Guest Blog Posting: Managing change in the channel...1 May, 2013
On the heels of the most recent ITEX event held in Las Vegas, I came away convinced that the independent dealer or reseller has a significant opportunity to grow revenues and profits in the ever changing office imaging and technology industry. My opinion regarding the same started with a conversation I had while standing in the check-in line at the Rio Hotel with a parts and supply distributor. He noticed my backpack with a familiar industry logo on the same and introduced himself. We began to chat about the people and companies within the industry that we both knew and then our conversation gravitated towards results. We both discussed how the industry landscape had changed due to mergers and acquisitions and how each channel was competing aggressively for market share. The highlights of the conversation included...
Recent OEM unrest will continue and will have an impact on the independent channel. Manufacturer relationships will continue to change in the out years and the dealer channel needs to remain flexible to adapt to the same. Revisit inventory levels and best practices around seasonal buying. Are you committing to a brand that you might be competing with directly in your local marketplace or representing a manufacturer that might be exiting the industry? OEM's are interested in hanging onto market share, leverage your local presence as a means to secure best equipment and aftermarket pricing and NOT your willingness to provide them with an open or large PO as a concession for best landed cost. Keep inventory levels low to hedge your bet and manage change (i.e. change in models, change in manufacturer presence, mergers and acquisitions, etc.) successfully.
The $5MM to $15MM independent dealer is presented both with immense challenges and opportunity. As mergers and acquisitions occur at both the OEM and independent levels, the local dealer will be challenged with "mass" as a benefit to prospects when competing against its larger foes. These so called "large" providers will tout a national footprint, access to multiple brands, technology allowing for solution-centric approaches, and size as a means to deliver cost effective pricing. To counter, continue to build alliances with other dealers, wholesale providers, leasing companies, and 3rd party providers that provide infrastructure and support that complement your offering to local prospects with a national presence and a desire to find a comprehensive provider. Become intimate with the propect's needs and deliver "accuracy, consistency, and speed" as a means to counter size. Clients value relationships, not a brand.
Attending the educational seminars and walking the floor of exhibitors present at the event reminded me that most of the products or solutions represented were focused on the independent channel and affording them an opportunity to broaden their scope of services without absorbing additional infrastructure costs. For instance...
- Numerous parts and supply distributors were present marketing their traditional products and services. However, most have built or will soon be introducing MPS and MS services to complement their offering and provide the independent dealer with a partner that can assist with prospects that require out of geography support. Evaluate their respective programs and select a partner that best aligns with your go to market strategy (i.e. response time guarantees, replacement policy, billing capabilities, etc.).
- Financial partners continue to be independent channel focused. More lease providers are beginning to offer invoicing solutions best representative of the solution sold... specifically those complex MPS and MS engagements. Seek out a provider that has a keen focus on employing technology as a means to serve your end users. Their deliverables and their customer service is what represents your organization in your absence when interfacing with your clients.
- SaaS based solutions are now the norm, not the exception. Dealers have access to solutions that do not require capital resources to acquire nor do they need to be housed on a local server to use their functionality. Invest in solutions that allow you to pay for them when utilized. Its important to employ solutions that allow the dealership to automate manual tasks. Automating tasks will deliver positive results on OI even if growing revenues cannot be attained YOY.
- Big data. There exists the opportunity to mine the data from a dealerships' ERP or CRM to truly impact revenues and profits. Targeted campaigns can be developed based upon data already captured and available. However, work with a provider that enjoys its core competencies in software development. They will be more prone to customize a solution tailored to address your needs without waiting for a new version or release targeted at an application that has already changed.
Although the industry is rapidly changing, the opportunity for the independent dealer to build alliances that far exceed its traditional reach and scope is the greatest the channel has ever seen. Having the foresight and the courage to consider changing existing business models to keep pace with these industry changes is a question that must be addressed by each.
Source: Coach's Corner Blog
Bill Salm, Jr. (www.linkedin.com/in/billsalm/) is a twenty-six year office imaging and technology professional capable of assisting an organization grow revenues and profits by employing technology to automate tasks. Feel free to contact him at email@example.com or 703-577-8529.