How to get the best from a computer dealer


Computer technology is moving with the velocity of Superman– or a speeding bullet, take your pick–and keeping up with that speed and managing your business at the same time becomes more difficult every year. Businesses with automation in place may be able to hike productivity another notch or two if only they replaced the “XXG’ with an “RTX’, and they would, if only they knew what the “RTX’ would do for them.


  • Those businesses yet to take the first plunge with computers are in an even worse state. For managers of many such companies, the technological mystery of it all is deeper than the Pacific Ocean’s Marianas Trench.
  • In order to provide usable information for both groups of businesses, Inc. Magazine established the Computer Dealer Advisory Panel and invited its first nine members to a seminar in Boston July 26-28 this year.
  • From the brief write-ups of each panel member (next page), you’ll see that two elements are apparent. First, these are businesspeople who have moved by dint of their intelligence and leadership capabilities to the top echelon of the field. Second, together they have a substantial number of years invested in the microcomputer business–years in which hard-won experience has built their knowledge of business community needs.

The advice you read below is coming from these panelists, who are dealers, the people who want to sell you computers. Why listen? For two reasons. First, these nine seminar participants aren’t run-of-the-mill retailers. Each of them was judged by parent organizations on how well they understand and service the needs of their local business communities. They are experts in this field. Second, as experts, their combined experience counts as much, certainly, and probably more than the wisdom offered by many consultants or by computer equipment manufacturers with a single family of products.

If your business is automated in some way and you’re thinking of expanding, or if you sense that computerization can improve your business, you’re right on target. A typical example is that, PressMyAir Co. Ltd, a business reviewing the best air compressor, apply a computer system to automatically scan, compare (product features & prices) among products on different e-stores, then suggest the best option for people to buy. After many years in the computer field, panelist Joe Ingram still says, “I think automation is wonderful, and what it can do for business in incredible. In some cases, we’ve made it possible for companies to increase their productivity by 300%.’

However, the process of keeping up, expanding, or taking that very first step will be smoother if you know how to get the best from your computer dealer.

Choosing The Right Dealer

As in any business, there are good and bad computer dealers. The best are excellent, know their products, know what the products will do, and understand and are willing to fulfill your business needs. They listen. The scale shades down to so-so dealers–people who know products reasonably well, but don’t fully understand your needs. Those at the bottom of the scale, most of whom are locked in price wars with one another, care very little about your needs and may not be in business next week. You’re probably aware that the computer business, at retail, has gone through a shake-up. What you see in your area today are survivors, and a few of them may not be around a year from now.

Choosing the right source becomes a vital business decision. How do you select the organization in today’s market that will deal intelligently and fairly with your business needs, not just today, but for years to come? There are six ways, and the prudent businessperson does well to examine all six.


1. Look for proof of authorization.

When major vendors such as IBM or Apple, authorize a dealer to carry the company’s equipment, the dealer is awarded a medallion that clearly says so. Proud of having earned this authorization, most dealers display the medallions prominently, often with a decal attached to the store window. If you don’t see a medallion, ask about it.

“I don’t believe we’ve educated our clients or the general public regarding the qualifications necessary to offer the products and service we do,’ says panelist Steve Harper. “I don’t think people realize the dues we pay to hang our ‘shingle’–to qualify as an authorized dealer for a vendor. These certifications from vendors, in fact, allow us to become consultants in certain areas.’

  • Lack of a medallion for products on sale by the dealer is the most telling indication that the dealer bought equipment from a secondary source and may not have quick access to parts and peripherals later on.
  • Also, since the major vendors aren’t in the habit of authorizing a borderline dealer, the unauthorized dealer may be a poor business risk. If so, the shop could be gone when you need service.

2. Be wary of lowball pricing.

Open your newspaper to the spate of computer ads that appear at least once a week. It’s a 100-to-one bet that over 85% of them yell “Price!’


“If the price sounds too good to be true, it usually is,’ observes panelist Alan McMillan. “Fire-sale pricing, or “You’ve got to buy today’ means the operation is turning its inventory just to make payroll.’

“You can tell when a store is ready to go belly up,’ Dave McDonough chimes in, “the front end is loaded with price grinders, and the back end is loaded with customers irate about service.’ Buy from such an outlet, and you’re practically guaranteed zero service and zero follow-up.

No one on the panel said clients shouldn’t drive for a good bargain. That’s basic in business, and good dealers expect it. But buying on price alone can be self-defeating.

Consider one client species: the individual who visits a “grade-A’ dealer, listens to a complete outline of the company’s automation needs, takes this fresh equipment list down the street and buys from a “grade D’ dealer for the “lowest prices in town’. When that businessperson runs into a snag, and that will happen, will dealer “D’ help? Not likely.

“I think it’s curious the reputation of microcomputer dealers is so product oriented,’ observes panelist Elayne Kalman. “When you stop and think about it, especially as buying relates to the small business community, what are clients buying? It isn’t hardware and software, although our vendors probably don’t appreciate my saying that. Clients are buying a total solution, a service.’

From another angle, Ingram adds, “In my opinion, we place far too much emphasis on pricing. When implanted correctly, computers don’t cost money. They save money. They save time. And those are the issues vital for the growth of any business.

“Unfortunately, there are companies that are penny wise and pound foolish. Their buying criteria is price. Then, over the long term, they pay an outside consultant to help them figure out what they have and where they’re going.’

In too many cases, the consultant’s fee is considerably more than the margin the company would have paid a high-end dealer, from whom the same or better help is available. “If a business turns to a consultant for help, I would hope they check this person’s credentials in the same way we’re suggesting a check on a dealer,’ adds panelist Poco Sloss. “There are people out there calling themselves consultants who have done little more than turn on a PC while working for someone else.’


One more point: paraphrasing comedian Flip Wilson, “Is what you see what you get?’ Some of the major urban area lowball pricers have been tagged with selling used micros as new. These days, it’s no big deal to shrink-wrap a used CPU and monitor and shove it into a fresh-looking box. Caveat emptor.

