Robert G. Parsons first realized he needed some guidance on where his business was headed when he began hiring young sales representatives a few months ago to push the products and services of his company, Automated Office Solutions, a VAR in Evansville, Ohio.
The firm had seen a dip in profitability proportional to the dip in margin from its core products. Profit is found when services and education can be attached, but Automated Office Solutions was struggling to identify the right products and services and how best to market them.
"These guys were coming to me saying 'what do you want me to sell and who do you want me to sell it to?'" Parsons, president of Automated Office Solutions, said of the new class of salesmen.
"I said 'sell everything to everybody, that's the way we've done it for 20 years.' But the market doesn't work like that anymore. These guys need to specialize in a few products or a few services that the business can build on. So we're trying to decide on the areas, products and services we're going to focus on."
Parsons, along with about 30 other VARs, are using the beta of CompTIA's Reseller Transformation Roadmap, a program to first help resellers assess what areas of their business are profitable or unprofitable and what areas are ignored or overindulged, then to help VARs develop business practices that move them to the more profitable areas.
The Roadmap has an overarching theme of moving VARs from reselling products to providing more of the services and the value-add they bank on.
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"[The Roadmap] targets the middle 30 to 40 percent of the channel that recognizes they're leaving something on the table, but not sure where they need to be going to take it," said William Vanderbilt, CompTIA's vice president of education and training.
"It might be as simple as changing their commission structure, engaging salespeople in a class on customer service support or attacking a vertical market, new products, a different relationship with vendors. Things they might not otherwise realize they need to be doing."
For Automated Office Solutions, which has completed the assessment portion and is about to embark on the Roadmap, the process is about awareness.
"I am hoping it will show us the profitable parts of the business I know we touch on, but don't promote," Parsons said.
"You thought you were making good money selling [Hewlett-Packard hardware], but you're not, or you thought selling this HP was a loser, but look at the services it brings in."
Parsons said the company has also explored limiting it vendors, a decision it is hoping the Roadmap will help to bolster.
"We're challenged trying to learn every vendor and every technology," he said. "But if I have 10 customers who are on Trend Micro [Antivirus], 10 on Symantec and 10 on another AV product, will I lose 20 of them by switching to one? Or is there a way to make the right decision and deliver the message correctly to my customers?"
The biggest lesson, CompTIA is trying to drive to VARs is to move toward services and away from product, said John Venator, CompTIA's president.
For a long time, VARs have included implementation, setup, end-user training and other services as part of deals just to make the sale. But as hardware and software margins continue to erode or disappear to other sources, the channel needs to consider putting more value in these extras and charging customers.
Venator said that there are plenty of valuable things VARs give away just to get the business, and that clients are perfectly willing to pay for.
"Some resellers have figured this out and they can go so far as to send customers elsewhere to buy the hardware or use distributors as a drop-ship and 'then let me service it,' Venator said.
Parsons is considering that option already.
"Would I be better off telling my customers to go get it from Dell and I'll take the services from there?" he asked. "I don't know that we will get to the point where we're just a service provider, but where at the point where we're asking 'would we be?'"
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