How do IT and Telecoms companies choose their suppliers?
In the many years I have worked in the IT industry I have been supplier, reseller and end customer.
Big Telcos
As a decision maker in both a small and medium sized business I wanted a local supplier that I knew and trusted that could offer a range of options with good support. Obviously I wanted a good deal but I know from experience that the best deal is rarely the cheapest. I tended to avoid the big telcos even though I knew they were probably supplying my local reseller. Companies like BT, TalkTalk and Virgin are not geared up to deal with SMEs. Their overheads limit the time they can spend selling and supporting their products and once you get underneath their headline prices they often come out the most expensive.
Opportunity-led
The needs of the SME inform the requirements of the reseller. They need to be able to add products to their portfolio without a huge amount of fuss and expense. Large organisations have complex contracts and often require training fees, deposits, minimum order levels and forecasts. As a reseller my need for a product is sometimes opportunity-led. The opportunity may have gone by the time I have been ‘on-boarded’ and if I don’t win it I may decide not to carry on with the product, in which case all that effort will have been wasted. I know that part of my value is my flexibility and responsiveness and so customer service is really important. There is no point me picking up a problem from my customer at 17:45 if my supplier cannot support me until the morning. I need knowledgeable sales and technical support 24/7, backed up with automated tools for ordering, progress chasing and support.
Pricing
Pricing is an interesting one. Whenever I see a supplier saying price is not the most important thing, I know they are likely to be too expensive. Whilst my customers are prepared to pay a small premium for a local trusted supplier, frankly I am not. Suppliers often forget that resellers have to make a decent margin and have a price keen enough to win the business in the first place. If they want a steady stream of business then their pricing has to be predictably competitive. If ‘pricing support’ becomes the norm rather than the exception, I know I have the wrong supplier.
Channel-only?
Of course I would prefer dealing with channel-only suppliers but if they have some direct business it is not a show-stopper. The IT and telecommunication community in the UK is relatively small and the experienced suppliers know if they let their direct salesforce get out of line, they could lose their channel business overnight.
Automate and negotiate
As a supplier to resellers I know that I have to be incredibly easy-to-do-business with. If I spend money on automation and online tools this reduces the number of people I need to employ, gets more orders into the system and delivered quicker. It cuts down errors and saves me money. If I want to grow my business I must use these savings to keep prices low. I must also be a good negotiator to ensure I am buying at the right price.
Jola supplies best of breed Internet connectivity, cloud voice and mobile products to UK SMEs through a network of resellers and dealers.