3. Ask for a tour.

“If the computer salesperson says, “Oh, sure, we offer training,’ ask to see the training facility,’ advises panelist Dr. Barry Knowles. “If the sales rep assures you there’s a full service department, check to see there is one, plus a spare parts department, plus a van to get equipment to your place of business. These are financial commitments made by the dealer that help insure the longevity of the dealer’s business.’

4. Note the reception you get.

Whether in your office or in the dealer’s store, a salesperson who listens to what your needs really are is the first clue that you’re dealing with a dependable retailer. As Harper wryly puts it, “There’s a difference between the person who asks, “How can I help you?’, or “What solutions are you looking for?’ and the guy who makes sure you brought your checkbook so he can solve some of his cash flow problems.’

On a more serious note, Harper cited the results of a recent trade survey of computer buyers: the number-one reason people buy from a particular source is because they are served by a knowledgeable salesperson.

5. Check outside agencies.

If you’re the least bit skeptical, call the local Better Business Bureau and ask if any complaints have been lodged against the retailer. Use your own judgment when you get the answer. This is a free service.

If you plan to make a major investment, and want to deal with a company that’s going to be there next year, and the next, to help you, you’d benefit from a Dun & Bradstreet report on the firm. The D&B survey is not free.

6. Call on one or two dealer customers.

How well has the retailer treated customers in the past? Does the dealer have a reputation for getting out quickly to help when service is needed? Ask about the dealer’s training capabilities. Is there an introductory course and ongoing training? Have a chat with a dealer customer of at least a year’s standing and learn whether the solutions recommended are working and, above all, what the client’s opinion is of the dealer’s reliability.

Count it as a plus if the dealer makes the first move. “Since we sell business systems most often on the basis of referrals,’ says Knowles, “we don’t hesitate to show them a list of successful installations they can check out.’

Summing up, McMillan said, “If we were all selling at rock-bottom prices out of a warehouse, with no support for the business community, this industry wouldn’t be where it is today. Over the long haul, we will continue to grow because of service rendered by quality dealers.’

Finding The Right Solution

The right computer-based system is the one right for your company– the one that uncorks productivity or smooths out the problem areas. And it is a system right for your company now, not two years or even six months from now. You need equipment to solve today’s problems. If in six months, there is further need, that’s the time to make a change. One of the beauties of microcomputer-based systems is adaptability. Business expansion can usually be handled by adding to your present system, rather than bebinning anew.

“What’s fascinating about the microcomputer industry is its adaptability to growth,’ says Kalman. “With present advances, we can help a small company grow more easily than the mainframe and minicomputer people. At one time, a company bought computer equipment with a certain “firepower’. The company’s growth curve made an upward sweep and then leveled off, at which time the company had to invest in a new batch of “firepower’ to continue growth.’

  • O.K., but what combination of hardware, software and, if needed, peripherals with satisfy your specific business needs? The answer to that question won’t be found in this or any other text. There is no magic combo that instantly lifts productivity in any and all businesses by 150%. This is a customized solution. The solution right for your company will evolve from a meeting between you and the computer salesperson representing the source you’ve chosen carefully.
  • A lot of buyers in the past didn’t believe that. For example, they bought a software program good old Ed recommended at the last Rotary meeting. Once up and running, the program turned out to be either too complicated, or not inclusive enough. Some bought cheap, and relied on manuals to solve their start-up problems. If you haven’t read the average manual, you haven’t experienced the fine art of deciphering Greek. Even the best written manuals at times present a muddy picture. One smart, live support person is worth 20 manuals.

If you apply the six rules listed above for finding a dependable dealer, problems like these (a) probably won’t come up, or (b) if bugs appear, your dealer’s support group will be there to help.

Your first meeting with a good salesperson is going to be interesting for you as well as the dealer. As several panelists stressed, this is a people business, and when you talk to the right person, you’ll experience good vibes.

How Top Dealers React to You

Panelists agreed that system buyers fall into one of three groups: (1) the uninitiated apprehensives; (2) the crash-courses, and (3) the experienced. Then they elaborated on how each group is approached by knowledgeable salespeople. Pick your group and read on:

1. Apprehensives.

“A person with a touch of “computerphobia’ probably has been paging through newspaper ads filled with “Megabyte floppy disc drives, expansion slots and 640K RAM’, and is mystified,’ panelist John Howlett explains. “First, we speak English, not computer tech. Second, we talk to the buyer about terms they do understand–such things as accounts receivable, inventory, marketing.’

Adds Sloss, “We strongly urge our customers to take a four-hour introductory course, free with every computer we sell. The course concentrates on basics–the keyboard, monitor, disc drives and so on. When they leave the course, they aren’t afraid to turn on and use the computer, nor afraid they’re going to wipe out everything they’ve done. Frequently, those who attend ask about bytes, bits, RAM, DOS, etc., and we answer their questions, but we don’t go deeply into terminology.’

2. The crash-coursers.

“People who read every new book on computers and page through every computer trade magazine before touching their first keyboard are perhaps the most difficult to help,’ Sloss remarks. “They’re usually more confused than the person who hasn’t read anything.’

One of Knowles’ specialties is in the field of accounting, and he observes that more than a few small business owners, influenced by current articles on peripherals think they need a mouse, an EGA monitor, a modem and numerous other gadgets. “A small business accounting system is as straightforward as anything you can assemble: a monochrome monitor, some kind of a dot matrix printer and an accounting package. With that, you’re off and running.’

The approach to a crash-courser is careful, politic. “Whether someone is unfamiliar with computers, or has read too much, we have an initial task of establishing credibility by listening,’ declares Kalman. “We have to listen very carefully and encourage the client in areas we know are right, and detour other demands we know aren’t going to work. Our credibility is really raised when we’re willing to say “I don’t think that’s in your best interest’.’

Elaborating, panelist JoAnn Kriger says, “We focus on the end result the client is trying to achieve. Then we study the proposed solution to see if it’s really going to accomplish the goal intended. If a new direction is called for, as tactfully as possible, we guide the client in the right direction.’

3. The experienced.

“We want to take a look at the configuration the client chooses, listen carefully to qualify needs and expertise, and if it all makes sense, then step out of the way and let the client buy what’s on his or her list,’ advises Joe Ingram. “If the list doesn’t make sense, then, as professionals in this field, we have to take responsibility for making alternative recommendations.’

