Multi-Vendor Solution Selling
Capitalizing on opportunities with a solutions distributor
Channel Management Insights speaks with Tim FitzGerald, vice president, technology solutions practices leader at Avnet Technology Solutions, Americas
Indirect technology sales channels were founded on the basis of reselling hardware to small and midsize markets. Over the years, hardware margins have steadily declined. As a result, value added resellers (VARs) are making a greater percentage of their profits from sales that include holistic solutions and services.
Multi-vendor solutions — representing hardware, software and services components that address specific customer and industry needs — now drive the market. However, as information technology advances, these solutions become more complex and specialized, including the unique challenges of bringing them to market.
While solutions can be created at any level of the supply chain, solutions distributors such as Avnet Technology Solutions are in a perfect position to help VARs design effective go-to-market strategies. Consider that a distributor, like Avnet, has relationships with a broad range of industry-leading suppliers plus a strong community of resellers to ensure effective execution. In this solutions distribution scenario, Avnet plays a pivotal role that adds value and drives mutual benefit to all members of the supply chain — suppliers, resellers and end customers.
Today, we talk with Tim FitzGerald, vice president, technology solutions practices leader at Avnet Technology Solutions, Americas, about how leveraging a solutions distributor can enable both suppliers and VARs to increase their solutions sales, while directly addressing end-users’ business challenges so everyone in the supply chain wins.
Combining ingredients equals a bigger piece of the pie
As resellers consider upgrading to a solutions-centered approach to selling, FitzGerald suggests that a solutions distributor can play a vital role in helping them reach their long-term business goals. Before entering into the world of solutions selling by leveraging multi-vendor solutions, resellers should ask themselves several questions:
- What are we really good at doing?
- What new area(s) do we want to attack?
- Where do we want to be in five, 10, 20 years?
- Which existing skills apply to new opportunities, and which new skills/expertise will we need to be successful?
- Are our salespeople calling on the right decision-makers?
- Are we uncovering and solving for customers’ real problems?
- How are our products and services more valuable to end-users than those of our competitors?
Few small to medium-size companies across most vertical markets today have the business resources needed to pull together complete IT solutions. “These companies have fewer knowledgeable IT experts on staff and, therefore, are less likely to have the ability to do solution design and implementation,” says FitzGerald. “Avnet develops a channel partner ecosystem for VARs so they can deliver the complete end-to-end solutions customers want and need while meeting their own business growth objectives.”
FitzGerald explains that a reseller can use this solutions-focused approach to become a “trusted adviser” in solutions selling and that it is imperative for continued business growth. This process involves getting to know all aspects of a solution including end-user pain points. “The solution provider’s knowledge, services, software and hardware are the elements needed to address end customers’ business problems, and when a company is more competent in all of these areas, it sells more products and grows faster,” says FitzGerald.
A key element of multi-supplier solutions selling is the proper sales training, which may also be provided by a solutions distributor. Avnet helps its reseller partners’ sales representatives become trusted advisers in specialized vertical markets, such as health care and government (federal, state/local and education) and technology markets (virtualization, storage, security and networking) through its SolutionsPath® reseller partner enablement tools and training. SolutionsPath is Avnet’s proven methodology that provides step-by-step planning and enablement for VARs to overcome customers’ business challenges through solution specialization, resulting in overall revenue growth, accelerated time to market and increased customer retention and recruitment. Becoming a true trusted business adviser for their customers gives VARs a sustainable competitive edge.
On the flip side, the real payoff for Avnet’s suppliers is in understanding the value of the SolutionsPath methodology and how it helps ensure more of their product gets selected and sold into each unique solution, all developed by a reseller striving to perfectly meet the end customers’ needs. “To do this, they [suppliers] need a clear model outlining the steps to get their products designed into a solution to solve end-user problems,” FitzGerald says. “They must determine which steps are owned by the reseller, the distributor and the supplier respectively, and then, they must align their investments and compensation for each of these three players. Suppliers don’t get results when the process is out of sync because there’s no alignment for growth.”
To find more and better ways to get their products into market-ready solutions, these suppliers often require the services of a solutions distributor, a company capable of understanding the target industry and its business problems. Prior to contacting a company like Avnet, FitzGerald suggests these supplier manufacturers first answer questions like:
- What is our value proposition (for end customers and for VARs)? Is it clear? Is it industry-leading?
- Does our current distribution channel carry our message(s) to the right industry decision-makers?
