Are distributors recession proof?

There’s been a lot of talk about recessions and economic slowdowns lately. Even Ingram Micro’s CEO Greg Spierkel has been quoted in the press saying that he’s seeing a softening of demand in North America and Europe.

While Ingram is experiencing “some softness” in these markets, Latin America and Asia are still strong, so Spierkel believes Ingram’s outlook is solid. However, the distie will focus on tightly managing expenses and cultivating areas that could drive growth.

There’s also a possibility it will purge itself of very small vendors or those who haven’t really embraced the channel, but are testing it out through distribution.

No doubt other distributors are feeling the same “softness,” at least in some parts of their businesses.

It’s often said, though, that reeling in a new customer costs a lot more than keeping an existing one. And in this business climate, keeping existing customers could be as good a strategy as any. VARs don’t always follow up on software license or warranty renewals – after all, it is a pain to keep track of – though there are tools out there to help them do this.

One of those tools is Tech Data’s MyOpportunityTracker, which is almost like a mini-CRM system for VARs and solution providers by notifying them when service contracts are about to expire.

The distie just beefed up the tool – more than 30 vendors are now participating, and it’s tracking up to 50,000 opportunities at any given time. It’s able to do this through Tech Data’s data mining capabilities.

In particular, though, it now allows VARs to manually input service contract information – from warranties to software licenses – bought directly from vendors or even other distributors in order to receive renewal notifications (up to 120 days in advance of expiration). Rather than just providing alerts, it’s helping VARs manage their priorities, and includes pricing for renewals as well as potential alternatives such as upgrades.

Tech Data launched the program about two years ago, starting with the MyOrderTracker tool, which allows solution providers to notify customers when products are shipped (and, like the name suggests, track those products). Last May, it brought out the first incarnation of MyOpportunityTracker, and then in November introduced MyLicenseTracker for tracking software licenses.

And it’s not done yet. In the coming months, it’s looking to expand the number of vendors participating in the program. So far, it has some big names on board, including Apple, Canon, EMC, HP, IBM, Microsoft, Nortel and Red Hat. The distie may also develop other opportunities through its data mining capabilities, though it hasn’t specified what these opportunities might be.

Despite a softening economy, there are still going to be hot technologies and hot markets. For others that maybe aren’t so hot, turning inward, and looking to keep existing customers happy (and perhaps upsell to those customers) could be one approach to weathering the storm.

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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