In whatever caregory you fall, you can expect a savvy dealer to spend time learning what your needs are first. In rare few cases, according to Ingram, will a list-carrying customer refuse to talk about needs. When they do, the reason may be a fear of seeming ignorant or it may be a shopping list toted from dealer to dealer for the lowest prices.

“Even if we see that the buyer is truly experienced, we need to check the list against business needs so that this client doesn’t come back three months later and blame us for putting in place a system that doesn’t work,’ adds McDonough.

Anatomy of a Needs Analysis

There are two basic aims of a needs analysis: (1) to discover what specific demands your business requires, and (2) determine how well the dealer can handle the needs.

A small operation needing a package in the $3,000 to $5,000 range may not require a lengthy analysis. A simple, half-hour conversation with an understanding salesperson could satisfy that client. Someone looking for a system to handle a major portion of a good-size corporation almost surely will want to spend some time with the dealer. Assuredly, the dealer wants to spend time with the client. How much time?

Ingram answers, “I think to get a good overview of an average business, an hour should do it. That gives us a basis from which to make further recommendations, perhaps to spend more time on specific areas.’

Agreeing, Kriger adds, “The process is seldom a one-shot deal. The analysis takes time; then our research takes time, and we often go back for a second round to gather more information.’

On the far end of that range, Ingram notes, “We’ve been involved in a number of analyses that took one to two weeks, and we’re involved in one now stretching more than a month. We’ve had to interview and analyze each department of the company.’

In many cases, the analysis consists of your answers to questions on a written form which you and the salesperson review together. Don’t be put off by the form. Forms are developed not from someone’s fertile imagination, but from experience determining business needs. Many are drawn up by parent organizations. In a way, it’s a script–a guide–for the salesperson to follow, and to leave when more relevant questions are triggered by the form.

“The questions we ask are really based on the specific problems the client considers major priorities,’ explains Ingram. “In many cases, for example, we find inventory and receivables a big concern, but it’s our responsibility to prioritize the biggest problems and tackle them first. On the subject of receivables, we’d probably ask what their present system is, where they see problems, and what goals they went to set. This gives us a base to determine what software will glove-fit their needs.’

Does this analysis take place in the dealer’s store or in your place of business? Responding, Sloss says, “If this is a fairly simple deal, the client is usually better off coming to the store. There are no interruptions for the client while he’s at the store and there’s a lot to be said for actual demonstrations.’

“I think either in-store or on-site is appropriate,’ Ingram continues, “providing we can get all the necessary information for the analysis. On the other hand, a lot of times, we find it more advantageous to go on site, perhaps because the designated decisionmaker doesn’t have all the answers or because a closer look at what’s really going on helps clarify needs for us.’

On the bottom line, a needs analysis, to be good, displays the art of listening. We’re presumed the experts,’ says Kalman. “We know what’s available and must react to the person; what does this person need and how can we help him do his job better, whether he’s the front-runner doing the investigation work or the decisionmaker.’

You may wonder about the second goal of a needs analysis. Why wouldn’t a dealer be able to handle your problems? Because no dealer, or value-added reseller (VAR) or value-added dealer (VAD) or consultant can be all things to all people. In a single moderate-size metro area, there may be more than 100 different kinds of businesses, and varying automation requirements within each of the 100.

“We limit the areas in which we specialize,’ Ingram explains. “If we were to specialize in everything, we’d end up specializing in nothing.’ Top-grade dealers clear some of this hurdle by expanding staff, finding outside specialists or relying on expertise flowing from parent organizations.

“We aren’t experts in accounting,’ admits Sloss, “so we struck an alliance with one of the “big-eight’ accounting firms. When a business customer wants an accounting package, we turn over the analysis to the outside firm. Impressed by the expertise offered, the client has no hesitation paying for the analysis, and our credibility in the client’s mind goes up, too. We use consultants in other areas: CAD-CAM, church management, etc.’

Outside a major metro area, Knowles deals with this need for expertise by giving each of five salespeople the responsibility for developing expertise in two vertical areas. “For example,’ he says, “I have one man who calls only on law firms and medical offices. Another concentrates on contractors and manufacturers.’

“We’ve dealt with enough business installations now,’ admits Harper, “to know what we can do and what we’d better pass on. For example, people in the trucking business may come to us and ask for a package that includes tariffs and freight billings with rates for each state. We don’t have the expertise for that, and we say so.’

Any good dealer, including Harper, will pass along a customer to an expert who does have the know-how to handle a specific problem. Whatever your needs, if you head for a high-end dealer in the first place, you’ll get help.

Software-Hardware Choices

A simple accounting package is not so simple to find, even though accounts receivable is accounts receivable, whether you turn out custom hand tools or bake bread. The question is: What do you want to do with the information on accounts?

Your dealer of choice, after a thorough needs analysis, commands two banks of information: knowledge of your business and the areas that call for better productivity, as well as knowledge of what available software has the power to accomplish.

Kalman elaborates, “Certainly a wholesale business has different accounting requirements than a retail operation. Therefore, even though accounting is generally considered a horizontal program (i.e. one applicable across the board, as opposed to a vertical package designed only for a slice like dental records), if we understand how the client’s business flows, where the pressure points are, and what types of problems they face, then we can recommend a specific level of package, with features and benefits that fit that business.

“And while we’re at it, we want to consider the client’s needs for growth, but without innundating the business with equipment. There’s an equipment cut-off point that will allow the business to grow.

“Today, using micro equipment, the growth curves are much more in line with actual experience. A company can add to a system piecemeal at far less cost than in the past. In fact, that’s really the reason small companies have been able to jump into automation, where before they couldn’t afford those big jumps in equipment purchases. And that first jump used to be the biggest.’

Many new buyers are still edgy about the first purchase. And many are mesmerized by the hardware advertising bombardment in the media. As a result, dealers often hear a request for specific hardware before needs are ever mentioned. If you fall into that category, you’re attention will probably be redirected, tactfully, to software first.

“Software provides the solution,’ Harper says. “Software is the means to set the client’s expectation level. That’s where the heaviest portion of training is going to take place, and it’s the part, we, as knowledgeable dealers, must configure into the system.’

