How To Add Value While Selling Software

The traditional reseller is in transition. The buzz in the software

reseller community today is "How do we add value". All of us

associated with the industry know that shrinking margins on the box have made it

imperative for us to offer services.

The only way one could have a competitive advantage is by

selling services with the box. Services is the key differentiator between

a VAR and a box reseller. The services business has brought about greater

productivity and efficiency, which means cost saving and healthier bottom lines.

The more successful resellers have nurtured key accounts,

limiting their business volume on the short term but gaining huge customer mind

share through services. One must remember though that products are still the key

to account control and therefore resellers have to balance their focus on both.

Adding value to box sales

Every software reseller must understand what his organization

is capable of delivering, among a large number of options when it comes to

adding value to his box sales. Being an expert in all areas and assuming the

role of a "technology expert" is good for sales, but will make value

addition unsustainable. There is no way a value-added reseller (VAR) can manage

to provide services for all the current leading technology areas. He will have

to pick and choose his area of strength.

The VAR has the following options:

a) Do a need analysis for customers and play the role of a

technology adviser.

b) Provide product comparisons to facilitate decision making

for the customer.

c) Charge for support. Many organizations are willing to

separate the cost of the product from cost of support. A support contract could

involve placing an employee at the customer’s site for a fixed number of hours

a week. Alternatively the VAR could charge on a per-call basis.

d) Training is a lucrative value-add and many organizations

would prefer the VAR providing it, except that finding and retaining a team with

high level certified technical skills is a difficult task.

e) Network administration and management at customer site. A

lot of exciting networking products are available and the lack of skilled

manpower at the customer’s end would give the VAR a great opportunity.

f) Outsourcing as a concept is gaining ground again. Large corporate entities

want to outsource repetitive work leaving only critical work to their own staff.

Remote diagnostics

and call center services are some examples of outsourcing.

g) Software maintenance and application management.

Newer trends

It would be a good idea also to reflect on new trends, which

are emerging worldwide. A trend fueled by the Internet and e-business culture is

sure to affect all of us in the near future. The New Age VAR needs to sell

solutions and specialize in service areas. The traditional VAR is now in

transition with new business models like:

• Application Service Provider
• E-business Solution Provider, etc.

What this means is that there will be a shift towards

consulting and e-business as a core component of the VAR’s services business.

A new VAR could be wise to look seriously at the following service options:

a) Consulting services where the VAR conducts systems studies

based on customer’s future plans and recommends an e-business strategy

covering hardware, software, networking and applications.

b) E-business and web-enabling technologies where the VAR

develops and implements e-business solutions and also coverts existing

applications to a web-enabled environment.

c) Networking services by studying network topology at site,

providing network design and implement networking and security solutions.

d) Software application development services

Developing skills in the Web and networking technology like

remote access, security, high speed Internet access, Groupware, SQL databases,

etc will be the key to survival in this cut-throat market. The need here is to

specialize in specific areas and look at partnering with other technology firms

to cover gaps in skills. Selling products with Internet and e-Business services

attached is likely to be the biggest revenue earner in the coming years.

Managing transition

A VAR can handle this transition by paying close attention to

the following points:

• Internal training to adapt to specific technology areas,
  
  and develop internal systems to measure customer satisfaction.
• The VAR should introduce support services in a Web-enabled
  
  manner, by providing text chat support and allow customers to log in to their
  
  knowledge base.
• Focus on a specialized area and partner with other VAR’s to provide
  
  complete solutions.