VAR new business quoting operation: profits, competition, and growth
The IT channel is going through massive digital transformation. Some companies are behind the latest developments in tools and skills. With this change come challenges and opportunities. As an opportunity, you can implement new growth strategies that update your tools and skills. Sales tools are a critical component in today’s changes. In VAR sales, quoting and maintenance tools are behind the times. The three trends which are causing today’s shift:
- A sudden change from in-person to virtual meetings (fewer regional preferences are replaced by national or even global resellers)
- Small VAR companies’ acquisition is faster as large VARS grow (continuing consolidation in the channel)
- Steady rising use of cloud-based IT (less need for on-premises data centers more networking)
Fast, professional, accurate, competitive quotes are one differentiator that helps keep and win customers. Granted, quoting is not viewed as a strategic business advantage, but today it’s becoming a critical business tool. We have seen small VARs quickly upgrade their quoting capability with new tools to see results. We have also seen large quoting operations in a regional telecom operator quickly move from their in-house system to quote hundreds of projects monthly. Better tools and skilled staff can differentiate new business growth. Here is a look at each new business factor:
Professional, knowledgeable, skilled staff
Sales staff capability is the most critical factor in convincing new customers to buy. Skills related to products, prices, and sourcing take time to master. Skills related to tools and work tasks are learned quickly. When management provides good tools and time to learn how to build a proposal, new customer wins becomes a matter of lead generation and proposal operation.
New customers look at the quoting process both in terms of quality (the final quote) and the interaction with sales (speed, knowledge, flexibility). Skills in pricing reflect the experience of each individual with good resources. Here is where top organizations tend to be better than the average ones.
More product vendors and tight vendor integration
Sales staff capability is not simply knowing and producing the best solution. It also comes down to translating the technical solution to the customer’s requirements. Most customers are not going to understand all the details, giving them as clear and simple explanation is as critical as giving them the best solution. Delivering a competitive solution comes down to good structure (hierarchy of the project), detailed information on each item (additional pricing and product details), and even alternative sources (distributor price and availability).
One challenge in creating quick proposals when there are many sources is integrating them into one quote. Simply cutting-and-pasting from ten Excel spreadsheets into one quote is a tedious task. When we add additional meta-data to each item, and the data format is different from each source, the work can multiply in complexity. Not only what the customer sees is critical for a well-structured proposal.
Managing more than price and delivery
Pricing and delivery strategies are critical in making winning business decisions. Can you quickly see vendor incentives (for Cisco the VIP values) while deciding margins? Can you quickly compare distributor pricing and deliveries? Can you quickly update a quote when a customer needs a better delivery while trading for a higher margin? Does your sales management see prices and changes on-the-fly while they are calculated? Can you review margins quickly if there is a change? Are you able to tradeoff service cost (design, installation, maintenance) with product margins?
Pricing and delivery tradeoffs are critical in winning new customers. They can also determine your profitability and lower proposal risk. When you take all these factors into account, quoting becomes a new business strategy. Tools and training designed specifically for the VAR business is as critical to your success as anything else.