08-07-2005, 12:45 PM
I've a cjust come on as a partner of a local computer consulatncy and retail firm. As computer reseller, for the past year or so we have been experiencing aggressive competition in terms of the computer hardware provisions from the major players such as pcworld and dell. In addition to our hardware services we also provide web development, computer repairs and maintenance (after sales support) and Computer Newtork deployment and administration. Currently we have two core IT staff which are paid on commission basis due to lack of strategic focus, agressive price competition and low sales turnover. We aim to serve the local SE area and wider south london areas also. Our location is not highly visble and based in a business centre. We communicate with our customers electronically and via telephone. Our goal is to increase the awareness of service provisons and location, differentiate our business offerings and improve customer loyalty.
Do you have any advice on how to go about acheiving these goals in terms of marketing and general management without breaking the bank?
10-07-2005, 01:06 PM
Hello Natalie 21,
This sounds like an interesting business, in that although you have a lot of offerings, they could work well together. The 'one stop shop' approach seems to be the way this sector is going and it's true that all the big players you've mentioned are expanding into services like network installation, on site maintenance and support etc. Although this means more competition for you, it's a good sign too, in that it shows it's a potentially lucrative niche to be in.
From what you've written, I think that the key things that concern you at the moment are general management issues (the lack of strategic focus, your IT staff, the location) and marketing issues (the competition and how to boost the low turnover). Tackling these one by one then:
I can see where your concerns come from here, and I haven't come across many companies that manage to juggle this many strands effectively - hardware, software?, repair and maintenance, network installation, and web development. I think it's possible to do that, and as I've said above there's an advantage to the 'one stop shop' approach, but I think for marketing (below) you have to focus on two or three of these at most (preferably the ones you do best and/or where you're service is best differentiated).
I think the location shouldn't really be an issue - my own web developers and also the people who do my computer maintenance are in a truly appalling location (city centre but no parking for miles!) and it hasn't held them back. Customers rarely go in to their offices, which I imagine is the case for you too, and electronic communications can be quicker and simpler for everyone.
Your IT staff being on commission only is an unusual one - are they demotivated by this I wonder, especially as they must be aware of competition levels rising (and making it even harder for them to earn their commission)? If they are, does their demotivation have a knock on effect on your customers? I realise you may not be able to afford base salaries for them, but the commission rates need to be good enough to compensate them for the fact that this is not normal in this sector.
It's a great start that you're aware of the competition and what they're doing and that you have some goals, in terms of raising your visibility, differentiation and improving loyalty. These goals are sound, but you could maybe do with putting some measurable objectives underneath them (see the marketing section of the Shell LiveWire business planning pages for more on that). In terms of actual tactics it might be worth having a think about the following:
If you know roughly who your customers are, this comes down to what their habits are - what do they read, where do they go for work and leisure, etc. Do you do any current advertising or PR? For advertising, the obvious one is the Yellow Pages and yell.com (my computer maintenance man said the Yellow Pages worked really well for him, but the Thomson and Business Pages didn't). For PR, again, you want to hit the publications these people are most likely to read, so you could think about your local Chamber of Commerce or business club's newsletter (these are handy for targetting MDs of small to medium sized companies, but you may have to join them to get 'profile' in the newsletter!). It's also worth you going along to networking events at Business Link, the Chamber of Commerce etc, as these are where you may find 'clusters' of your type of customer. You might want to pull together a brochure or flyer that you can give to people at these events too.
This is always a tough one in a competitive sector like yours, and that's why I asked about your IT staff and their motivation levels as your people or service may be one of few differentiators here. It might help to look at your whole marketing mix and how it compares to competitors, so for services to look at product (is what you offer better than the competition?), price (is it cheaper/pricier?), place (where do you sell it or offer it?), promotion (who do you promote to and how?), people (your IT staff - what would make them work better?), process (in this case, the end to end process, from the customer's first contact with you right through to the aftercare) and physical evidence (do you leave customers with a brochure, do the staff dress smartly etc.?). Once you know what differentiates you from the competition, this is what you need to highlight in your ads, PR and brochures. If you don't come up with many differentiators, you could also think about 'rebundling' what you have - if you don't already, could you offer support contracts (instead of charging on a one off basis)?
The old adage about it being more profitable to hang onto existing customers than get new ones is very true, so here you could look at cross-selling other services to existing customers and also coming up with 'repackaged' services that keep them coming back. In terms of cross-selling, do your customers tend to follow a certain pattern (i.e. buy a PC or laptop, then a router, then buy network installation, then a website etc.)? If so, at what point in this curve do you tend to lose them? In terms of 'repackaging', is their anything you can offer that will keep you in your customers' minds on a regular basis? Do you regularly call them to see if their new hardware/software/network is working as they wish? How about offering a free 'IT healthcheck' on an annual basis if you don't already (this could be a good opportunity for cross-selling)?
Phew - that's quite a list! I do think this is an interesting business Natalie, and I think you're obviously aware of what your current issues are, which is crucial in terms of working out how to resolve them. I hope this helps, and best of luck with your business,
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