Differentials: Don't Sell Yourself Short

To succeed in business, you have to stand out from the crowd. Annie Gurton takes a look at how resellers can do this and discovers that honesty is the best policy

There are no prizes for knowing that reseller businesses have to make themselves different from others. That?s the easy part. Knowing how and what to do to achieve significant differential, and thereby competitive advantage, is another matter.

Many resellers and dealers are naturally different. They work in a specific vertical, for example, or sell products which are not widely available. Businesses which fall into those categories do not have to do much more. But the vast majority of other resellers sell the same brands in the same geographical area, and find themselves competing with very similar portfolios of services, with training, support and consultancy up there as the standard areas of value add.

Yet many reseller managers have only themselves to blame if they find differentiation hard, at least according to Joanna King, European marketing communications director with Visio International, a software graphics vendor. She says: ?Resellers agonise about how they can separate themselves from the crowd, yet they are the ones preventing quick and easydifferentiation.

?Resellers are so paranoid that their vendors and suppliers are going to work directly with their customers that they won?t let us near to their customer list, yet we could provide marketing and other help which would really set them apart.?

And, according to King, there is an imperative to work on achieving clear water between resellers and their rivals. ?Obviously there is rivalry, but it is not between the resellers and their suppliers ? despite the fact that many resellers regard suppliers as their arch enemy, and will defend their customer information until the end.?

That is fair enough, she says, but unless they are willing to co-operate with their vendors and to accept a situation of mutual trust, resellers are doomed to remain second rate also-rans.

?It is clear when you look at the more successful resellers that they have been bold and confident enough to entrust their suppliers with information about their customers. They have benefited as a result, and there is no question that the trust has been abused or that vendors have taken advantage of the knowledge to do a bit of direct selling. As far as I know, that is a fantasy. I suppose it happens occasionally, but all the vendors and suppliers are so keen to build on their relationship with their resellers that they really would not dare to step out of line.?

Chris Leak, marketing director of Pegasus Software, the accounting software vendor, agrees it is the generalist resellers that are facing the greater challenge to create a unique personality and portfolio, and agrees that the vendors have much to offer. ?One thing that resellers can consider is producing a newsletter for their existing customer base. It is a very good device for keeping in touch with existing customers and new prospects, without much cost or effort. The vendors can often provide high-quality editorial copy at no charge, and probably help and guidance with writing and production, as well as the mailing process. Yet not many resellers take up the idea,? he says.

Tim Beadle of marketing services consultancy PCMC says finding a credible angle for differentiation is not easy. ?Basically, many reseller businesses are very similar. Trying to put a unique spin on a business can be an obvious and transparent cosmetic device, which doesn?t fool anyone.?

The trick, says Beadle, is to identify differentials which already exist and then emphasise and exaggerate them. ?One way to start is to identify patterns and repeats among the customer base and then work out why that pattern exists.?

Beadle cites the example of a reseller which had a large number of solicitors among its customers and believed the reason for this was that the systems and software it provided appealed to that particular market. ?However, the sales to solicitors suddenly went into rapid decline, and they could not understand why, particularly as the decline coincided with an increase of marketing effort to that sector.?

The reason for the decline was that the sales rep that had a particular rapport with solicitors, and had been responsible for the high number of sales in that area, had left around the same time that the new marketing efforts were kicked into action. The previous success in the legal profession had been nothing to do with the systems or software that the company offered, so when that person left, the company was no different from any other reseller in the legal sector.

?If they had identified that person was the reason for their historical success, not the products or services they were selling, they would have ensured that person stayed, or sought to replace them,? says Beadle.

He says analysis of the customer base is the first step to differentiation. ?Look for a niche which fits the profile of the company and the individuals within it and then exploit it.? You have to work out what is important to your customer base, and then make sure you deliver what they want, preferably dressed up in a pretty marketing ribbon.

David Smith, channel sales and marketing manager at Microsoft, agrees that looking at customers and delivering the ease of use and uncomplicated support they invariably want is important, but adds that it is also useful to look at your competition. ?Listing and analysing your competitors, either geographically or by vertical sector, is an important step,? he says. ?Work out what their differentials are, and make sure that you do something else.?

