{"id":36093,"date":"2019-09-12T11:30:13","date_gmt":"2019-09-12T18:30:13","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=36093"},"modified":"2019-09-12T11:30:16","modified_gmt":"2019-09-12T18:30:16","slug":"does-the-managed-service-contract-shield-dealers-from-online-retailers","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2019\/09\/does-the-managed-service-contract-shield-dealers-from-online-retailers\/","title":{"rendered":"Does the Managed Service Contract Shield Dealers from Online Retailers?"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

One of the oft-repeated phrases dealers recite in discussing\nthe merits of a true managed service contract is the \u201cstickiness\u201d it creates\nwith the customer. The prevailing theory is that the more aspects of a client\u2019s\nbusiness that fall under the supervision of a dealer, the more difficult it\nbecomes for that customer to be pried away by a competitor. <\/p>\n\n\n\n

\"\"
Chip Miceli, Pulse Technology<\/figcaption><\/figure><\/div>\n\n\n\n

Still, it\u2019s unwise to underestimate the relentless pursuit a\nlarger retailer can unleash. Chip Miceli, president of Pulse Technology, cautions\nthere is always the threat of such a competitor promising the \u201cnext big thing\u201d\nin a promotion. Further, if a larger entity wants to penetrate a market and\nsell services at or below cost to pinch the competition, there is a danger of\nlosing market share with those tire-kicking clients who are more apt to try\nsomething new.<\/p>\n\n\n\n

\u201cYet, I\u2019ve always found that having a fair price and\nproviding excellent service will win in the end,\u201d Miceli said. \u201cAnd again, it\u2019s\nimportant to communicate this value proposition to customers regularly. We\nbelieve in telling our customers that there is a difference between value and\nprice.\u201d<\/p>\n\n\n\n

Cause for Concern<\/strong><\/p>\n\n\n\n

\"\"
Kevin Morris, OneDOC MPS<\/figcaption><\/figure><\/div>\n\n\n\n

One of the chief causes for concern is the sheer buying\npower a large retailer can offer, notes Kevin Morris, president and CEO of\nOneDOC MPS. \u201cIf you\u2019ve done a good job, there shouldn\u2019t be a concern,\u201d he said.\n\u201cBut if you\u2019re working with the CFO of a company, and that person\u2019s going to\nretire, the next CFO might decide to look at all new facts. When that happens,\n(the client) might look at someone like that because their focus is cutting\ncosts and they\u2019re not looking at all the parameters of it.\u201d<\/p>\n\n\n\n

A truly strong value proposition, on the other hand, doesn\u2019t\nnecessarily require an all-encompassing service contract to shield a dealer\nfrom any competitor, be it online retailer or traditional. Dave Clark, vice\npresident of sales for AIS in Las Vegas, notes that some clients prefer not to\nengage in a contractual relationship. Yet, they are also confident in AIS\u2019\nability to support them as their needs grow.<\/p>\n\n\n\n

\"\"
Dave Clark, AIS<\/figcaption><\/figure><\/div>\n\n\n\n

Indeed, Clark points out that the typical business owner\nprefers to maintain a small core of vendors to provide their needs, support\ntheir staff and infrastructure. \u201cThe value proposition is the economies of\nscale, because less vendors means less costs and less of their time, which is\ntheir most expensive cost,\u201d Clark said. \u201cAIS has customers who started out with\nus a-la carte, and five years later, they\u2019re still with us. They might decide\nthat they want to expand their relationship because they\u2019re implementing a new\ncall center, and we offer VoIP systems. Or they\u2019ve grown to a point where they\nneed full-time network support. Maybe they\u2019re going to be launching Microsoft\nOffice 365. <\/p>\n\n\n\n

\u201cThere\u2019s many different changes a business will go through\nover a three-to-five-year or 10-year period, and they want to be with a partner\nwho can not only help them in the interim with issues or projects that pop up\nas an a-la carte, but they want to know that if they ever want to have full\nsupport, they have a partner behind them who can provide that.\u201d<\/p>\n\n\n\n

Transactional Trouble<\/strong><\/p>\n\n\n\n

\"\"
Kevin DeYoung, Qualpath<\/figcaption><\/figure><\/div>\n\n\n\n

Kevin DeYoung, president and CEO of Qualpath, believes any\naccount insecurity may stem from the profile of the dealer\u2019s customer base, the\nlevel of value-add that they provide that the base actually appreciates. The\nbuy-and-sell relationship may ultimately be doomed to fail.<\/p>\n\n\n\n

\u201cIf you, as a dealer, cultivate a buy-and-sell relationship,\nthen you have to fight for every order every time,\u201d he said. \u201cIf they\u2019re not\nreally adding expertise or value, the (relationship) will be at risk and they\nwill be less sticky, particularly if they\u2019re not communicating with those\ncustomers. You can\u2019t just show up at the end of the contract, looking to renew\nthem.\u201d<\/p>\n\n\n\n