Ingram seconded the point and added, “I think everyone on the panel can tell a story about a businessperson who came in and bought hardware first. Later, when the client came back to explore ways to fulfill a need, we discovered that the software perfectly suited for the company called for a combination of hardware the client didn’t have.

“I think it’s very important for the client, especially first-time buyers, to address their software needs up front, and only then take a look at hardware.’

On the other hand, software programs have proliferated to a point where no single salesperson could possibly know the contents of every package. In fact, rare few people today could have tried and evaluated every word processing program, much less every program. As a result, you can’t expect a salesperson, even the best of them, to have working knowledge of every accounting or inventory control package. As McMillan noted, on their price list alone there are 3,500 items and that doesn’t include everything available in the market by quite a margin.

“Our salespeople can probably provide a review of all the desktop publishing programs while the concept is still in its infancy,’ Sloss says. “But I wouldn’t expect them to know every one of the older programs.’

“In the area of vertical programs,’ Kriger adds, “it’s important we know the key products on the market, whether we sell them or not. Otherwise, we wouldn’t be able to compare features and benefits for the customer.’

How much credence can you put on media reviews of software? Ask yourself how much consistency you find in media reviews of films and plays. Ingram comments: “I can honestly say that for every good review I’ve read of a software package or hardware product, I’ll find one that has a bad word for the same product. There’s no question this causes confusion.’

“When you come down to the bottom line, the software we sell is driven by client demand,’ observes McMillan. “Customers make a package popular. And I’d say that programs that have proven popular in the marketplace are the safest for a business to use, because (a) it’s worked well for similar companies, and (b) the people selling the product are going to be around to provide support.’

That still may not satisfy your need if you’ve heard of an esoteric program and want to find out more about it.

“I think we panel members are able to help a client through to some clear thinking,’ Ingram says. “Fortunately, we’re all affiliated with organizations that have research and development people who do nothing but specialize in hands-on reviews of software and hardware coming on the market. They stay on what we call the bleeding edge of this technology, trying to figure out what’s good and what isn’t.’

  • Software chains are turning up outside the major metro areas now. Many offer deep discounts. There is a temptation certainly to learn as much as possible about a popular package from a good dealer; then buy it from a chain for less. If you never intend to ask a question about the program, fine. But should you need support later, it’s unlikely you’ll get it from the discounter.
  • Your business may require more than basic hardware and a couple of software packages. Those extra requirements will unfold during the needs analysis.

Howlett explains, “During the process of finding out what the client wants to accomplish, we’ll discuss printers, for example. Would the business call for a letter quality or dot matrix printer, or perhaps one that offers both. Is networking or connectivity needed, or does it make more sense for the micros to stand alone.’

In short, especially for first-time buyers, it pays to wait until the needs analysis is completed before asking for peripherals. Two reasons: (1) you’ll save money not buying what you really don’t need at present, and (2) by the time your business has expanded to the point where you need a peripheral (like a modem), the technology also will have advanced to make what you buy more efficient.

Facts on Financing

With a smile, Harper says, “We like to offer our customers a choice. We ask them, “Which do you prefer, cash or C.O.D.?’

“Actually, if the customer pays in full at the time the purchase order is signed, we give them a 1% discount. We also offer bank financing and leasing. The leasing alternative shows a monthly payment that is often more palatable than the sticker price or a negotiated amount.’

Like most other dealers, Harper offers a plan that puts a portion of the lease payments toward purchase if the customer later decides to buy.

“I’ve found,’ adds Kalman, “that a number of small businesses don’t qualify for enough credit to handle the purchase. But the president or CEO qualifies for credit personally, and the sale goes through on a personal credit card. That’s an option buyers should keep in mind.’

It’s fair to say that if your company proves a good credit risk, there is always a way to arrange for funds. Depending on the size and stability of your company, dealers will often open a line of credit for you.

Is the price negotiable? Yes. Probably on about the same basis it is for the products or services you sell: buying in volume generally commands a discount. Realistically, the discounting picture in the computer field isn’t perfectly clear at present.

“There’s a certain mindset among buyers and dealers now. It’s a lot like the attitude about buying a new car. No one pays the full sticker price for a car,’ Ingram comments. “Buyers feel the same way about buying computers, and we have to deal with that. In our own case, we seriously consider discounts on volume purchases at the $250,000-and-up break. On the other hand, we want to make a sale as eagerly as the next dealer. If a cash buyer is in the market for five or six computers, we’re willing to bend.’

That’s one company. Panelists agreed with McMillan when he said, “If the nine of us sat here and tried to write a discount policy tied to volume, we’d be in a deadlock from the time we started to the time we gave up. It’s a subject that really is decided on a case-by-case basis. So much has to do with the client’s history and the amount of support that client wants. Many clients recognize the need for extra support and prefer us to layer in the support rather than more discount. Then there are some clients who want the boxes dropped on their dock and that’s the end of it. As I say, it’s a case-by-case decision.’

Getting Dependable Support

Without instruction, few untutored people could assemble a house if its approximately 2,300 parts were dumped on a lot. For the novice computer buyer, the prospect of operating the machine perfectly seems just as remote at first. This becomes all the more apparent when beginners realize that long-time users also run into snags and require help.

Support for users has been mentioned several times by panelists. There are three fundamental parts of dealer support: training, follow-up help and service. Most buyers need all three at some point.

Vital Ingredient: Training

User fear among first-time buyers is a perfectly understandable emotion, although wasted. From every well-established dealer, training programs are offered for the novice, the journeyman and the expert. As mentioned earlier, many of the initial sessions are free with the purchase of the equipment. However, you should expect to pay for structured classes beyond the first session, just as you would for college extension courses.

“Training is probably the most important aspect of buying a computer system,’ contends Knowles. “Every businessperson knows that anything of value doesn’t come for Training takes time, manpower and experience. That’s why we charge for it.’

In addition, many dealers hold ongoing seminars, usually free and usually during breakfast, lunch or after 5 PM to accommodate customers (and prospects). These are informal, and often take question-and-answer form. The subjects range widely–connectivity, accounting, inventory. Most are overviews of subjects. The real nuts and bolts are presented in classes. Training by the firm that sold you the system makes a lot of sense.

