The VAR Guy

Here’s a situation that may sound familiar to many small-business entrepreneurs. A very bright woman, let’s call her Betsy, has a business providing training to middle managers, and her client has been the HR department. Now, with the economy in recession, her pipeline is not as full as it once was. Training budgets–at least for middle-level employees—are being slashed. Betsy feels nervous about the future of her business. If this trend continues, she will have difficulty making ends meet. Here’s how she plans to change course.

Our coaching led her to consider new options as she navigates the current turbulence with a view toward turning a problem into an opportunity. Although she teaches English as a Second Language (ESL), her story certainly applies to solutions providers. Here’s a bit more on our guidance to her:

• Plan your future market strategy. Are middle-managers your ideal clients? While they have been your bread-and-butter up until now, what about C-level executives? With business becoming increasingly global and more competitive, the advantage of being completely comfortable with English is no small issue to CEOs, COOs and others in the corner office. While Betsy’s business model up until now has been teaching classes of a dozen mid-level people at a time, she could reposition herself as an ESL coach working one-on-one with senior management–and charging a multiple of her current fees.
• When business contracts, go broader and deeper. She has identified a market of 20 companies in her area, mostly Fortune 500 technology firms. That’s a great start, but what about the hundreds of companies just under those big ones? Would their top-level executives perhaps have even a greater need for ESL coaching? And what about other-than-tech sectors–tourism, for example. Wouldn’t an up-and-coming hotel general manager need excellent English to advance in her company?
• Get in the business networking mix. How will Betsy get in front of these new prospects? She hasn’t spent a lot of time thinking about (or engaging in) business networking. But she’s smart, attractive and engaging and should have no trouble building a referral network through attending Chamber of Commerce events, joining a business referral group and making sure everyone she knows is aware of what she does.
• Craft a new message. When Betsy does get in front of these high-level prospects, what will she say? We talked about imagining meeting a potential client at an event. What would you say to introduce yourself? How would you find a way to ask, “Are you less competent in English than you want to be? Is that holding you back? Why do you tolerate it? Do you want to do something about it? What would it be worth to you to leave your insecurity about communicating in English behind you forever?”

Many small-business owners cling to their original business model, whether it was a model they intentionally conceived or one that evolved on its own. Entrepreneurial business has to evolve to survive. Betsy’s business teaches some valuable lessons about identifying new market segments, repositioning existing services (perhaps only slightly) to appeal to new customers, and evaluating pricing structures to be in line with customers’ expectations.

What else would you have advised Betsy to do or think about?

Contributing blogger Mitch York is a personal friend of The VAR Guy. York coaches executives who are evolving into entrepreneurs. Find York — and his personal blog — at www.e2ecoaching.com.

Twenty minutes — that is all it takes to become “a knight in shining armor” in your client’s eyes, adding stickiness in all of your business relationships. What do I mean by the 20-minute miracle? The 20-minute miracle is something that all successful IT Professionals can perform automatically. Let me explain.

The 20-minute miracle is simply taking the time to sit down with your clients so that they completely understand the technology that they are using or if you are in sales, this seem principle applies to increase your IT sales. When clients are educated with technology they feel more comfortable using it, purchasing it and even recommending it to others. It doesn’t matter if it is on the desktop, mobile devices, web services, server architecture or printers. IT Professionals must take 20 minutes to sit down with their clients so that they completely understand everything that they use on a daily basis or looking at investing in.

Coming up with a 20-minute miracle strategy in your business today will be one of those value added actions that your business can do for all your clients. This is critical especially as we move into a time when uncertain economic conditions are on the horizon in some markets and here for others. When you are taking care of your clients needs and listening carefully to what they really need and hitting their business requirements will position you as someone who cares about your clients needs and eventually set your company up for success and even you personally as the individual.

We have to go deep and make sure that we are addressing all of our client’s concerns, and not skim over the top and expect our clients that they would just get it. Our clients are just as busy as we are. We must connect with people, the technology is very important; however, the people side of the business is the key and critical component.

In my personal experience, I have never won business from another IT provider who took care of the personal side of the business; this just doesn’t happen. When I am meeting with clients or prospects to discuss reasons why they are switching providers, the number one reason is lack of communications which is ultimately a breakdown in the people side of the business. However, a balance of the people side and the technology has to occur, you cannot be to far on one side or the other.

In our day to day business we can do everything right in the server room; however we only need to make an error on the desktop only once that may lead a client to look elsewhere to service their IT needs. When we make errors that affect the daily lives of our clients they begin to question how we do things, our creditability and our knowledge.

