How VARs Can Beat the RecessionBy Mark Tanner, VP AutoID, POS, Card and Physical Security, North America, Synnex Corporation 
Recession-proofing your business, or at least strengthening it to survive an economic slowdown requires smart planning, good decision-making and reviewing your own efficiencies as much as those of your customers. Here are 10 tips that will not only provide short-term benefits, but will propel long-term growth when the overall economy recovers:
1. Hire New StaffReducing staff is often the first step a company will seriously entertain and it is often the first mistake they make. Turn this into an opportunity by adding to your staff. During a recession, many companies have downsized and begin to lay off productive and valued employees. Look for talented people your competitors are laying off. Bringing in new employees can lead to fresh ideas, creative thinking and it sends a clear message to your existing staff that may be concerned with rumored lay offs. Increasing your staff morale is a valuable asset and will increase productivity. I'm not saying you shouldn't let go of poor performing employees; however, I would expect this to be a normal exercise whether there is a recession or not.
2. Be Frugal
Watch your debt very closely. Make smart decisions to avoid unnecessary debt, especially short- term debt affecting your cash flow. Avoid expensive furniture and fixed assets, expensive hotels and off-site meetings. Plan your travel, implement three week advanced flight bookings, negotiate rates with a hotel chain (one with a hot breakfast), shop your car rentals, and purchase personal Internet wireless routers for employees that frequently travel. Every dollar saved contributes to your bottom line and keeps your debt in line. An expense authorization and approval process is a must.
3. Selling on ROI
Driving efficiencies and costs down should be first and foremost on everyone's mind. As fuel surcharges climb, they must either be offset with increased pricing or, better yet, lower costs elsewhere in the business. Now is the best time to introduce customers to the ROI benefits of AIDC technology:
-- Improved Warehouse Logistics: Inventory accuracy, real-time availability, inventory picking with fewer physical steps.
-- Direct Store Delivery: Shortest routes through GPS instructions, driver accountability and whereabouts, real-time billing.
-- Field Service: Better customer service, access to live data, integrated communications. Provide hard data on ROI and immediate cost savings for your customer.
4. Health care, Public Safety, Education and Government
What do all of these markets have in common? They all have a budget to spend. Health-care services are viewed as a necessity and therefore can be a recession proof market. Develop solutions and market them both on ROI and if you can, work in a "saving lives" statistic. Barcoding blood samples, matching patient medication with the correct patients, RFID tracking of operating room surgical equipment.
Public Safety is looking for mobile work-force improvements using AIDC technology, accuracy of police officer ticketing and parking enforcement. IP Security provides public safety and can be integrated into wireless mesh networks.
Education is also a hot area for IP Security, card technologies and digital signage.
5. Watch Your Profitability
Keep a careful eye on your profitability and have a clear understanding of the costs of doing business. This includes production costs, product costs, staffing and the cost of providing services for your customers. Understanding the costs of doing business allows you to focus on highly profitable areas and leaving the less profitable areas to your competitors. Know when to pass on business that will ultimately reduce your bottom line. The more staff you have executing on low margin business, the less you will have for profitable opportunities.
6. Getting More Out of Your Existing Customer Base
Take a close look at your past sales, and look for new opportunities with old customers. There are often similar ways to deploy a solution with the same customer. For example, you have many customers using your warehouse inventory solution to improve their inventory logistics. Could you deploy a similar version of this solution in an accounting department? Files are much like inventory. The file folders are stored in a specific location and must be retrieved at a specific time in the future. What is the application used to store this information? Can you adapt this need to your existing offering? Will it save your customer the physical time it takes to search for a file?
7. New Market Opportunities with Existing Customers
Keep in frequent contact with past customers. It is easier than you think to add incremental technologies to your sales arsenal. Physical IP security, card and access control, Time and Attendance and Digital Signage are all technologies that can be quickly learned and have a very short ROI for the customer.
Physical IP Security is growing at a rate of 48 percent per year. Security is more often a concern daily with many end users who are including upgrades in their infrastructure budgets. Traditionally, the physical security market has been served by the analog security resellers. The shift to IP technology is fuelled by mega-pixel technology, video analytics such as people counting, improved motion detection, object disappearance and reappearance. IT administrators want these devices accessible on their IP networks, something not offered by analog technology today.
Card technology is everywhere. How many cards are in your wallet? Employee IDs, library cards, memberships, licenses, school cafeteria allowances, access control, loyalty programs, gift cards...the uses for card technology are growing at a fantastic rate.
In addition, time and attendance has a less-than-six-month ROI payback for companies with less than one hundred employees. The solutions are easy to install and tie into existing HR systems if necessary.
And let's face it -- digital signage is everywhere. When you get creative, there are many uses for digital signage in every aspect of the market today, which include the following areas:
-- Warehouse logistics: live shipping statistics, company announcements, emergency status and procedures.
-- Sales environments: promotions (advertising paid for by manufacturers), employee recognition, management messaging and branding, skill development.
-- Education: announcements, schedule changes, team and club recognition.
-- Health care: patient awareness, health improvement, treatment care, on-demand programming (e.g. dental offices).
-- Retail: is an obvious one but consider low-cost LCD picture frames rotating through still picture advertisements from a store flyer.
The possibilities and solutions are endless, but customers need help with the implementation and ongoing support services.
8. Customer Pricing and Financing
One word: flexibility. Customers want your solutions; it is up to you to make them affordable. Understand your customer's budget and scale your services accordingly. Consider offering several price ranges with increased and reduced service offerings. Bottom-line, get the sale. Spread out the payments to help the customer budget for the complete project. We are seeing an increase in leasing alternatives in distribution which is why our sales reps have access to real-time rates and pricing information. Did you know there is additional margin in leasing?
9. Increase your Marketing
Excuse me? Aren't we supposed to be battening down the hatches for the oncoming decrease in business? Cutting your marketing budgets and eliminating marketing activities will increase the business you may lose. Instead you should increase your marketing activities, just do it in cost-effective ways. Classified ads, online advertising, blogs, yellow page call outs, and my personal favorite -- business networking. Reach out to those in your community who can help you find business. Increase your breakfast and lunch meetings to build a network of referrals. If it fits your business, you'd be surprised how many potential customers will pass through a local barber shop, and we know how they like to hold a conversation. Consider asking them for help to spread the word.
10. The Answers are in the Details
Listen to your employees and customers. Employees will know where you can improve your business. Look for areas you can cut costs, increase productivity and win more business. Delegate a manager or senior employee to sit with staff in each of your departments. Have them job shadow and build a process improvement plan one position at a time. The goal is to improve your internal efficiencies and free up resources you may already have. Listening closely to your customers and adapting to their needs may lead to increased profitable business. It may be as simple as changing their invoicing or shipment methods, adding efficiencies to buying procedures, or new product lines they are sourcing from inefficient suppliers.
A recession-proof company is flexible and seeks opportunities where others see only gray skies ahead. I will leave you with a point that Jim Estill, CEO of
SYNNEX Canada wrote recently on his blog (
http://www.jimestill.com), and that is: "While change and adapting is good, don't over-react in the short term at the expense of long term health and prosperity." Implement these steps and strengthen your business for the sunny days ahead of you.
This article originally appeared in the Oct. 8, 2008, edition of AIM Global's weekly e-newsletter. For more information on AIM, or to become a member, visit http://www.aimglobal.org.
Posted On: 10/13/2008 from VSR
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