“Training and support services go together,’ Kalman observes. “It’s sort of like one-stop shopping. Instead of buying hardware in one shop, software somewhere else, and then taking a college extension course two nights a week to learn the system, the client can lean on us to help put it all together.’

“In fact,’ adds McMillan, “I’d tell a new user not to buy a computer unless he or she is willing to invest in training. Otherwise, trying to use the system will only lead to frustration, and an incredible amount of lost productivity going through the manuals and trying to learn from tutorial discs.

“I’d even suggest that a novice spend a modest sum and take one of the basic “Meet your PC’ courses before they buy. Like many others, we offer a beginning level course, an intermediate level course and an advanced level course. Each course takes four hours. After completing an advanced course, for example, a user is really able to exploit the power of the system and software.’

Most businesses with under ten employees are hurt when several employees are away for any length of time. It’s natural for the owner of such a firm to be concerned about giving over personnel for computer training.

Addressing that problem, Howlett says, “In about 95% of the cases, we’re able to convince the customer that their people will be more productive far more rapidly if they take the training.

“I think the best example I can think of has to do with CAD software, for which we offer four days of training. Pulling a draftsman off the boards for four days tends to put a small architectural firm in a bind. But when the administrative partner realizes that after spending $50,000 or $60,000 for a CAD system, it may be three to six months, without training, before the draftsman gets up to speed, and only four days with training, the wisdom of training shows up pretty clearly.’

Here are responses to other questions about training for new users and companies with a system in place:

Will trainers come to your place of business? Yes. “Many customers prefer their training be done on site,’ says Harper. “They want to learn on the equipment in place, using the materials and documents that ordinarily generate the company’s business. We accomodate them because we understand that’s where their employees feel most comfortable.

“In addition, if a trainee leaves the company within 90 days, we retrain their replacement at no charge. We find this helps ease a manager’s mind about releasing employees for training, even though very few employees actually leave during that period.’

Ought training be limited to employees responsible for operating the system? Each manager makes that decision based on need, the size and complexity of the system and internal security. Generally, as McMillan says, “The more individuals in a company that know how to use the equipment, the more certain a manager is that increased productivity made possible by the system will continue uninterrupted. In that sense, training becomes a small fraction of the total cost.’

Is it necessary for training to continue after employees learns the basics? “Training’ may not be the right word. “Debugging’ or “follow-up’ or “trouble-shooting’ is probably more appropriate.

“We know a user’s questions aren’t going to end when the course ends,’ says Knowles. “For a small charge, we offer telephone support on an ongoing basis. We have two people full time with headsets sitting in front of computers answering questions over the phone. It’s really a continual training process.’ Many of the telephone-support programs are tied to an 800 phone number. Some carry this kind of contact one step further. “We’re able to dial into the customer’s computer,’ explains McDonough. “That way, we can go in and look at what they’re doing, and dialogues with the user are much more productive.’

“Training is going to continue,’ adds Kriger, “because the technology is unfolding at a very rapid pace, and because, at present, a lot of businesses are concerned that they’re underutilizing their equipment.’

Suppose you want to set up an internal training program? Many dealers will help. “Since it’s expensive to keep a training room with a half-dozen machines in it, we offer companies the option of renting our training room,’ explains McMillan. “Or, we can sell our curriculum to a corporation and train their trainer, so the whole process can be handled by the company on site.’

Are there more avenues for learning? Yes. One uses an older technology, television. Both McMillan and Sloss described a large-screen TV set-up. This makes use of one-way television and two-way audio. “Clients can watch the latest new product unveiled on screen by a vendor senior manager, and then ask questions on line with the manager,’ McMillan explains.

This system helps buyers indirectly, as well. Dealer trainers, technicians and sales personnel all make use of television training to learn the latest. By keeping up to speed on new developments, these people are better prepared to help clients.

Everyone has the opportunity to learn at computer trade shows. One franchiser holds its own trade shows, open to dealer clients and the public. “We run one annually,’ reports McDonough, “in about seven or eight major cities. Each show runs for three days, and during the most recent one in California, we held 24 seminars on a wide variety of educational subjects.’

McMillan reports, “We have begun a series of technological conferences. We’ve had three of them this year. We invite leaders from the computer industry to speak to our clients and the general public on just exactly where the industry is going.’

The Heart of Support

It’s 4 o’clock in the afternoon. You are committed to mailing a financial report by ak PM–a report you’re frantically trying to complete on a PC. Suddenly, the monitor screen fills with “1’s’ and “0’s’, and you hear a disturbing noise coming from the CPU innards. You feel compelled to turn off the machine before it aborts.

What’s the next step?

The next step is to pick up the phone and call your support. If you can’t reach anyone, you have good reason to panic. And here’s the rub: if you haven’t purchased your equipment and software from a reliable dealer, you very well may not reach anyone. But if you did buy from the kind of dealer described throughout this report, you’ll call the person who can help and it’s likely you’ll have your machine up again in time to finish the financial report.

“To provide ongoing help for our clients,’ Knowles reports, “last summer we hired what we call a “customer satisfaction representative’. She’s on the phone all day with a headset, computer and database. She’s charged with phoning a client a week or so after the purchase of a system to find out how everything is going, and if there is anything else needed. The program has been very successful.’ Expect similar follow-ups from other good dealers, although not necessarily from a specialized employee. It may come from the sales rep or the manager.

But not always. “If my salesperson is worthwhile, he won’t be there to accept a call,’ explains Ingram. “He’ll be out in the field selling. But we have a support structure in place. If the problem involves service, the client is given our service department. If it’s a software glitch, then our software folks are put on the line. These are the people trained to help the client best.

“I think I can speak for everyone on the panel when I say that customer satisfaction is our number-one concern in this business. I mean, that’s where our future business lies. Industry figures prove that the average person who buys one computer for business will be back in 15 months for a second unit. We want that business, and the only way we’re going to keep it is by being there when we’re needed.’

“What we’ve been describing about support is kind of utopian when you take a close look at all the dealers out there,’ says Harper. “I think when a customer chooses a dealer, it’s important, of course, to select the products that are right for that businesses. But then the client should take a close look at support and service. A good many dealers say, “Yes, we offer service.’ But if the dealer is trying to satisfy 7,000 customers and has only one technician on staff, that isn’t going to help the customer very much.’