In my days as an IT technician, the end user was the number one priority and anything that affected the end user experience was dealt before any server challenge that the end users really didn’t experience. This is not limited just too technical challenges. Your accounting department, sales, and every department in your firm must practice the 20-minute miracle.

What else can your team do to ensure that your clients are looked after? There are a number of simple daily activities that your staff can do, like ensuring that a follow up call is done after work is completed. Lack of follow up is a huge concern with a number of end users with whom I speak, and I know that the majority of technical minded people have the mindset that the client will call if they have a problem. I agree sometimes they will, however many clients really appreciate a simple follow up phone call or even an email. Follow-up skills are something that all professionals can work on at all times.

When you master the skills needed to create a positive unforgettable end user experience you will see an immediate increase in your client satisfaction scores. Increase client satisfaction will also provide immediate benefits to your bottom line profits, more sales, happier clients, more new business and a great reputation in the industry. Remember your reputation doesn’t follow up, it precedes you.

Contributing blogger Stuart Crawford provides mentoring services to Microsoft Small Business Specialists across the world. His third book on Goal Setting is now released at http://www.goalsettingforitprofessionals.com. Join his free monthly IT Professional conference calls at http://www.freeitmarketingseminar.com.

Anecdotal evidence all around The VAR Guy suggests that the economy is going from bad to worse. A 30-year-old deli down the street from his Long Island hideaway just closed down; a local bar just shuttered; and now comes word that Starbucks is closing 600 US stores and cutting 12,000 full- and part-time positions.

The VAR Guy himself has gone cold turkey lately — he’s quit his daily Starbucks and Dunkin’ Donuts coffee habit, and saves money by sipping home brewed alternatives.

Kidding aside, The VAR Guy has spent considerable time chatting with local retailers on Long Island in recent weeks. At least two of them said they don’t think we’re heading for a “depression.” Huh? Depression? The VAR Guy was just getting used to recession talk.

So, what’s a savvy channel company to do? Hopefully, you’ve already tightened your belt at home. But keep investing in your business. Managed service providers (MSPs) continue to speak highly of their revenue prospects over on our sister site, MSPmentor. And events like CompTIA Breakaway (August 5-7, Orlando) should provide some tips for long-term revenue growth.

In the meantime, keep watching your local retailers for economic hints.

PartnerPedia — a new social network for solutions providers and VARs — is set to launch in July, though an official launch date is yet to be announced. The VAR Guy got a preview on June 26. Here’s his take on the social networking site, with a few hints on who it compares to OnForce, LinkedIn and other options.

It’s always difficult to predict the success (or failure) of a social network. Basically, the networks thrive (or implode) based on viral invites. If initial members are happy, they pull in more members. If initial members aren’t impressed, social networks rarely get a “second chance” to energize those members again.

The other big challenge: Generally speaking, only 5 percent of social network members actively participate in forums and discussions, and only one percent of members actually lead and drive those discussions, The VAR Guy has observed through his own experience.

Now that you know the risks, lets zero in on PartnerPedia. The user interface seems rich, and the network’s ability to link VARs with one another seems compelling. Another big plus: PartnerPedia is built on open source various open source components (Linux, Ruby on Rails and the MySQL database, just to name a few). As a result, PartnerPedia should be able to rapidly expand its features and functions through easy-to-install plugins.

Will PartnerPedia compete with OnForce — the IT services marketplace where VARs can outsource projects to one another? The VAR Guy doubts it. While OnForce is an eBay of sorts for VARs, PartnerPedia seems more like a LinkedIn approach.

Generally speaking, The VAR Guy likes PartnerPedia’s concept and approach. The site is expected to have a soft launch around July 7, with a more official launch penciled in for around July 22.

Maybe it’s time for The VAR Guy to put his Web site (and his LinkedIn Rolodex) up for sale. After all, the value of his house is plummeting faster than the fuel gage needle in his Hummer. And now there’s talk about a Web 2.0 Bubble. Say it ain’t so! (Then, take a minute to watch this video.)


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So, one of your long-established clients calls up and says she’s been told by another business partner that your prices are too high. She wants to meet soon to discuss the future of the relationship. Here’s how to regain your composure and prepare for the meeting to come.

Hey, It’s Good She Called! She could have just fired you and given her business to someone else. But instead she called and asked for a meeting. That means she acknowledges the investment you both have in the relationship and understands there is a cost to switching vendors.

Keep the Paper in the Briefcase: While it’s fine to have research and reports ready to go for the meeting, my advice is to keep your ammo off the table unless she asks specific questions that can be answered by your documentation. What she really wants is to talk and be listened to. Which leads to the next suggestion.