He adds: ?Once you have identified an area which sets you apart from the crowd, and that might be a product or a service or a quality of product or service, then make a really big deal about it.?

You have to sing your message very loud, and, more importantly, consistently and over a long period. ?Marketing strategies based on business differential is not something which should be changed. You have to say the same thing time and again and over a long time, so that eventually it becomes an automatic association between your business and the message,? says Smith.

?First decide on what issue you want to be different, and then develop a slogan, a message and a sales routine based around it. You have to work at selling the message, and growth in market share will follow.?

He adds that, like Visio International, Microsoft regards relationships between resellers and vendors as key to achieving and sustaining differential. ?We want all our resellers to be different, not just from other resellers but also from other Microsoft resellers. We provide technology and marketing support which allows resellers to customise solutions and add value for customers, and then to promote those differences.?

Smith claims that Microsoft?s channel programmes are sitting there to help resellers achieve differentiation. ?The accreditation and certification courses that we offer are particularly helpful,? he says.

?Customers go out looking for resellers which are approved and certified, so getting staff which have the right training is a sound step.?

Nick Vossbark, sales director at The Last Word, agrees that persistence is crucial and it does pay off. ?There is a lot of disillusion among customers who have had bad experiences with resellers that claim to be able to deliver exactly what they want. A satisfied customer list should be examined closely, analysed and then the formula repeated.? And, he adds, the customer list should also be used as a marketing tool, for references for prospects.

?There is no more powerful marketing tool than a happy customer who is willing to discuss you with a prospect. A good list of reference names and addresses can really set you apart.?

Tina Cowley, marketing manager at Novell, says customers are looking for quality and independence. ?The first obvious step to achieving differential is by offfering greater quality relative to price than other resellers,? she says, ?but the danger is that resellers shave their margins so thin that they cannot sustain the quality.?

Alternatives include offering completely new services not yet available from competitors, modifying existing services or making them more easily available. Technology can often help, such as by being able to provide faster support response or hot-linked response direct to the user?s desktops. ?Once you have a differential like that,? says Cowley, ?you have to promote it hard and loud before the competitors latch on to it and imitate it.?

That imitation is bound to come, she adds, but every day of advantage helps. ?We have our own FUD-factor. Instead of Fear Uncertainty and Doubt, we promote Focus, Understanding and Delivery. Those are the things customers want.?

King recognises that the term partner is vastly overused in the IT channel, maintaining that true partnerships are rarely achieved. ?If only resellers would have confidence in the importance of their role, enough to know that they are not replaceable, then vendors and suppliers could help them far, far more.?

She also recognises that there are few completely green sales sites in the market, and most sales are centred on trying to win business away from competing resellers. ?People buy from people,? she says, ?and if you can put the right team together which instils confidence in the customer, you have a differential. Customers usually have a preferred reseller which they buy from, so your message has to be very credible and persuasive if you are going to win and keep them.?

Leak says that resellers often do not make enough out of their one big strength ? the fact that they are local. ?Most people like to buy from a local firm, either for sentimental reasons or because they recognise that they are more likely to get a rapid service. Most customers also see that a small local firm is going to care more and work harder to get it right than a large, faceless enterprise,? he says.

Leak suggests that resellers work harder to forge stronger links with the local business community, perhaps through the local Chamber of Commerce and other local business associations. ?They are often looking for speakers to address their meetings. For a computer expert to go in and talk about the year 2000, for example, or some of the latest technologies, without it being a sales pitch, can be interesting for them and a good differentiator for the reseller business.

?It is an excellent way to make contacts, and to promote the business and an independent source of IT information.? Such links also promote confidence and build on the reputation of the company in a subliminal way, Leak says.

Whatever you decide is your point of difference between your business and the others selling similar IT systems and services, there is no point in selling yourself on a point of differential which does not exist. Beadle says: ?It is sad to say, but honesty is not just the best policy when it comes to differential, it is the only policy.

?Lying to, or misleading customers invariably leads to far worse problems than looking them straight in the eye and telling them what you can do and how much it will cost. What?s more, unfortunately, it is a fact that by just being honest you can set yourself apart from other resellers.

?Unfortunately, many reseller businesses are engaged in promoting services which they can?t deliver or selling themselves on messages which are exaggerations or just not true. It is a short-term strategy which will be their undoing.?