You sell the service contract when you sell the device – or never
There are few sentences I hear more often in our industry than this one: »We’ll sort out service if something happens.« It sounds pragmatic, customer-friendly and unobtrusive. In reality, it’s the most expensive sentence a reseller can say to an end customer – for both of them.
Why? Because there’s exactly one moment when an end customer thinks about service, and that’s when they buy the device. At the point of purchase, the budget is available, approval is already under way, and one extra line in the quote barely gets noticed. Three months later, the budget has been spent, the buyer is on holiday, and nobody is going to sign off on maintenance for devices that are currently working perfectly well. And there’s another factor: many manufacturers’ service contracts can only be purchased within a certain period after the device itself. Miss that window and you’re no longer negotiating the price – you’re asking for goodwill.
Let’s look at an example: A warehouse with thirty mobile computers, and one of them fails. Without a contract, that means getting a repair quote, obtaining approval, sending the device in and waiting. Three weeks is by no means unusual. During that time, you’re not just missing a device – you’re missing a workstation. Assume just two hours of lost productivity per day at €40 an hour, and over fifteen working days that adds up to €1,200 – before you’ve even paid for the repair. Now compare that with what a service contract would have cost for that one device. Your end customer will do the same calculation. Unfortunately, they’ll only do it afterwards – and when they do, they won’t remember the manufacturer. They’ll remember you.
Now for the uncomfortable part, and this one is about you, not the end customer: Many resellers leave service out because they don’t want to make their quote more expensive. The concern is understandable. But you’re not competing against your competitor’s price. You’re competing against their excuse. The supplier who quotes without service is two lines cheaper in the comparison – yet nowhere to be seen for three weeks when the first device fails. I’ve already written about »cheap is best« and total cost of ownership – the service contract is where that theory turns into actual euros.
And there’s something else that often gets overlooked in the discussion: a service contract means recurring business. You sell the hardware once. The contract keeps the customer with you for years, reminds you when it’s time to renew and opens the door when the devices need replacing. Call the customer at the end of the contract term and you’re in a position to sell the next generation. Without a contract, you may only find out about the replacement when the tender lands.
Here’s what we contribute: We carry the manufacturers’ service items and find the right one for the device for you – which, with some manufacturers, is practically a science in itself. You don’t need to know which contract term, level of cover and device model belong together. You just need to ask. Or better still: let us ask about service with every hardware enquiry.
So, include service in every quote whenever a device is part of a process that comes to a halt if that device fails. The end customer can always remove it. But then it was their decision to remove it, not yours – and they’ll remember that difference when the first display breaks.
So remember: »The service contract you don’t offer is the one your competitor sells when the first device fails.«
Finally, you only need one distributor
Count how many...
Count how many distributors you have an account with. Three? Five? I know resellers who buy from seven – with seven portals, seven passwords, seven credit limits and seven contacts, one of whom is reliably on holiday. I’ve already written here about what I think of out-of-office replies. There was always one reason for collecting distributors, and it was a perfectly sensible one: nobody had everything. One had the devices, another the accessories, a third the service contract and a fourth happened to have stock. My argument is this: that reason is disappearing.
Let’s start with the maths, because you won’t believe me without it. Take twelve orders a week. Every additional source costs you fifteen minutes per order: log in, check stock, compare prices, place the order, match the delivery note, file the invoice. With two additional sources, that’s thirty minutes per order, six hours a week, three hundred hours a year. At €50 an hour: €15,000. Almost two working months in which nobody at your company has sold anything. Did buying from five different sources really save you €15,000? Sometimes, yes. Most of the time, you saved three euros on a scanner and never did the maths.
Then there’s the part that causes the most headaches: stock. With us, you see what’s in the warehouse – real quantities, not »available on request«. You can reserve stock for your project, and reserved means reserved: the devices sit on the shelf waiting for you, not for whoever shouts loudest tomorrow. And every reseller has their favourite products – the three scanners, the one printer, the terminal that appears in every second quote. Tell us what they are. We’ll make sure those exact products are there for you, even in the week when the market has been cleared out. I’ve already written about distributors without warehouses. This is the opposite.
The second point is less visible, but more important in the long run: your projects and service contracts are all in one place. Where was the service contract for those eighty devices from two years ago? When does it expire? Which project price applied, and which end customer was it registered for? If the answers are spread across five distributors, you’ll find them in the inbox of a colleague who no longer works for you. If they’re all in one place, you see which contract is about to expire – and call your customer before someone else does. You already know from this series that a service contract is either sold with the device or never sold at all. The renewal goes to whoever knows the date.