Rich Brandenburg, senior vice president of sales for\nDonnellon McCarthy Enterprises, remembers the time in the industry when it was\ngenerally acknowledged that when the dealer owned the print room, they owned\nthe account. That honor now falls on IT\u2019s shoulders.<\/p>\n\n\n\n

\"\"
Rich Brandenburg, DME<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cNowadays, if you own the server and the network, now you\nown the account,\u201d he said. \u201cIt\u2019s the IT piece, the managed services piece, that\npulls the equipment through now. If you just own the equipment and someone else\nhas that managed services aspect, you\u2019re probably going to be dead in the\nwater. Clients trust the dealer who owns that network, server, controls the\nemail, the information and business line applications. It\u2019s that profound\nexperience with the IT people that wins the account.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

One of the oft-repeated phrases dealers recite in discussing the merits of a true managed service contract is the \u201cstickiness\u201d it creates with the customer. The prevailing theory is that the more aspects of a client\u2019s business that fall under the supervision of a dealer, the more difficult it becomes for that customer to be pried away by a competitor. Still, it\u2019s unwise to underestimate the relentless pursuit a larger retailer can unleash. Chip Miceli, president of Pulse Technology, cautions there is always the threat of such a competitor promising the \u201cnext big thing\u201d in a promotion. Further, if a larger entity wants to penetrate a market and sell services at or below cost to pinch the competition, there is a danger of losing market share with those tire-kicking clients who are more apt to try something new. \u201cYet, I\u2019ve always found that having a fair price and providing excellent service will win in the end,\u201d Miceli said. \u201cAnd again, it\u2019s important to communicate this value proposition to customers regularly. We believe in telling our customers that there is a difference between value and price.\u201d Cause for Concern One of the chief causes for concern is the sheer buying power a large retailer can offer, notes Kevin Morris, president and CEO of OneDOC MPS. \u201cIf you\u2019ve done a good job, there shouldn\u2019t be a concern,\u201d he said. \u201cBut if you\u2019re working with the CFO of a company, and that person\u2019s going to retire, the next CFO might decide to look at all new facts. When that happens, (the client) might look at someone like that because their focus is cutting costs and they\u2019re not looking at all the parameters of it.\u201d A truly strong value proposition, on the other hand, doesn\u2019t necessarily require an all-encompassing service contract to shield a dealer from any competitor, be it online retailer or traditional. Dave Clark, vice president of sales for AIS in Las Vegas, notes that some clients prefer not to engage in a contractual relationship. Yet, they are also confident in AIS\u2019 ability to support them as their needs grow. Indeed, Clark points out that the typical business owner prefers to maintain a small core of vendors to provide their needs, support their staff and infrastructure. \u201cThe value proposition is the economies of scale, because less vendors means less costs and less of their time, which is their most expensive cost,\u201d Clark said. \u201cAIS has customers who started out with us a-la carte, and five years later, they\u2019re still with us. They might decide that they want to expand their relationship because they\u2019re implementing a new call center, and we offer VoIP systems. Or they\u2019ve grown to a point where they need full-time network support. Maybe they\u2019re going to be launching Microsoft Office 365. \u201cThere\u2019s many different changes a business will go through over a three-to-five-year or 10-year period, and they want to be with a partner who can not only help them in the interim with issues or projects that pop up as an a-la carte, but they want to know that if they ever want to have full support, they have a partner behind them who can provide that.\u201d Transactional Trouble Kevin DeYoung, president and CEO of Qualpath, believes any account insecurity may stem from the profile of the dealer\u2019s customer base, the level of value-add that they provide that the base actually appreciates. The buy-and-sell relationship may ultimately be doomed to fail. \u201cIf you, as a dealer, cultivate a buy-and-sell relationship, then you have to fight for every order every time,\u201d he said. \u201cIf they\u2019re not really adding expertise or value, the (relationship) will be at risk and they will be less sticky, particularly if they\u2019re not communicating with those customers. You can\u2019t just show up at the end of the contract, looking to renew them.\u201d Rich Brandenburg, senior vice president of sales for Donnellon McCarthy Enterprises, remembers the time in the industry when it was generally acknowledged that when the dealer owned the print room, they owned the account. That honor now falls on IT\u2019s shoulders. \u201cNowadays, if you own the server and the network, now you own the account,\u201d he said. \u201cIt\u2019s the IT piece, the managed services piece, that pulls the equipment through now. If you just own the equipment and someone else has that managed services aspect, you\u2019re probably going to be dead in the water. Clients trust the dealer who owns that network, server, controls the email, the information and business line applications. It\u2019s that profound experience with the IT people that wins the account.\u201d<\/p>\n","protected":false},"author":166,"featured_media":36094,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1650,82,87,1638],"tags":[3572,3221,3460,3521,697],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36093"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=36093"}],"version-history":[{"count":1,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36093\/revisions"}],"predecessor-version":[{"id":36095,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36093\/revisions\/36095"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/36094"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=36093"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=36093"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=36093"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}