Finally, seek out a dealer who has strengths in the areas you need. “We have to concentrate,’ McDonough says. “If we can’t handle a construction package, for example, and support it later, then our best course is to direct the customer to a dealer who can help in that area.’

“Doing so, I think, helps build your credibility with the client,’ adds McMillan. “If we sell something we can’t support well, it certainly doesn’t enhance our reputation. In fact, there’s just no good business reason for doing it.’

Signing Service Contracts

Warranties for almost all new computer-related equipment cover the cost of labor and parts. “In most cases,’ explains panelist John Howlett, “this holds true as long as you bring the equipment back to us. Many companies want on-site service, and because we don’t get reimbursed for travel time by the manufacturers, we do charge for that.

“Some peripheral manufacturers don’t reimburse us for the time and materials to return a product to the factory when that’s necessary. We pass on that kind of small charge to the client.’

Many vendors protect their products for 90 days after purchase, and some now carry you through the first year and a few even for two years. When a product has passed beyond the warrenty period, most buyers find it cost effective to buy a service contract. “In a very real sense, the service agreement is an insurance policy,’ says Ingram.

“The annual glitch rate on the average computer,’ Ingram continues, “is about three, which means that some equipment will require zero service for 12 months and a few may need repairs 15 times a year. The service agreement protects you against the rare liklihood of a major component in the system going out.’

A service contract is generally written for one year, but in many cases, the service or maintenance agreement is made flexible to suit purchase of equipment and peripherals with warranties of varying lengths.

“If one item carried a 90-day warranty, another is warranteed for one year, and a third for two years,’ Kriger explains, “we would sell the buyer a maintenance contract beginning at the 90-day period and running through two years, filling in the coverage as each unit goes off warranty.’

There are always some firms that turn down the opportunity to buy a service agreement. They bet on not being stuck with a glitch. Knowles advises, “We tell customers who don’t want a service contract that we operate on a first-come, first-serve basis, behind those clients who have a service agreement. The contract-holders have priority over anyone waiting in line, and also have first call on loaners to keep their office work functioning during the time their equipment is down.’

One of the questions you’d do well to ask a dealer’s past customer is “How fast does the serviceperson come to fix your equipment?’ That a dealer offers service is fine, but if it takes a week or two for anyone to repair your equipment problem, then it isn’t so fine. Here’s how one of the panelists, John Howlett, handles calls for help. “Our commitment is to call back within four hours. Frequently, the problem is minor and we can talk the client through to a solution over the phone. If the problem is larger, we guarantee we’ll be on site within 24 hours.

“For example, if their accounting system is down or they’re on network, we’re going to turn mountains to get out there. We try to bring along loaners that are compatible with what they have so there won’t be a personnel tie-up trying to learn the idiosyncracies of new equipment.’

Natural Growth For Your Company

The end result of turning out more products or services next year within the same time frame as this year is an accumulated gross income that is almost surely going to be higher. (Whether net is higher may depend on the accounting software you choose!). That’s the simple equation for the kind of productivity a computer system can deliver.

As much as you want this to happen, so does the knowledgeable dealer. As you grow, so does the dealer. In some ways, both of you form a partnership. The equipment today is remarkable, faster, easier and more fun to use, smaller and, gradually, less costly. But the link between you and these amazing machines and programs is the educated dealer, the man and his staff who can smooth out the kinks in the link, and make the growth you’ve been seeking, happen.


These are the qualifications Inc. established for membership on its Computer Dealer Advisory Panel: in business for a minimum of two years; annual sales of over $500,000; hands-on expertise helping small companies and corporations make their first EDP acquisition, and personal interest in helping these same companies grow. Each panelist surpassed the criteria by quite a margin, a as you’ll see below.

Joe Ingram is Market General Manager of Bell Atlantic/CompuShop in Phoenix, Ariz., with branches in Phoenix, Tucson and Tempe. With extensive experience in vertical marketing and network applications, Ingram was formerly a regional manager for MicroAge.

  • Dr. Barry Knowles is Owner and General Manager of ValCom Computer Center of Harrisonburg in Harrisonburg, Va. Covering a large rural /suburban territory, the company has annual revenues of $1.3 million and has been in business for three years. Knowles has a doctorate in psychology.
  • Dave McDonough is Co-Owner of ComputerLand of San Diego, Inc., with branches in San Diego and Los Angeles. In business for 10 years, the operation has revenues annually of $50 million in the busy SouthernCalifornia market.

Elayne Kalman is Chief Executive Officer of MicroAge Computer Stores in Milwaukee. In business for six years, the Milwaukee franchise is the oldest in the MilcroAge network, and averages annual revenues of more than $2.5 million.

JoAnn Kriger is Northeast Regional Manager for Sears Business Systems Centers. With Sears for 16 years, most recently she was operations manager of computer training at the Sears home office in Chicago.

Steve Harper is Owner/Manager of the Entre Computer Center in Wichita, Kan., with branches in Springfield and Kansas City, Mo. His operation has been in business for nearly four years and shows annual revenues of $8 million. Prior to his present post, Harper spent nine years in commercial banking.

Poco Sloss is President to Bellweather Technology Corp., based in New Orleans, La. Bellweather Technology owns and operates 12 ComputerLand stores in the New Orleans area. In business for seven years, the operation presently has annual revenues of $18 million.

John Howlett is the Owner/Manager of the Entre Computer Center in Westfield, N.J. In business for four years, this completely computerized center has annual revenues of $3.7 million. Prior to his Entre association, Howlett was with AT&T for 12 years.

Alan J. McMillan is District Manager for Businessland, operating from Needham, Mass. He is responsible for three Boston Centers, plus sales offices in Philadelphia and New York. Prior to holding his present post, McMillan was General Manager of one of the highest revenue centers in the entire Businessland chain.

Only in California: Sprint PCS’s ‘Hey’ dudes took L.A. by storm

This is the story of an advertising campaign that was so successful, it turned a regional service launch into hoopla only Los Angeles could handle. The moral? Know your audience.


