Let’s talk about what it means to be a value-added reseller, or VAR for short.
I know most executives in my industry would have no problem rattling off a definition. But in my tenure at Marco, Sharp and other organizations, I’ve found that revisiting some fundamental concepts is incredibly valuable. And unless we do that as our industry evolves faster and faster, the winds of change can blow even the best of us off course.
A successful VAR is one that provides additional value to the buyer of a certain product. At Marco, providing that value is our North Star. And despite falling print volumes and the seismic shifts in managed IT the past four years, what’s consistently allowed us to grow during that time hasn’t been some novel business concept. Rather, it’s never losing sight of our fundamental reason for being.
The Race to the Bottom
I don’t want to gloss over a universal truth: There will always be clients who want the cheapest possible service. And I, for one, don’t blame them. But our job is to provide them with value. At Marco, we believe the service provider that neglects basic cybersecurity hygiene, cuts critical corners on service or won’t set clients up for long-term success is actually doing them a tremendous disservice.
We sometimes have to do some additional education to help our clients understand what our value actually is. And because we work with B2B clients, most of them will listen. They, too, have felt the sting of getting undercut by a competitor that supplies an inferior product or service and leaves their entire customer pool mistrustful. They, too, have felt frustrated when the very company they relied on is the one that caused a crisis. By and large, these people understand that you get what you pay for and that their productivity is closely tied to their profitability. A few companies will always insist on going with the cheapest bid. But we’ve found that those clients aren’t ultimately a good fit for us anyway. In fact, they’re often a liability.
That’s why I find it ironic that a few larger companies seem determined to intentionally dilute the value of their managed services and exert pressure on the rest of our industry to do the same. But Marco isn’t about to race other providers to the bottom. We intend to keep running in the opposite direction—delivering more value at each price point, not less.
The Hard Truths
Some of the country’s best marketing firms will charge significant amounts of money to collect a mountain of data from your customers in order to help you win more deals and retain more business. I’m not discounting their time and energy nor the results they achieve. But what’s funny to me is that if you listen, your clients will provide this information free of charge. Many companies tend to disregard this feedback, and while complaints aren’t always nice to hear, these companies are missing out on valuable insights that could ultimately help set their business apart.
Industry-wide, businesses are slowly shifting away from print. There’s no stopping that. But our clients have told us they have new IT needs that are largely going unmet. For example, managed IT can be expensive for a lot of small- to mid-sized businesses (SMBs) that still desperately need support. To be fair, providing fully managed IT to businesses with under 50 employees is also less profitable for most providers.
To “solve” those problems, some providers will offer a dramatically scaled-back service that leaves clients largely unprotected and becomes more profitable when they experience emergencies. But what’s the value in a partner that profits from your misfortune? It isn’t hard to see why clients who use these services ultimately become dissatisfied and mistrustful.
What Our High Road Looks Like
We took the time to develop something fundamentally different, so we were very excited to launch ACE 365 earlier this year. Instead of dramatically scaling back (providing managed IT, but poorly), we decided to create a new service that focused our IT expertise where it would provide the most value for our SMB clients: securing their Microsoft environment. And because our team already has the skills and certifications to knock that out of the park, we’re able to offer our clients the world-class support and protection they actually need at an affordable price point for both of us.
Our clients also told us they wanted to access top chief information officer (CIO) and chief information security officer (CISO) talent, but couldn’t afford to hire them. That pain point would have been easy to brush off, as it’s a universal problem. But we found a way to offer the regular mentorship from top-notch CIO and CISO talent our clients needed. And we do it at the cadence they desire in a way that worked for everyone.
Of course, developing new services takes time, and listening to your clients takes dedication. But if you’re a provider of any significant size, constantly trying to retain dissatisfied clients is like trying to stop the wind with your hands. And while rising to the top by racing to the bottom might be an effective strategy in other industries, for managed technology solution providers such as Marco, I think our future depends on keeping the bar as high as possible.
