For the best part of the last quarter, I was ’on the road’ meeting with channel companies across the country.  I learned a lot about today’s channel business from system builders and integrators in the channel.  I learned that things don't look as bad as they did a year ago, but we can't say things look good.  We haven’t lost any customers really; they’re just not buying as much.  We need new sales to replace that revenue.  We need new sales to grow.

Big companies increase their marketing and advertising budgets in an effort to increase sales.  Channel companies don't have marketing budgets and advertising is usually limited to giveaways for our customers.  Simply put, channel companies have to actually see more [people] to sell more.  We have to see prospects and make a connection as small businesses.  It is something unique that we have in common with the small business marketplace, and the MNCs will forever envy our customer

System builders here and abroad are increasingly aware of the uncertain future of the Channel.  It all started a couple years ago at the Intel Solutions Summit when Paul Ottelini, President and CEO of Intel, shared his vision for Tomorrow.  His vision is of a world in the not-too-distant future where there exists a “billion connected devices”.  Hundreds of millions of different, discrete miniature systems connecting and communicating; consumer electronics, embedded devices, handhelds and netbooks.  And it’s scary how fast the vision has become an impending reality.

The vision creates uncertainty for today’s channel companies because only a fraction of those billion devices can actually be built by the Channel.  In my vision of the future, the Channel will probably be building infrastructure for ‘the cloud’ in the form of servers and storage.  Infrastructure projects benefit from vertical expertise, custom designs, and rapid service response; these are all hallmarks of a channel company, so we

Good companies build good sales teams.  Great companies craft a sales culture.

Culture is commonly defined as “a set of shared attitudes, values, goals, and practices that characterize an institution, organization or group”.  I like to say that it is all the written and unwritten rules about how things get done in a company.  Every society has its culture - as does every business.  We should be mindful of our culture because it dictates behavior (and there are behaviors we desire over others).

Culture dictates social behavior.  I’m from Texas and culture dictates our distinctively Southern manners.  We say “Yes, ma’am” and “No, sir”, we open doors for women and carry guns in our trucks.  There are no written rules to prompt this behavior, but unwritten rules move us to act in a way that characterizes the South.  The same thing can be said for almost any country or continent in the world.

In 1844, a group of 28 artisans working in the cotton mills in Rochdale established the Rochdale Equitable Pioneers Society.  These poorly paid weavers could not afford the high prices of food and household goods, so they agreed to pool their resources and buy the things they needed at a lower price.  The principles that brought success to the Pioneers Society serve as the foundation upon which all modern co-operatives operate.

If you read the blogs I post on this site, you probably know that several dozen system builders have recently agreed to work together.  Our Channel network is like a co-operative and a trade association combined; a trade association to advertise and promote our industry brand and a co-operative to better negotiate for goods.  Our loosely affiliated group of like-minded entrepreneurs is already engaged in “Channel business” and has made measurable progress, negotiating a Volume Purchasing Agreement and Channel Discounting plans.

Channel leadership fights the 'good fight' on behalf of their peers.

Intel's Board of Advisors is a team of 15 successful Channel executives who commit their time and attention to working with Intel to create better products, services and programs for the Channel.  They are largely responsible for the creation and growth of a Channel network where independent Channel companies collaborate to improve their ability to compete in this changing marketplace.  Among other accomplishments (not the least of which is convincing Channel entrepreneurs to work together), they have successfully negotiated Volume Purchasing Agreements with select distributors and are currently engaged in raising [Channel] brand awareness in the buying public.

(This video provides insight into the Intel Board of Advisors and the independent Channel network.)

October 11, 2009

Channel Speak: EPEAT for the Channel

I just got back from Intel's Channel Alliance Summit.  The event is designed to gather companies from the vendor community to communicate (and perhaps collaborate) on subjects relating to the Channel.  Of the topics presented, I found the sessions on "Eco-smart" and EPEAT most interesting.  Environmental compliance is a big deal with the people who buy our products now and in the future, and it is encouraging to know that vendors are working on the Channel's behalf.

The impact of the trend toward 'green' became serious when we first learned of EPEAT last year.  This compliance criteria became boilerplate for a surprisingly large number of government and education organizations.  When IT stimulus money was released,  22 government agencies were among the first to roll out RFPs for hundreds of millions of dollars of work.  To the Channel's dismay, every tender issued by these agencies

September 2, 2009

Channel Speak: The Extra Mile

(Part 3 of a three-part series titled Sales Savvy for the IT Channel)

In the last blog, we talked about prospecting as an essential and often neglected part of the sales process.  We talked about how the old prospector’s advice was relevant to today’s businessman; we have to move a lot of material if we’re going to find any gold.  And salesmen should be prepared to go through a lot of prospects to find some customers, too.  Finally, we discussed the fact that prospecting is hard work, and that nobody likes hard work.  But the secret to success in prospecting (and in sales) is making a habit of doing the things that no one likes to do.

Some sales trainers call this "entering the Discomfort Zone" and others call it "walking the Extra Mile".  So what do the old sales maxims do to help channel companies run a better business?