What started as a few radio spots featuring two Generation X slackers-meant to introduce Southern Californians to Sprint PCS service last November-turned into a 10-month series of 90 spots. Radio talk shows and competitors’ commercials spoofed the ads. Students wrote term papers about how the characters relate to society. Sprint received daily fan mail. Radio listeners called each other and imitated the characters, who themselves had become local celebrities. And most important, they ordered Sprint PCS service.

“We were remarkably successful in marketing brand awareness,” said a Sprint spokeswoman, who still receives voice mail messages from people imitating the characters.

It’s not hard to do. The 60-second spots all start with the slow, jazzy bass and drum of Beat poetry readings. A phone rings. Dude One says, “Hey.” After a long pause, Dude Two says, “Hey.” Then plots run from an over-the-phone game of rock-paper-scissors, to conversations with girlfriends, to a spot where One gets extremely annoyed by Two’s insistence on speaking in Spanish.

“The premise behind it was that with Sprint PCS, you felt like you could talk forever on your phone,” the spokeswoman said.

  • Of course all good things must come to an end, and a la “M*A*S*H” and “Seinfeld,” Sprint PCS had a grand finale while the campaign was at the height of its popularity, the spokeswoman said.
  • First, in August, there was a sendoff party at the Virgin Megastore on Sunset Boulevard. Two hundred fans showed up to see the “dudes,” who had been set up in a slacker-apartment styled store window.
  • Mark Sweeney, who wrote the spots for ad agency Hal Riney & Partners, also donated his voice to be Dude One. He was amazed at how the attention at the sendoff party quickly turned him into a ham. “Never in a million years did I expect that kind of response,” he said.

Then, following the party, the dudes met their demise on-air. One choked on a burrito and went to heaven. After seeing that the afterlife consisted of a never-ending burrito and a couch, he suggested that his friend might enjoy it there. Two was promptly hit by a cement truck.


“That’s just how they had to die,” said Sweeney, who until then had been getting his ideas from conversations with friends.

He believes that the campaign could work nationally, but Sprint believes the ads were successful because they perfectly suited the California market, the spokeswoman said.

“The market there always tests differently,” said Debra McMahon, vice president of Mercer Management Consulting. “It’s a climate where edgier commercials tend to do better.”

Sprint had originally been targeting a younger, Gen X-type audience, but it eventually had a much wider appeal, the spokeswoman said. There is a desire among carriers to encourage people of that age group to use wireless phones as their only phones, so Sprint’s target audience makes a lot of sense, McMahon said.

As for the style of the ads, McMahon said humor in advertising is always tricky. “When it’s successful, it’s fabulously successful. When it’s not successful, it means people just didn’t get it.”

Hey. Guess they got it.

Few exhibitors or buyers create weak West Coast expo

Apparently somebody forgot to tell much of the golf industry the PGA Fall Expo was going to be held Aug. 5-7 in San Diego. Reed Exhibitions moved the fall expo to San Diego to lure the large number of local equipment companies, but the lone San Diego-area equipment exhibitors were Callaway Golf and Sonartec. And buyers were few and far between, said exhibitors.


“We weren’t expecting a huge amount of traffic, but we would have liked to have seen more traffic than we did,” said Callaway’s Larry Dorman, VP of global press and public relations.” But we know that’s out of Reed’s control. The economy is one reason, plus not a lot of companies have the excess cash to spend on the fall expo.”

Chris McCabe, Reed’s VP and show manager, took a positive perspective. The show, he said, was “a nice continued transition from the past.” He said the 41 education sessions were well attended, as was the inaugural evening demo day/BBQ held at the nearby Riverwalk GC, where between 400 and 500 buyers and industry types tested the products of 19 companies, including Callaway, Nike Golf and Wilson. The latter two did not exhibit.

McCabe did acknowledge the show reflects the current state of the golf industry. “It’s not 1998 or 1999,” he said. The 351 exhibitors–25 more than last year–were less than half of the 700-plus companies that once exhibited.

  • Equipment companies seem to want one show per year. And since spring is the season for golf wear, apparel vendors want a prime-selling August show to work. San Diego did not work, said apparel exhibitors, who suggest January’s PGA Merchandise Show remain as is, while replacing the fall expo with mini regional shows like the successful ones in Phoenix, West Palm Beach and Portland, Ore.


  • Burberry and Tommy Bahama were among the few apparel vendors exhibiting, many of whom said they traveled to San Diego hoping to recoup costs and to break into the Ashworth-dominated Southern California market. One executive said he sat in his booth and waited for two-hour stretches for a buyer to walk down his aisle. Attendance figures were not available at press time.

Reed expects to be back in San Diego next year for the July 29-31 fall expo, but, as always, it will survey exhibitors first. “We will stick it out, have reasonable goals and continue to invest and promote until it doesn’t make sense,” McCabe said.

Second issue of magazine to keep Sony in ‘style.’


In an effort to ensure that target audiences can’t escape the message of new music products, record labels have recently tried eliminating the middle man by flat-out purchasing and producing media vehicles of their own. Prime examples are the commercial-free “Arista Gallery of Stars 1993,” which aired on late-night television last winter, and the Columbia Radio Hour, heard on nearly 100 stations each month (Billboard, Nov. 28, 1992).


  • The clutter-free environment idea continues to spread, with Sony’s consumer electronics division going the prepackaged route. The company plans to publish a follow-up to last spring’s Sony Style, a glossy, 312-page magazine that cataloged Sony’s electronics lineup. The second, Fall/Winter Sony Style, due out in mid-September, will emphasize home electronics, whereas the debut issue played up the joys of portable sight and sound.
  • Half a million copies of the original Sony Style were printed and distributed at newsstands (primarily at hotels and airports), at electronic retailers, and through an 800 number that appears in Sony print advertising.

A Sony spokesman says sales figures for the magazine are not yet available. Richard Johnson, director of Sony advertising for the consumer product group, guesses at least 150,000 copies have been sold to date. Sony Style goes for $4.95, with an additional $1.50 for shipping and handling. The magazine–put together in 55 days, once it got the green light–was a product of Sony, its ad agency Leo Burnett, and Hachette Custom Publishing.

