Who drives sales, customers or vendors?

Suppose a customer comes to you-they want a piece of hardware or software, they have a set of requirements, but they have already made up their mind-they want Brand A.

  • E-Mail
By  Mark Sutton Published  July 12, 2003

Suppose a customer comes to you-they want a piece of hardware or software, they have a set of requirements, but they have already made up their mind-they want Brand A.

Maybe they have seen some marketing campaign, maybe a persuasive rep from the vendor has told them they need Brand A, maybe they've always bought Brand A, but regardless, they want Brand A.

OK, so suppose you stock Brand A-all well and good. But what if you also stock Brand B? (Assuming that the vendor's of Brands A and B don't mind you being an authorised seller of both, rather than deciding that if you want to sell Brand A, then Brand B is going to curse you, your business, your ancestors and so on, and probably vice versa as well). Let's assume that Brand B is identical to Brand A.

You have performance benchmarks to that show them neck-and-neck, with no crucial differentiators between them, but maybe B is slightly cheaper. What do you do? Do you try and educate your customer on the benefits of Brand B, explaining that it will be cheaper for them? Or let them stick with Brand A?

Selecting the right product for the customer is what the channel, to a greater extent than most sales businesses, is about. Customers speak to their resellers, and resellers to their distributors and their vendors, to match the product to the customer's needs. The sale is not made purely on aesthetics or perceptions, like selling a car or a fridge, but more like a clinic or hospital deciding on which drugs to use-the customers rely on getting the absolute best tools for the job within their budget.

Many of the different elements of IT today are commoditised. While the leading hard drive manufacturers would not admit it, their drives are fundamentally the same. When it comes to processors there are benchmarks for every possible use of Intel and AMD's chips, showing that there is usually not much to choose between chips. Even for networking kit, one switch is much like another.

This is why the role of the resellers is important. The customers trusts the reseller to know about the non-technical differences, things like RMA and support, everything that makes the difference between a straight apples for apples comparison and choosing what really fits the customers needs the best.

So you tell the customer all about Brand B, they choose Brand A anyway, because, after all, no one ever got fired for buying Brand A-at the end of the day the customer pays their money, and takes their choice, and the reseller is there as a trusted advisor as much as a salesman.

But where this system breaks own is when the reseller isn't looking to the customer's needs, but rather to their own interests. While the difference on margins may account for a lot-Brand A might be the market leader, but that might also mean that margins are squeezed-it is important that trust between customer and reseller is not compromised by this. If margins on very similar products are that much better from one brand to the next, then why sell the products of the vendor that doesn't give you a good return?

More importantly, when it comes to keeping an honest relationship with the customer, resellers must be wary of incentive schemes. Incentives can be great for driving sales, but the need to hit a sales target, to close one more deal or to shift another 1,000 units shouldn't get in the way of giving the customer a fair deal.

There are many, many different schemes to drive incentives, and the different ways they work tell you a lot about how companies regard their business. But no matter what is on offer, it is always important that the drive to meet incentive scheme targets doesn't compromise an honest relationship with customers.

There is an old adage about not trusting salesmen that have expensive cars-if they can afford an expensive car, they are making too much profit out of you. Worse still is the salesman driving an expensive car they have earned through an incentive scheme, when the customer is sitting on top of a lot of useless kit that has been palmed off on them to help the sales man meet his incentive target.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code