Ask Lots of Open-Ended Questions: Don’t ask, “Are you happy/unhappy with the service we’ve been providing?” A better question is, “Tell me how you feel about the service we’ve been providing. Where have we been the most on target with your needs? Where can we improve?”

Listen, and Listen Good: Really hear what your customer has to say. Rephrase and repeat back the most important points to make sure you heard it right.

Stop Caring So Much about the Outcome: You know what’s really unattractive? When you plead to keep someone’s business because they’re a really important customer. When you offer to do anything it takes. Reduce prices? No problem! Better payment terms? OK! Can I do your grocery shopping and wash your car, too? If you are less attached to the outcome of this one meeting and more secure in yourself, you are so much more attractive and more likely to have the result you want and deserve.

Focus on the Relationship: If you have been listening to your customer all along, if you have been true to your business values and those of your customer, if you focus on building the integrity of the relationship—you will keep the business. If you don’t keep it, something fundamental was out of alignment and you can learn from it.

Learn to Lose Gracefully and Come Back Another Day: When you go down swinging, learn how to be a graceful loser. Yeah, it’s okay to lose sometimes. In fact losing can be good for the soul. Just don’t tell my former employers I said that—not much tolerance in corporate America for people who tolerate losing! But you are an entrepreneur, so reality doesn’t bother you. We’ll keep this our little secret.

Contributing blogger Mitch York is a personal friend of The VAR Guy. York coaches executives who are evolving into entrepreneurs. Find York — and his personal blog — at www.e2ecoaching.com.

Conventional wisdom says profits and revenues are the two most important metrics for measuring your business success. I believe in a completely different metric, however.

Indeed, Complete Client Satisfaction is the only key performance indicator that is crucial to our success in business. When we are focused on taking care of our client’s best interest and ensure that we are delivering the most effective level of service, innovative solutions that bring value to our client base, billing them properly and timely only then will all the other stuff (profits, cash flow and anything else) will automatically fall into place.

When our teams focus on providing only the best quality support and the right technology solution that meet our client’s business needs, only then will our businesses begin to flourish and be on the road to complete success (also this is the one least travelled).

So why is client satisfaction so important? This is a very good question; when we achieve total client satisfaction we have happy clients who:

• enjoy transacting with us (great CSAT scores),
• pay their invoices on time (cash flow is healthy)
• easily refer business to our companies (healthy pipeline)
• continue to invest in solutions that our companies recommend (increased sales revenues).

Also, we will have employees that enjoying taking care of the clients that they are assigned. This will increase staff retention, creating a bond between our teams and our client base and we have a bunch of happy people who enjoy coming to work and transacting with our corporations.

Keeper of the Flame

Who is responsible for ensuring that our businesses can maintain a high level of client satisfaction? Ultimately, this is the responsibility of our Directors of Business Development, not our operations manager, not our service manager and not our staff.

Why is it important that your Business Development person take the charge in ensuring that client satisfaction remain high? In my experience this is the key person who maintains the relationship between our firms and our vendors, our companies and the local business market and when this key role is firing on all cylinders, our Business Development Director can bring together all components to ensure solutions are recommended to our clients, concerns from our clients can be escalated to our vendor partners openly and rapidly and our overall business goals are met across the board.

In business today, it is important that everyone on our teams understand the goals, mission, vision and values of our company and the effect that having this key information has with our overall client satisfaction.

When we have our team aligned with our business goals that client satisfaction is important, our employees and staff are now empowered to make key decisions at our client’s office, in our client meetings, with every interaction they are now focused on ensuring that the client is completely satisfied with the dealings that they are having with our businesses. It is very important to our business success to empower the teams we have in place to make critical business decisions that is aligned with our business goals, mission, vision and values.

We must also always deliver what our clients are asking for, this is another critical area to ensuring that our clients are satisfied, take steps to understand what they need and what they are looking for. There are many great tools available today to assist in the information gathering, however, no tool that is available (surveys, newsletters or other technology) compares to face-to face-interaction. It is important to maintain a balance of face to face interaction with other communication methods. We must get up from behind our desks and visit the people we are taking care of.

Client satisfaction is the golden egg to success, especially today during the uncertain economic times we live in today; don’t worry about the price of gas or the investment in time. When we take of our clients they will ensure that they take care of us. When we have our businesses focused on ensuring that we are creating a positive experience with every client interaction we are definitely on the road to success. Here is my formula to success in small business IT consulting:

High CSAT = Profit and Revenue
Low CSAT = Broke
Contributing blogger Stuart Crawford provides mentoring services to Microsoft Small Business Specialists across the world. His third book on Goal Setting is now released at http://www.goalsettingforitprofessionals.com. Join his free monthly IT Professional conference calls at http://www.freeitmarketingseminar.com.

