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In this increasingly competitive environment it seems that fewer and fewer deals are closed without some sort of competitive interference at some stage of the negotiations. If it is a large deal then there will undoubtedly be RFIs (requests for information) and ITTs (invitations to tender) to deal with but with the majority of medium to small deals competitive threat really comes into play once the hardware has been specified. It is at this point that the purchaser has an exact spec to take out to the market or to give cold callers in an effort to try and get this part of the project cost down.
For VARs and solutions providers this comes with the territory and is something they have to try and reduce through their own unique added value services as none of the vendors out there will guarantee them exclusivity on a deal. Right?
Wrong! Things are changing! Ive spent a lot of time in the data capture industry and have seen my fair share of aggressive gatecrashers coming in at the last minute and winning deals by driving the entire margin out of the hardware. For the gatecrashers this is fine as theyve invested little or no time or resource in closing the deal and so for them to make a few points is still profitable. However for the VAR or solution provider who may have taken months, if not years, to get to this point in the negotiation, it is a major nightmare that can result in big loses in investment.
So why should the vendor carethey still get the hardware sale and havent had to drop any margin themselves? This is partially correct, but for any forward looking vendors not just looking at one deal from an end user, wed like to try and secure repeat business and roll-out across other areas of the business. To achieve this we need partners who are dedicated to looking after our hardware and ensuring that their solutions work on it effectively so that when it comes to further roll-outs or replacements our products are top of the list. If our product is sold in by a last minute gatecrasher who adds no value and simply sells and goes then we have far less chance of getting this repeat business and the end user account wont be managed. If unmanaged then all too often the hardware gets the blame for technical challenges that arise during roll-out. Without an embedded partner supporting the end user we will have no one to work out whether the issue is down to hardware or in fact down to software or infrastructure, and its all too easy to blame the hardware.
At Datalogic we value our partners and, in turn, their customers. We understand the huge amount of investment that can go into a deal and the frustration and lost revenue that results from having it snatched out from under your nose at the eleventh hour by a gatecrashing competitor, or, worse still, by the vendor deciding to sell direct!
Because of this weve decided to take a stand in the industry and do things differently. We now have a strategy of safeguarding our partners on deals to try and prevent this happening to them and to try and ensure that our products are sold in by knowledgeable people who have the skills and experience to implement them effectively. Additionally, we have a strategy of not ever selling direct and guarantee that every Datalogic product is sold through our channel.
We see this as a win-win scenario:
The partner wins by securing the whole deal and making a reasonable margin on the hardware
The end user wins by purchasing through an experienced supplier that has the know how to ensure a successful implementation
We win by increasing our chances of getting repeat business from the partner due to the loyalty shown and not getting into a margin war
Both Datalogic and the partner also win by increasing our chances of getting repeat business from the end user as the products are implemented successfully, giving them a great chance to prove themselves and to develop user attachment.
To take advantage of this our partners simply need to inform us as soon as they start work on a new opportunity. We will check this against our list of declared opportunities and as long as they are the first partner to inform us of the deal and can show that theyve been engaged from the beginning or have just got the opportunity to quote against one of our competitors then we will guarantee to safeguard them on that deal. We will also work with them to help them secure the deal. The bottom line is that if any of our other partners come to us asking for support on the same deal them we will remain loyal to the partner that first brought us the opportunity and placed their trust in us on that deal.
At Datalogic we realise that if we look after our customers they will look after us. In an industry where competition is getting increasingly fierce, margins are starting to get cut and many of the vendors are also selling direct we see this strategy as offering a clear differentiator to our partners and the industry.
Paul Duggan is managing director of Datalogic UK, the UK division of the leading European bar code reader and mobile computing devices manufacturer. Datalogic products include both manual readers and fixed industrial scanners for applications in manufacturing, transportation and logistics, and distribution and retail industries. With their advanced technology, intelligent design, and solid reliability, Datalogic is present in the promising RFID market via its subsidiary EMS Inc. (Scotts Valley California) with a leading position in the automotive sector, electronic manufacturers and warehouse management systems (WMS). In addition, with the recent acquisition of Laservall, the Group has entered the laser marking sector.