Understanding the Difference Between Price and Value

Elizabeth Sparrow, Sales and Marketing Director at O-bit Telecom, has told Comms Business Magazine, “The word distribution in itself is quite limiting as it suggests the purchasing of bulk solutions to sell on at a slight margin to another party to service wrap.

For many ‘distribution’ is not synonymous with added value and implies a ‘pile high, sell cheap’ mentality. However, industry demands dictate that value adds are a must for many end-users and price alone is not a recipe for success. It is vital that distributors understand the relationship between offering competitive prices to allow resellers to be profitable but also to offer them a differentiator to their competition. We position ourselves in the channel to assist our resellers with how they make that product wrap and therefore take the focus away from just price alone. It is important to successfully identify which solutions fit effectively with each other to complement the wider portfolio. Therefore, while O-bit is a distributor, our approach lies within the consultancy arena in terms of helping and assisting resellers in taking their solution to market in a profitable and efficient manner.

“O-bit is extremely focussed on improving reseller margin and part of this strategy has seen us diversify out from the traditional lines and calls into a more data centric, managed services arena where higher margin opportunities lie. The fact that data goes hand in hand with solutions such as hosting and cloud computing also allows us to wrap the products in a package that helps resellers present multiple solutions to each client and hence improve their loyalty.

“Loyalty can be established by the type of contract resellers propose to their client. Calls and lines traditionally tie an end user down for 12 months but data services provide three and five year contracts. If a reseller secures a five year contract for data services, a contract for calls and lines is unlikely to get split for that period. There is also a strong chance of extending that contract beyond five years if the reseller is supporting the client and maintaining a good relationship.

“Distributor run training events are another method of adding value for the reseller. We often find that resellers who have traditionally sold voice are understandably quite nervous about extending their service to data as their understanding of it is limited. Our monthly reseller forums are used as a platform for our Product Specialists to launch new services, explain exactly how the products work and what marketing techniques they can use to take that solution to market.

“Another value added service popular with resellers is for distributors to co-assist resellers at end user meetings. We find that by allowing resellers to watch our sales people, listen to the types of questions users are asking and take note of the answers, they soon feel confident enough to adopt new products into their existing portfolio.

“Ultimately, it is not just about adding margin to products and sending them to the market place. Resellers should receive guidance with sales support and marketing collateral in order to help them market products and target the right clients in an efficient manner. At O-bit we white label all our services and provide an instant reseller product sheet branding service so that resellers can not only educate their customer base but promote their own brand at the same time.”

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