August 19, 2009

Channel Speak: Prospecting for Riches

(Part 2 of a three-part series titled Sales Savvy for the IT Channel)

No prospecting, no sales.  No sales, no riches.  It is as simple as that...

Prospecting is the most difficult component of the sales effort.  Another term for "prospecting" is Lead Generation.  You can Google "lead generation" and you will find page after page of prospecting techniques.  They are the same techniques that salesmen have used for decades, and (the bad news is) there is no "Magic Bullet".  Prospecting techniques include:

• Newspaper or magazine advertisements.
• Local business associations.
• Public records.
• Canvassing.
• Trade shows.
• Direct marketing.
• Internet marketing.

I don't pretend to know which of these techniques is best for your business, but I do know the secret to success in Prospecting, and I will share it with you now...

The secret to success to Prospecting (and most every worthwhile endeavor) is

August 3, 2009

Channel Speak: Sell to Survive

Businesses without sales fail.
We must sell in order to survive.

* * * * *

We probably wouldn’t take time to read this stuff if sales were up.  But sales are down and we need a sales refresher.  It is time to revisit the basics; the blocking and tackling of Sales.

We can blame our numbers on the fact that our customers are buying less; and it’s true.

• Revenue from Microsoft’s OEM Channel decreased 31% is reported.
• IDC forecasting 22.1% decline in server revenue year-over-year.
• Storage spending is down over 18.6% year-over-year.

Unfortunately, those truths don’t change the fact that we have to make more money than we are making right now.  And since our customers seem to be spending less, we need to find more customers.  It is literally as simple as that.  We have to sell more.

July 15, 2009

Channel Speak: The Dream of Owning a Small Business

On Independence Day, I started thinking about Independence and Immigration at the same time and, two weeks later, I am still thinking of all those people that came here seeking freedom.  The thing that sticks with me is how many of those immigrants started small businesses with a junk cart, cobbler's box, or a bushel of apples; they shined shoes for a penny.  They understood the value of service and treated customers with care.  They did whatever they had to do to provide for their families and, in some cases, for their neighborhoods.  That work ethic and unshakable commitment to success is still alive today, just when small business needs it.

The small businessman in America is privileged to provide for his family and employees.  The taxes on his company’s profits are used for social services and to fund community projects.

June 30, 2009

Channel Speak: Our Role in the IT Industry

There is a lot going on in the Channel right now.  We've been trying to organize this group of successful entrepreneurs for a couple of years and only in the last three months have we observed a genuine effort to collaborate.  It's well worth the wait; I believe we're the next great example of small business surviving and thriving in difficult times.

The idea of individuals coming together for the benefit of their community is nothing new.  In ancient times, the Babylonians practiced cooperative farming.  Thousands of years ago, the Chinese developed a cooperative ‘savings and loan'.  In 1997, a USDA survey reported that 3,791 farmer cooperatives generated a net business volume of $106 billion, equal to their record high set in 1996.  And that is an astounding statistic when you consider the plight of the farmers in the 1970s.

June 11, 2009

Channel Speak: Initiating Conversation

Let’s start a dialog…be sure to add your feedback at the end of this blog!

I stood in the doorway of a Dallas salsa club feeling out-of-place and awkward.  I was a bow-legged boy from Fort Worth, Texas and the nightlife in Big D seemed surreal to me.  Through fake fog and flashing lights, a salsa firecracker caught my eye, her red curls jumping like a frog in a hot skillet.  I was determined to speak to her, in spite of the risk involved with initiating conversation.  So I hitched up my britches and put on a Friday night grin, sauntered on over and said “How do you do?”  I cannot say that I swept the girl off her feet, but I didn’t have to drag her to the dance floor.  We’re still together and ‘breaking the ice’ with her remains one of the smartest things I

 

June 1, 2009

Channel Speak: a.k.a. the Channel

In the IT industry vendor community, everyone talks about ‘the Channel'.  We are valued for our reach and scale, our reliable feedback on new products, and our unique ‘touch' with our customers.  But it is very difficult to adequately describe the Channel, and the buying public doesn't even know it exists.

To some extent the Channel is defined by the vendor community.  Hardware vendors channel products through system builders and integrators, and software vendors tend to partner with VARs and solution providers.  Most of the time, a company's size is a qualifier for our club; the multi-nationals (Dell, HP, IBM, etc) channel product from the manufacturers to end-users, but no one I know considers these giants peers of the Channel.  Large companies are not as nimble or agile as small companies; part of our value to the vendor community is our responsiveness and vertical expertise, which are inevitably lost at some high point on the revenue curve.

May 28, 2009

Channel Speak: Gadgets in the Classroom

Education is a hot topic nowadays because it is an industry targeted in the Economic Stimulus package.  This week, I read an article that offered an updated view of business in the Education marketplace.  It is interesting to watch the evolution of the digital classroom, and the importance placed on technology in the world of K-12.  As a Channel company, however, I was surprised to see how little opportunity actually exists in this vertical for the system builder.  This year, hot technology for education includes Kindles, netbooks, whiteboards, surveillance cameras and digital signage.  This represents opportunity for installation and integration, but it seems the traditional white box is on its way out the proverbial door.

