New business for the brave

Leon Mangan: Fortune favours the brave when times are tough

Although Government support is available to SMEs and banks, many mid-range companies that make up part of the backbone of UK plc have received no help.

Once thriving businesses are facing a slow order book, payment at glacial speed from larger customers and restrictions on credit facilities.

Britain’s resellers need to help these fundamentally sound end user businesses by creating tactical opportunities, enlisting vendor support, refinancing the sales pipeline and learning to love their best customers again.

Research conducted by Siemens with owner managers at Cranfield School of Management’s business growth and development programme found that smaller firms still struggle with integrating communications platforms and multiple devices to save time and boost customer service.

Many companies have telecommunications products that could manage legacy voice networks and accommodate IP communications, but in the boom years they never got round to integrating these investments properly into their daily operations.

The biggest surprise from the research was that small firms are not using web-conferencing, yet still allow staff to juggle three or four devices.

Good businesses can still strip out vital time lost to customer interactions and collaborate better internally by migrating staff to the same platform.

Small businesses often have fewer staff and work longer hours, so this is a huge opportunity for telecommunications resellers.

Another shot in the arm to channel businesses will come from the second innovation - greater financial and sales support in the supply chain to support sales or displace the competition.

We have observed that the value of hardware and software stock in the distribution channel is consistent in many sectors. Resellers should focus on unlocking end user confidence and with it, channel sales.

Resellers also need to ask for extended payment terms or rethink the level of supply chain support from their key vendors. Forward-looking vendors should be able to provide reseller partners with cash-back or incentive schemes.

Where no help is forthcoming, resellers may need to rethink risk and reward with customers. If they calculate a customer’s financial gains from a new IT programme and renegotiate the payment terms, new business wins can potentially become self-financing.

Payment terms or results-based bonuses should be structured to share out the risks and rewards, particularly when it comes to large customers.

Resellers also need to improve they way they serve their core customers, by offering them tactical services for the downturn, or ruthlessly standardising very successful product offerings.

This will make it easy for customers to continue using their services - but without resellers falling into the trap of over-servicing them, or worse, continuing to chase unproductive accounts that tie up vital staff.

These tactics could also include special payment terms, easing the user’s purchase decision and helping resellers build gross margin, support headcount and ultimately retain profit.

Understanding customer market dynamics, enhancing relationships and altering the economics of the supply chain is possible for the brave – especially those resellers that want to build and renew lasting partnerships.

Leon Mangan is channel sales director of Siemens Enterprise Communication