  • Johnson says the magazine is designed to bolster Sony’s national ad campaign, which works to get people into stores and asking questions about products. But what that piecemeal approach cannot do, says Johnson, “is expose the breadth of the product line offered.”
  • Sony Style certainly does that. With its J. Crew-like photo spreads of fashionable young people using wishlist items (4-inch TV sets for the backseats of cars), Sony Style makes even remote controls look exciting.

Conspicuously absent from the magazine are any prices. Johnson says that was a deliberate move. “It’s not a catalog,” he explains, noting that nothing can be ordered through Sony Style. (Although strictly a Sony electronics venture, ads for Columbia House Record Club and Columbia and Epic MiniDisc titles are scattered throughout. And yes, the MiniDisc is the first product featured in the “editorial” pages of Sony Style.)


The question of who would buy a company’s well-photographed product lineup, especially on the newsstand, does linger, though. After all, people that interested in consumer electronics are usually the ones who send away for free color brochures.

Sony’s Johnson says the company has not formulated a “master plan” in terms of newsstand distribution, and says whatever works best (newsstand or not), will be used in the future. He guesses in the end, the 800 number will be responsible for 60% of Sony Style sales.

Suppliers expand product offerings as more merchandisers go ‘natural’

U.S. and Western European consumer demand for personal care .products based on natural ingredients is posting double-digit growth and is expected to reach about $7 billion by 2012, says a recent study by Kline & Co. (Little Falls, NI). In response, there has been an increase in the number and types of retailers that now carry these products, Kline says. Suppliers, including Vertellus Performance Materials (Greensboro, NC), are also responding by increasing investments in natural ingredients.


“For a long time, natural products have been the domain of health and organic food stores–niche retailers with a core group of loyal customers,” says Karen Doskow, project manager/consumer products at Kline. “Naturals are now becoming commonplace in the aisles of national chain grocery and discount stores,” including Wal-Mart and Target, Doskow says. “This will have a major impact on the competitive landscape of the personal care market,” she adds. Formulator sales in the U.S. and Western Europe account for $3.8 billion this year, up 13.5% from 2006, Kline says. Products that contain a high quantity of natural ingredients account for 49% of market sales, it says.

“Natural products have become a key element of marketing strategies in the cosmetic and toiletry industry as producers seek to impress consumers with the performance, quality, and uniqueness of their products, and to assuage concerns about product mildness and safety,” says The Freedonia Group (Cleveland) (chart). Demand for natural products will be led by proteins, plant acids, and enzymes, and herbal extracts. However, “further gains will be limited by the propensity of some formulators to include only minor amounts of these materials in their products in order to be able to list them on the label and derive marketing benefits, rather than an amount sufficient to make them truly effective product additives,” Freedonia says.


Still, suppliers say they are meeting demand via M&A and/or expansions. Recent deals include Frutarom Industries’s (Haifa, Israel) acquisition of RAn Natural Technologies (Petah Tikva, Israel), a producer of natural plant extracts with anti-oxidant properties for use in cosmetic applications.

Symrise is expanding its range of natural active ingredients for cosmetics under a new product line, Actipone. The line includes ingredients such as herbal extracts, fruit concentrates, tea and coffee extracts, marine plants, and root and flower extracts used in a number of cosmetic products.

  • Vertellus Performance Materials, a Vertellus Specialties subsidiary, has opened a new state-of-the-art shea butter and derivatives refinery and manufacturing plant at Greensboro.
  • The facility uses the company’s proprietary manufacturing process to produce 100% vegetable oil-based emollients for cosmetic and pharmaceutical applications.
  • Goldschmidt Chemical, a subsidiary of Evonik Degussa, introduced an all-natural, milk-and-sugar-based emulsifier designed for facial, body, and baby care cosmetic applications earlier this year.

Privately held flavor and fragrance manufacturer FFG Industries (FFG; Upper Saddle River, NJ) and its six flavor and fragrance operating companies recently merged to form a new company, Agilex Flavors & Fragrances. Agilex will be roughly split 50-50 between flavors and fragrances, with the fragrance division focusing on several applications, including candles and personal care products (CW, Nov. 14, p. 26).

Meanwhile, the downstream market is also expected to continue to consolidate. The shift to mass retail could help promote a “revival of sorts” among long-established yet less-recognized natural product companies, however, it also makes these smaller players prime candidates for acquisition by major firms in the personal care market, Kline says. “These small natural companies could pose a threat to the major consumer productmarketers, but rather than try to compete with each other, it’s likely we will see strategic acquisitions,” Doskow says.

Deals include Clorox’s recent agreement to purchase natural personal care products manufacturer Burt’s Bees (Durham, NC) for $925 million in cash (CW, Nov. 14, p. 6). Privately owned Burt’s Bees reported estimated 2007 sales of about $170 million. The acquisition, which is expected to close by year-end, will provide Burt’s Bees with a wider distribution network and secure Clorox’s position in the fast-growing, higher-margin, consumer-productcategories, analysts say.

  • Meanwhile, labeling of natural products could pose a challenge for both suppliers and producers in the personal care industry. “While producers are required to list the ingredients in their products in descending order of prominence, some companies have been getting around this by diluting materials, such as plant and flower extracts, yet counting the entire volume as extract,” Freedonia says. This allows the formulator to list a high-profile, consumer-desired product higher on the list of ingredients, even though, in reality, the concentration of extract is “so small as to be ineffectual,” it says.
  • Another issue in the news recently is the clearing of tropical peat swamps in Indonesia for the cultivation of palm oil trees. Both Unilever and Procter & Gamble, among others, have been linked to this issue, according to a recent report by Greenpeace (Washington). The natural ingredient palm oil is used in an array of personal care products, including soaps, shampoos, and deodorants.


Peat swamps are considered by scientists to be one of the greatest stores of carbon worldwide, Greenpeace says. Clearing the Indonesian wetlands releases 1.8 billion m.t./year of carbon dioxide to the atmosphere, it says.


2010 total: $1 billion

Botanical extracts   67.8%
Proteins             10.6%
Sorbitol             10.1%
Other                11.5%

Note: Table made from pie chart.

* Estimated natural products demand in cosmetics and toiletries by

Source: The Freedonia Group (Cleveland).