Dealers Aim for Service Profits

European computer dealers want to escape cutthroat competition on product supply by building service revenues, but few have the skills to operate a true value-add business.

According to a Romtec survey of 400 corporate resellers in 10 European countries, sales and marketing skills among dealers are particularly poor, as the majority of them rely on technical and product knowledge. But the respondents said their top priority was to improve their skills as quickly as possible.

Product revenues accounted for 46 per cent of the total business, but services accounted for only 29 per cent of revenues across all the resellers included in the study.

Russ Nathan, managing director at research company Romtec, said: ?Typically these services are product, rather than consultancy or project management related.?

Resellers taking part in the survey reported increasing competition from hardware suppliers, as a number of vendors have begun to sell direct, notably Compaq. Resellers are also starting to notice growing competition from other Vars and dealers.

They said their greatest strength lay in their ability to deliver a full service, which is often multi-vendor and cross-platform.

Training was seen as a strong priority, but it had to make a direct impact on sales, according to the survey. Resellers welcomed formal vendor accreditation ? as long as it included sales leads, special support lines and specific account management.

Hewlett Packard based its Star training scheme for networking resellers on the results of the Romtec survey.