Customers need VARs to innovate

Listening to customers' needs is sensible, but channel players still need to take a risk on unproven offerings, argues Peter Austin

I have frequently expounded the virtue of closely tracking market trends – for instance, the potential offered by vertical sectors such as retail, healthcare or legal, and carefully gauging end-user technology challenges such as ever-shortening replacement cycles. But does the industry apply market research to its greatest benefit? And are there actually dangers inherent in the way we slavishly follow the modern adage, ‘always listen to your customer’?

Of course, understanding customer attitudes is an essential part of business. In the 1980s, businesses were heavily criticised for not taking customer needs into account and companies went to great lengths to shed this image. Failure to listen to customers and respond too slowly to inevitable market change resulted in disaster. You only have to glance at some wider business examples to witness this. Take the inexorable rise of the out-of-town supermarket that threatens the very existence of local grocery stores.

Those stores who carefully identify their customers’ needs and carve out a sustainable market niche for themselves are those that will continue to flourish despite competition from the supermarkets. On a larger scale, global companies have recognised that regular customer satisfaction surveys are crucial in identifying changing attitudes and demand.

It should be noted that implementing sweeping change too quickly can be almost as damaging as not changing at all. In the business world, thought must be given to the pace of change – drip feeding the introduction of new products and carefully assessing take-up at every stage.

Tailored financing programmes can help smooth the transition as the channel moves from shifting boxes towards higher value-add managed services from a cash-flow perspective. However, entrenched attitudes do not change overnight.

But new market opportunities are not just brought about by reacting to customer needs. Many hugely successful products and services have been launched without there being an apparent demand, driven instead by a company’s innovation and vision. We are not talking about technological invention here, such as the CD replacing the record, or the internet revolutionising global communications. Marketing vision is more about doing something differently, however simple.

The channel certainly has the potential to change perceived needs and challenge the status quo. Even relatively small innovations, such as ‘up-selling’ related services to a hardware customer base, can radically change a business. There are more than enough technology soothsayers attempting to predict the next big thing. Suffice to say new and previously unthought-of markets will always be just around the corner for the channel to tap.

The best approach seems to be striking a balance between traditional marketing techniques and measured risk-taking. But the risk on a VARs own cash-flow in the short term is definitely reduced if asset finance is employed to maximum benefit. Leading finance providers can construct bespoke packages to help them market their new equipment or services in the most commercially advantageous way. Getting customers to adopt new ideas is difficult enough without adding the extra hurdle of affordability.