"The future for IT is anything but clear as the last year has proved for many hardware vendors," says Gary De Menezes, CRM and e-commerce director for Compaq Computer in SA. De Menezes also looks after Compaq`s local channel operations.
"A worldwide slow down in sales has forced many computer manufacturers to look for new market opportunities and devise new ways of retaining existing customers. Compaq has always been a leading hardware vendor, but the market is moving away from a box dropping to approach to a true solutions approach and Compaq SA has very aggressive business models to ensure that we become a trusted IT advisor to our customers and are able to provide solutions to the market.
"Compaq`s approach is certainly unique to the industry. This sales model, which enhances our existing models, has been designed to bring customers closer to Compaq as a company, as well as the brand, while at the same time maintaining and building the relationships we have with our business partners.
"Vendors have traditionally taken either a channel-less direct sales approach, or relied on a top-down approach which forced their sales channel to exist as a customer interface as well. The biggest problem with this model is that it does not contribute much in the way of creating brand loyalty and also leaves many additional opportunities for sales unexplored.
"Compaq has recognised the value of customer relationship management (CRM) and e-commerce as major driving forces behind improving sales and retaining customers. However, these disciplines have to be employed intelligently if a company is to derive any tangible benefits from them. To this end, we have developed a sales model which is not only `push through` but also `pull through`, creating opportunities for the channel where they may not necessarily be aware of them. Compaq`s leading-edge customer contact and call centre operation at our Sandton headquarters is equipped to provide high-end relationship management using Siebel technology.
"We are able to manage effectively the sale cycle from creating the lead and pre-sales support to order, manufacture and delivery. This provides the customer with a single interface when dealing with Compaq, allowing them instant access to any information relating to their purchase. At the same time, we are able to generate profiles of customers, determine trends and buying patterns and pass this data onto our channel for their sales and support initiatives.
"The initial reaction by our channel to our initiative was scepticism which was understandable. However, we quickly proved that we were not out to compete with them, but rather, we were providing an extension to their marketing efforts.
"This was reinforced by our customers positive reaction to the opportunity to get closer to the vendor. This approach is unique to the IT industry as vendors which maintain call centres operate them on a reactive basis, taking calls from customers while ignoring the benefits of building a relationship with them.
"Our CRM staff are more than glorified telesales people. We employ 55 CRM agents split regionally into services and sales. Each agent is aligned to specific customers and have developed a close relationship with them. This "cell" methodology, where teams of Compaq personnel serve each client, ensures that no matter when a customer calls, there will always be someone available who fully understands their business needs and can deal effectively with their requirements.
"One of the main reasons for Compaq taking this route is to better serve the small to medium enterprise market. Assigning teams of product specialists, sales engineers and technical people to large enterprise clients is expensive but the economics of scale involved more than justify this approach. However, in the SME market, these costs become prohibitively expensive, forcing vendors to leave relationships in this market to the channel.
"At the same time, is has been found that one of the most important things that the SME market wants from a vendor is a relationship. Direct CRM provides Compaq with that relationship at a fraction of the cost of the conventional sales model. Cost analyses have shown that person-to-person selling can cost a vendor from $600 to $900 per sale while a CRM approach such as ours costs from $1 to $2 per sale - a considerable cost saving at a time when vendors are battling with low margins and a drop in demand. With a burgeoning SME market, Compaq has the edge in gaining market share."
Adds De Menezes: "Compaq will always remain focused on its channel. What we can now offer our partners is an added resource dedicated to bringing in new customers, ensuring that existing customers remain loyal and build brand awareness in both existing and new markets. We are developing closer relationships with our partners and integrating our business models to ensure a closer working relationship which will benefit the customers."
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