Then they hop on a plane and fly business class to some other exotic location.

Funny thing is, we're prepared to put up with someone who will presume to know our business better than we do, because they may offer a few choice morsels that make sense.

I had one such experience on Hamilton Island at Siltek's annual Reseller Conference last week (yes, I'm writing this from the hotel room looking over the beach - life's tough).

Martin Grunstein is an excellent motivational speaker, in the most emotive sense of the word. I reckon even I could make money out of the PC business now.

In his talk, Grunstein chose to hone in on that ever-present bugbear faced by all resellers in the consumer and SMB markets: falling margins.

So just what's behind falling margins? According to Grunstein, our constant preoccupation with fighting pricing wars is only encouraging customers to screw down pricing even more.

"I believe it's the assumptions we make in business that cost us money," he offered. "We assume price is the differentiator when customer service and support may actually be the key to winning more sales."

Certainly my conversations with many resellers here support that fact. One mid-tier reseller said he is surviving off the back of maintenance contracts that guarantee a regular healthy cash flow.

One small dealer from Sydney's northern beaches, who maintains margins of around 15 per cent on his own PC systems and peripherals, actually refuses to accept the falling margins story. Good service, loyal and local customers and word of mouth have kept him out of trouble for years, he claims.

Interestingly, Grunstein also offered these tips, and more. Customers are actually after a justification for the product or service you have on offer - price is not the issue, he said. This customer theory does not account, however, for the "external" pressures of falling hardware prices and simultaneous performance increases - aka Moore's Law.

What I thought was prudent was Grunsteins' challenge to the channel's understanding of "value". Some choose to segment a "value-added reseller" from any other reseller or dealer. The question is, why?

There is no reason why all resellers can't offer "value". Problem is, we get stuck in the mindset of just thinking about IT products, which at the end of the day are just bits of metal and plastic.

Grunstein says he is happy to add value to anyone's business, free of charge, by doing such things as writing for company newsletters, as long as there is mention of his efforts being courtesy of "Siltek".

Naturally, I seized the opportunity, so expect to read a Grunstein opinion column soon. Despite all preconceptions about motivational speakers, it's become clear to me that the IT industry needs the equivalent of sports psychologists. It's time we woke up to the fact that IT is a mental game. Smart marketing and customer relationships win the day, not the latest PIII processor.

Oh, I'm sorry, you knew that already.