We’re heading into a holiday weekend. Wonderful. It’s always nice to unplug a bit. But be careful: Technology companies are notorious for announcing bad news late on Friday or even on Saturday during a holiday weekend. Also, three-day weekends are a great time for companies to hammer out big partnerships or acquisitions in quiet solitude. If Yahoo and Microsoft are going to break bread, The VAR Guy believes it will happen this weekend.

First, watch for alarms: Tech companies often hope bad news will get softened and stretched out over the holiday. By the time everyone plugs back in Tuesday morning, so the theory goes, the bad news won’t feel quite so bad. The old Computer Associates used to leverage holiday weekends frequently for bad earnings announcements. (Thankfully, the new CA is far more transparent.)

Meanwhile, holiday weekends are a great time for high-profile CEOs, boards, financial advisors and lawyers to huddle up without many people noticing. Microsoft and Yahoo, for instance, seem interested in talking again. A Friday night dinner date that stretches into a weekend romance could be in order.

The VAR Guy will be watching…

Avnet Technology Solutions (ATS) is turning to an old pro to generate new growth at the organization, naming Jeff Bawol as president. It’s an intriguing move. Here’s why.

Unlike some classic distributors, ATS has successfully diversified into integrated hardware and software solutions — especially around HP, IBM and Sun offerings.

However, the economy and other factors may be hindering ATS’s growth. ATS’s parent, Avnet, announced weak financial results in April, blaming some of the problems on weak server sales.

Following those weak results, The VAR Guy wondered if growing interest in virtualization software slowed Avnet’s hardware sales. And he has also speculated whether the latest Windows Server upgrade has caused businesses to slow their server deployments as they evaluate the new operating system.

Regardless, Avnet needs to push ATS forward. That’s where Bawol enters the picture. Avnet tapped Bawol, a long-time company veteran, in 2003 to launch and grow ATS’s Enterprise Software and Storage (ESS) group. Smart move. Avnet says the group has grown an average of 42 percent annually over the past three years.

That type of growth rate won’t be possible in ATS, since the organization generates a hefty $6 billion in annual sales within the broader Avnet (which generates nearly $16 billion in annual sales).

But having a growth-focused executive — who also is an Avnet veteran — could help to energize ATS.

The VAR Guy hopes to catch up with Bawol in the days ahead for his perspective.

One of my coaching clients is a wholesaler for a mutual fund company. Even though she works for a big company, she is really an entrepreneur, running the show in her territory. Needless to say, in today’s market climate, her business has never been more challenging. Some of the lessons from her business certainly apply to the high-tech entrepreneurs.

A key problem is an inherent conflict in the nature of her business: financial wholesalers tend to be transaction-driven (working hard so that their clients will ‘drop a ticket’–and hopefully a very big ticket, resulting in a commission); while the financial advisers (FAs) they call on are relationship-driven. FAs used to be brokers and were compensated on transactions, too, but that’s less and less the case. Nowadays, they are more likely to be paid on a fee-basis, collecting a percentage of an investor’s assets under management.

Last week my client drove six hours to make a 10-minute sales presentation. Obviously it was a critical meeting and we are waiting for the sweet sound of a big ol’ ticket dropping, which I am sure it will. But she definitely is overwhelmed with having to keep up with an opportunistic market. Our conversation turned to a couple of things:

To rise above opportunism with clients and customers, see the bigger picture–theirs and yours. When my client stepped back to reflect on how she wants her clients to view her, she envisions herself as a trusted advisor and true business partner. That’s her brand statement.

I asked her, Why is it so important on a day-to-day basis for you to think about how your brand is expressed and simultaneously how that fits into your long-range goals? Her answer was: So that I can have a business within five years that is 100% referral-based, where I will never make a cold call on someone I haven’t been introduced to through a strong connection.

That is every salesperson’s ideal state, and it is totally achievable.

Stepping back to see beyond the tree line is critical. You have to really know your motivation for what you are doing in business day-to-day. And you need to remind yourself, daily, why you are doing what you are doing. Come up with a phrase, a mantra of sorts, that you tell yourself every day. Something meaningful that drives your behavior and outlook. Tell it to yourself at the same time each day. Write it down and tack it on your bulletin board or the dashboard of your car. When you think about your vision, don’t judge yourself on whether you executed it well today or wasted your time. If you reminded yourself of your vision, yesterday and today, and again tomorrow, you are moving closer to it.

Contributing blogger Mitch York is a personal friend of The VAR Guy. York coaches executives who are evolving into entrepreneurs. Find York — and his personal blog — at www.e2ecoaching.com.