Traditionally, K-12 accounted for a substantial percentage of business done by the Channel.  When I first joined Intel's Board of Advisors, I learned that K-12 issues were a big part of our meetings because K-12 was a big part of the Channel

May 23, 2009

Channel Speak: The Discomfort Zone

When times are tough, everyone who hopes to survive needs to hunt a little harder.  But it has been awhile since we worked the street; it is easy to forget the fundamentals of sales success.  It’s our habit to stay in our Comfort Zone, and nothing could be less productive.

When I got out of the Marine Corps, I met a man who built the foundation for my sales career.  He was committed to two things: Persistence and the Law of Large Numbers.  There is no need to explain Persistence; socially awkward, stuttering coneheads have made millions of dollars selling their products because of their dogged persistence.  The Law of Large Numbers is the theory that a ratio can be established between the number of sales calls one makes and the number of sales that are generated.  This means you can make all the money you want if you are willing to make the calls.

May 14, 2009

Channel Speak: 3 Margin Makers

This week at Intel's investors meeting, CEO Paul Otellini said that the demand for processors is rebounding faster than anticipated.

"Even though corporations are not buying PCs right now, enterprises are buying servers, even in the depths of this recession," he said.  They are buying storage, too.  And, with lower IT budgets, they're looking outside to purchase professional services to manage their growing infrastructures.  The Channel is always looking for margin, and there are margin opportunities in each of the disciplines that seem to be selling right now.

1.    Servers: when it gets down to it, servers really aren't much different than desktops.  Servers feature some redundancy, of course; companies run their businesses on them.  Add an extra power supply and a hot-swap disk drive, upgrade the operating system and you got yourself a server.  The real difference between PCs and servers is the implied liability.

May 11, 2009

Channel Speak: 3 Tools for Selling Small

Some say that the biggest problem faced by system builders and integrators is the inevitable confrontation with the Big Boys.  And I would agree. More often than not, the MNCs will sell equipment for less than it costs us to build it.  Their parts purchases are so enormous and ours are so small that we cannot hope for price parity from the vendors.  Since we cannot compete on price with these behemoths, we must learn to fight them where they are weak.

My friend Gloomy will tell you they got no weaknesses.  That Dell and HP, and Lenovo and all those folks in Taiwan are gonna pound us like sand. Gloomy believes we'll be wearing anti-stat straps that say Made in America working third shift assembly in that building where the Smithsonian used to be.  Of course, that's probably why we call him Gloomy; some folks see the doughnut, Gloomy see the hole.

May 07, 2009

Channel Speak: EPEAT Two

This EPEAT thing is getting ugly.  I first learned about EPEAT during a Board of Advisors meeting last September.  It caught most of us by surprise; we had never heard of the organization or its mission.  There was no warning and very little time to prepare for the sizable impact it will have on our businesses.

As you know, EPEAT is the new "green" standard for government purchasing.  As of January 2009, EPEAT-certified products are required purchases for all agencies of the federal government.  Over half of the agencies have already made the switch to EPEAT-certified products.  Without being overly dramatic, the numbers are staggering.  Hundreds of thousands of computers are being purchased by the Department of Labor, the Department of Veteran Affairs, and the Social Security Administration and a painfully large percentage of them have been supplied by the MNCs.  It's public knowledge; I'm not saying anything here that you can't read online.

 

May 05, 2009

Channel Speak: Chocolate Royale

I learned something new about value-add selling this weekend, and it came from an entirely unexpected source.  I spend most of my work week evangelizing a value-add approach to my Channel brethren and am always encouraged when I see it in practice.  The ability of an individual or company to sell value beyond the tangible product is reflected in that individual's or company's bottom line.  And since we never know which metaphor will best illustrate the idea for our audience, we must know value-add well enough to identify an example when it presents itself.  I recognized value-add selling in our neighborhood this weekend and it gave me hope for our future.

My youngest son is a role model for the younger kids in our neighborhood.  He studies hard and plays football, and is always kind to the little guys on the block.  Apparently, he was planning to instruct them on the merits of entrepreneurship this weekend.

April 30, 2009

Channel-Speak: Pay Them to Prospect

I could scarcely wait to get back this week to tell you what I learned.  I met some people who run a hardware company that – in these ridiculously difficult times - are experiencing dramatic growth.  And the really cool part of the operation is this: they get things done the old-fashioned way.  They look for business prospects, ask them about their businesses and the things that pain them, and try to identify a problem they can solve.  Really – that’s how they do it.  The fundamental truth that has become this company's mantra is "you've got to meet more people to sell more stuff".  One of their most successful salesmen told me that the company doesn't pay salespeople to sell things; they pay them to prospect for customers.  Judging by their numbers, paying to prospect seems to work very well.