Changing habits

Middle East resellers committed to scaling up their services proposition will know it is a task that presents more than its fair share of obstacles.

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By  Andrew Seymour Published  July 15, 2007

Middle East resellers committed to scaling up their services proposition will know it is a task that presents more than its fair share of obstacles. And they don't come much bigger than the pain involved in re-educating and organising a sales force accustomed to a very different way of selling.

The current issue of Channel Middle East contains interviews with several resellers from around the region who have succeeded in developing a business that generates more than 25% of sales from services-related activities. Each one will tell you that getting the right personnel on board and making them buy into the whole ‘solutions' concept is one of the most challenging tasks they have faced.

With annual training costing more than US$40,000 per staff member, according to some dealers, the development of a services-heavy model is a project that has far more than just credibility at stake.

The problem confronting many resellers is that their sales teams are so comfortable with the tried and tested methods they use to address customers that they struggle - or simply don't have the capacity - to adapt to a services-led approach.

The Middle East is historically a market where reseller efforts have largely gone into moving products and worrying about little more than convincing the customer to purchase the highest volume possible. I'm not saying there is anything wrong with that model. Thousands of resellers have made a very successful and profitable business from it and, just as significantly, have been guided in this direction by vendors and their own direct touch sales divisions.

However, resellers who no longer desire a business based purely on price and availability must ensure their sales teams are able to get to grips with how a piece of technology fits into an overall solution and how best to pitch it to a customer.

Middle East resellers familiar with events in the US or European reseller landscapes, where corporate resellers have gone through tremendous grief trying to develop services-based models and left the down-and-dirty box shifting to B-to-B traders and mail order firms, will know they cannot expect an overnight transformation. But, at the same time, it is the only way forward. They say a leopard can't change its spots, but that doesn't ring true for IT resellers hunting more substantial margins.

Altering the mentality of a sales force raised on moving boxes is a big challenge, which always carries the risk that staff will quickly revert to their former ways as soon as the pressure to hit targets becomes too much to bear. During this stage, staff resistance will invariably be at its highest, which is why it is vital for resellers to ensure the overall structure of the organisation is geared up to reflect the shift in approach. If the broader corporate framework and systems are absent then sales staff unwilling to change will argue that they are not receiving the support they require.

It is during this reorganisation stage that resellers must identify the sales personnel that possess the attributes to not only assume a solution-focused sales role, but to be able to lead a team. Those without the necessary credentials will need to be placed elsewhere in the organisation or remain in a product focused role. This exercise - which will only prove fruitful if it is backed up by regular, intensive sales training - is one of the most critical aspects of shaping a sustainable services strategy.

The fundamental difference between product and services or solutions selling is that the latter principally commands a group approach that requires more interaction between members of the sales team. Instead of it being about marketing a product and dispatching an invoice, the emphasis shifts to an advisory, design and delivery role based around understanding customer needs.

The level of teamwork exacted often comes as a surprise to personnel within organisations going through the product to services transition. In a solutions environment, the sales person is much more reliant on the rest of the company to facilitate the sale and nurture the customer relationship. Again, the importance of a clear company structure that encourages sales staff to buy into the new approach cannot be underestimated.

Adopting a services-driven philosophy naturally takes the reseller into the consultancy space as opposed to just quoting a price and a part number. That also changes the ball game internally as many dealers structure their organisation around technology vendors, whereas a solutions organisation necessitates a blended approach.

What's more, any resellers on this path must ensure they refine the incentive schemes they have in place for sales personnel. Product-focused sales staff might be paid on sales-out and account management, but in a solutions world that system simply won't stand up. Instead, the reward structure has to reflect the longer sales cycles and the degree of consultancy involved, as well as encourage transactions containing more profitable hardware or services.

Resellers in the Middle East will be forced to make some bold decisions as their business evolves, none more so than the dexterity with which they go about transforming their current crop of product pushers into seasoned solution superstars.

4356 days ago

Andrew Seymour's article is really thought-provoking. All aspects of the topic have been comprehensively covered. An example of a paradigm shift to solutions-based approach is the zero percent commission on airline sales. Service providers are sort of compelled to reinvent themselves, raising the need for a properly trained, committed and skilled services team. But with the 'service staff drain' that we see in mature markets (experienced staff returning to greener pastures), Middle East markets may find it a challenging task to reposition themselves.

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