- Do they (resellers) have the sales tools, education/training, market knowledge, prospective leads and competitive advantage to win bids?
- Do our products support the needs the resellers are seeing in the markets we serve?
Do our products/services provide the benefits and resolve the pain points end customers are facing?
Being able to answer these questions allows suppliers to design products and services that create high-value solutions for VARs and end-users, driving a more prosperous and efficient ecosystem.
Resellers and solutions distribution
This type of industry knowledge and level of trust is important for VARs. “There’s a wealth of research that shows end customers want to do business with a company that has the products to meet their needs,” FitzGerald says, “but they’re also looking for a partner — a solution provider — a true trusted adviser. For the end customer, a trusted adviser is a person they feel most comfortable with when they’re not sure of the solution required to best address their business problem. Someone they can call and ask, ‘Can you help me figure this out?’”
As FitzGerald points out, “The sweet spot to selling is having customers who need more of your help and seek you out for it.”
Customers, who know they are receiving the help and advice they need, buy more from value-added resellers. “People may be looking to buy servers from somebody, but the supplier needs high-value resellers that understand the product and the end-users in order to capture those opportunities,” FitzGerald says.
Not surprisingly, many resellers need specialized training to get to that level, which is where a solutions distributor comes in. FitzGerald explains, “Through Avnet’s SolutionsPath methodology, we develop resellers who are more competent on services, software and hardware and how each of those is deployed in a vertical market. We assess their company’s current position toward developing a trusted adviser practice. We work with them. We provide demand-generation playbook campaigns. We provide SolutionsPath® Playbooks, which are ready-to-use multi-vendor solutions that address specific business needs and problems. Basically, we give them a road map to become a best-of-breed VAR. When you’re a better VAR in a specific market, customers call you first, so you sell more solutions.”
Considering the complexities of putting together a multi-vendor solution, VAR reps also typically need practical help to close a complex sale. FitzGerald provides an example: “If a VAR sales rep calls on an end customer and discovers they need a solution requiring HP servers, Net App storage and VMware software, where does he/she go to pull that solution together? Many sales reps simply don’t know how to weave multiple complex products together and don’t have the time to track down the technical specifications or complete the required certifications. However, Avnet’s training provides the certification and technical expertise that gives end-users peace of mind when dealing with trusted advisers.
“For example, at Avnet, we have a website focused on individual solutions, not just products. The sales rep could go there, where solutions information from all three of these suppliers is centered on the customer’s pain point, and are already woven together. In addition, we have the Global Solutions Center located in Chandler, AZ, where we create high-level solutions and complex systems integration to build and develop solutions.
“We also train VAR salespeople — as well as suppliers’ reps — on what’s going on in the market today and how to apply ‘plays’ from Avnet’s Playbooks in the real world. We train them on vertical markets and what gets sold into them. Plus, we bring in tools to help salespeople enhance consultative solution selling skills.”
When requested, Avnet can come alongside VAR partners and provide hands-on assistance to their customers on a case-by-case basis. “For instance, if a VAR is looking for ways to reduce a customer’s cooling costs,” FitzGerald says, “we can assess current usage, propose a solution and explain the savings.”
The new IT reality
As a result of the recent economic downturn, companies are searching for ways to cut costs and control spending wherever possible, and that includes IT. Often they no longer build in hard costs for IT investments, opting instead for managed services and IT expenses that are as variable as possible. “These cost-saving measures mean increased sales opportunities for multi-vendor solutions,” FitzGerald says, “so suppliers and VARs need to be aware of them and be prepared to address them.”
With these opportunities come challenges too. In the future, resellers will increasingly be expected to deliver solutions via managed models. IT solutions will have to prove ROI in more visible ways. These ways and security implications will have to be reduced along with costs. Savvy VARs will leverage Avnet’s SolutionsPath® Services, a complete portfolio of professional and managed services that help VARs provide a mix of services, hardware and software cost effectively to better serve their customers’ broad IT needs and cost-reduction goals.
“Avnet addresses cost issues and how customers can use technology less expensively. We evaluate hot market opportunities,” FitzGerald says, “and help suppliers and VARs deliver services in line with technology practices and vertical markets.
“Market needs and trends drive our solutions strategy. We help companies to grow, we save them money, get their products to market faster, deliver shareholder value and enhance the employee experience,” FitzGerald states. “Accelerating your success isn’t just our motto; it’s our way of doing business every day.”