Then there’s the question of product range, because a single distributor is no use if they don’t stock half of what you need. We’re not a broadliner, and we don’t want to become one – I’ve written about why before. But within our specialist field, we go wide: scanners, mobile computers, label printers, POS systems, receipt printers, touch displays, customer displays, cash drawers – and all the accessories that go with them, from charging cradles to that one cable that always ends up missing. A rollout rarely fails because of the device. It fails because the mount was ordered from another supplier and arrives a week later, while forty devices are sitting in your customer’s corridor.
And now to the part I consider the most important. A distributor who only supplies what you already sell is a warehouse with a phone number. We’re constantly adding new manufacturers and new product areas – RFID, security technology and whatever comes next. For you, that means you can try out a new field without setting up a new supplier. Same account, same contact, same credit limit – and someone who can tell you what other resellers are currently learning in that field. Marketing calls that a Growth Engine. I call it this: your product range grows without your supplier list growing with it.
Now for the uncomfortable part, and this one goes against my own argument. In this series, I’ve warned about having one big customer that everything depends on. Doesn’t the same apply to having one supplier? Of course it does. Keep a second account. The day will come when we don’t have a particular item, and when it does, we’ll tell you rather than inventing a delivery date. I don’t want you to buy from us because you no longer have any other choice. I want you to buy from us because, for the past year, you haven’t needed another choice. There’s a difference – and it’s one we have to earn again with every order.
So remember: »A second distributor is insurance. A fifth is a sign that the first one isn’t doing its job.«
Trade shows are dead. Long live dinners!
I’ll admit it: I’ve been to more trade shows than I care to remember....
I’ll admit it: I’ve been to more trade shows than I care to remember. I’ve stood at exhibition stands, lugged catalogues around, handed out pens and spent evenings in hotel bars talking about promising contacts who, come Monday, turned out to be students with a passion for collecting carrier bags. At some point, I started asking myself the question every financial controller had been asking for years: What does any of this actually achieve?
The honest answer is uncomfortable. These days, a trade show is largely an event where exhibitors visit other exhibitors. Everyone has already seen the latest products online, and the reseller you actually wanted to talk to is either at the stand next door – or hasn’t made it to the show at all because they’re short-staffed. You pay for floor space, stand construction, hotels at exhibition rates and three days with your sales team away from the office. And you come home with a stack of business cards, a third of which leave you wondering why you were given them in the first place.
Let’s use some example figures. A small stand with all the trimmings easily costs €25,000. If that results in a hundred genuine conversations, that’s €250 per conversation – and many of them last four minutes and end with: »Send me some information.« For the same money, you could invite a hundred partners to a really good dinner. Two hours, no neighbouring stand, no announcements over the PA system, no pens. Which of those two conversations will you still remember a year later? Exactly.
Now for the uncomfortable part – and it applies to me too: Trade shows aren’t completely dead. Manufacturers need the big stage, and some contacts really do happen simply because two people find themselves standing at the same coffee machine. If you disappear completely, people notice that too – just not in a good way. So I’m not saying: Stop going to trade shows. I’m saying: Stop treating a trade show as sales. It’s visibility. Sales happens somewhere else.
Where? Wherever people take the time to talk. I’ve written before that a slide with forty charts doesn’t convince me – an exhibition stand is basically the same slide, only you can walk around inside it. What does convince me is a conversation where someone listens, asks questions and remembers that your daughter has just finished her A-levels. That works a lot better around a dinner table than at a high table covered in a stretch tablecloth.
Anyone who knows us knows that we have a place for evenings like these where the food smells pretty good. But the principle works anywhere: at the restaurant around the corner, over a barbecue after a training session or at breakfast before a project kicks off. What matters isn’t the location, but the math behind it: fewer contacts, but genuine ones. Ten partners who know who you are after an evening together are worth more than two hundred business cards that end up in the recycling bin three weeks later.
So I’ll keep going to trade shows. But with lighter luggage instead of a catalogue full of products – and a short list of people I’m going to invite to dinner afterwards.
So remember: »At a trade show, you collect business cards. Around a table, you collect partners.«
Europe is not a country
At conferences, people like to talk about the »European market«, and every time they do, I think: There’s no such thing....
At conferences, people like to talk about the »European market«, and every time they do, I think: There’s no such thing. There’s a single market, a customs union and quite a lot of regulations coming out of Brussels. But there’s no European customer, no European language and – as you discover at the latest with your first rollout – no European set of regulations for POS systems either.
Take a perfectly ordinary project: Your customer is a German retailer with branches in Austria, Hungary and Romania. They want the same POS systems, the same scanners and the same printers everywhere. Sounds like one order with four delivery addresses. In reality, it’s four projects. The POS systems have to meet different fiscal requirements in each country, the keyboards need different layouts and the labels need different special characters. And when the printer stops working, the branch manager in Cluj isn’t going to call Germany. They’ll call someone who speaks Romanian – and if there’s nobody available, they won’t call at all. They’ll send an email to your customer instead.
The convenient approach is: order centrally, deliver centrally, and things will somehow work out locally. That works perfectly well – right up until the first problem. Then a German technician is on a plane to Budapest because nobody on site knows how the devices have been configured, and your margin is sitting in the seat next to them. Do the math: flight, hotel, two days of working time – €1,500 disappears very quickly for an issue that someone locally could have fixed in an hour.
That’s why we’ve chosen not to take the convenient route. Jarltech has its own sales teams in Germany, Austria, Hungary, the Czech Republic and Slovakia, Romania and Southeast Europe. Not just a local address with everything forwarded to Usingen, but people who know the language, the resellers and the particularities of their market. That costs more than running a central webshop with a translation button. And it’s the reason why a cross-border project with us doesn’t stop at the border.
Now for the uncomfortable part: Not everything applies everywhere. Product ranges, availability, manufacturer agreements – some things that are taken for granted in Germany don’t apply in a neighbouring country, or only apply with restrictions, because manufacturers sometimes define their sales territories differently from the way countries appear on a map. We tell you that beforehand, not afterwards. A European project where you discover in country number three that the product isn’t even authorised for distribution there isn’t a delivery problem. It’s a consulting error.
My advice: When your customer says »across Europe«, ask about countries, not quantities. Ask who will handle the installation locally, who will provide support, which language the user interface needs and whether the POS regulations have been clarified in every country. And then give us a call before you write the quote. I’ve written about the last mile before – with international projects, it isn’t one mile, but four, and each one speaks a different language.
Europe is a great idea and an excellent market. But anyone who supplies it as though it were a single country learns the expensive way what it really is: a collection of countries that all do things a little differently – and all have good reasons for doing so.
So remember: »If you deliver across Europe, you don’t need one point of contact – you need one in every language.«
Why we give you a later delivery date than the manufacturer
It happens regularly, and the mood on the phone is always the same: »The manufacturer says week 40, you say week 41 – why are you slower?« The short answer: We aren’t...
It happens regularly, and the mood on the phone is always the same: »The manufacturer says week 40, you say week 41 – why are you slower?« The short answer: We aren’t slower. We’re simply more honest about what the date actually means. I’m writing down the long answer here because it might save you an awkward email to your end customer on your next project.
A manufacturer’s delivery date is generally a dispatch date. It tells you when the goods leave the manufacturer – not when they arrive with us, and certainly not when they reach your customer. In between, there is transport, goods receipt, inspection, warehousing, order picking and the journey to you. We’re not talking about weeks, but we are talking about days – and those days determine whether your rollout starts on Monday or the Monday after.
Imagine if we simply passed the manufacturer’s date on to you. You pass it on to your end customer, who schedules staff, books the technician and informs the branches. The goods are then dispatched on time – but they haven’t arrived yet. Technically, nobody lied. In practice, twelve people are standing in a branch looking at the empty space where the pallet was supposed to be. Who pays for the technician who made the journey for nothing? Not the manufacturer. Not us. You.
That’s why we give you the date when we realistically expect to be able to hand the goods over to you. It’s later than the manufacturer’s date, sometimes frustratingly so, and it certainly won’t win any popularity contests on the phone. But it’s a date you can pass on to your customer without ending up embarrassed in the end. A distributor who gives you the earlier date isn’t selling you faster delivery. They’re selling you peace of mind – until the day the goods fail to turn up.
Now for the uncomfortable part: Our date doesn’t always hold either. Manufacturers postpone deliveries, containers are delayed, a batch fails inspection. I’ve written before about how we’ve committed to dates only for the manufacturer to throw those plans into disarray afterwards – and that still happens. The difference isn’t whether a date gets pushed back, but when you find out about it. With us, you find out as soon as we do. Not on the delivery date, when you have to ask.
And here’s a piece of advice that costs you nothing: For every project tied to a fixed date, tell us the date – not just the quantity. »We need 60 devices« is an order. »We need 60 devices, configured and ready to go on 3 November because that’s when the branch opens« is a project. With a project, we have the opportunity to order earlier, reserve stock or tell you in good time if things are going to be tight. I’ve already written about EOL with advance warning; this is the same principle on a smaller scale: The earlier we talk, the more options we have.
Ultimately, a delivery date is neither a wish nor an estimate, but a commitment that someone else bases their planning on. We’d rather give you a date you don’t like today than one that leaves you having to explain yourself three weeks from now.
So remember: »An early date that doesn’t hold is slower than a later one that does.«