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Conference ilbbak::us_sales_service

Title:	US_SALES_SERVICE
Notice:	Please register in note 2; DVNs in note 31
Moderator:	MCIS3::JDAIGNEAULT

Created:	Thu May 16 1991
Last Modified:	Tue Sep 03 1996
Last Successful Update:	Fri Jun 06 1997
Number of topics:	226
Total number of notes:	1486

142.0. "Brokers! Arrrrrrgh :>(((" by HOTWTR::THOMPSOKR (Kris with a K) Tue Jul 28 1992 18:54

    I've just lost (again) to a broker.  This has happened too many
    times in my 8 years at Digital.  I'm mad as Hell and can't take
    it anymore.

    The problem:

    	1.  The Digital rep does all the work, keeps out IBM, SUN, HP
    	    and others, then loses it to a Broker offering used DEC
            products at a lower price.  Result: Customer Service wins,
    	    Digital corporate wins (by maintaining a healthy aftermarket),
    	    DEC rep loses.  (OK, so I suppose Digital corporate loses too
    	    in that the selling time is lost and never recuperated but
    	    management seems not to care about that.  I mean, this is the
    	    company that doesn't even do loss analysis.)
    	    
    	2.  Equipment usually shows up damaged, out of rev., and doesn't
    	    work, yet Digital gets blame/ownership to fix.  Customers don't
    	    differentiate between sources of their DEC products (it says 
    	    Digital on it).  Sales gets measured on Customer Satisfaction
    	    so is incented to spend time with customers that don't buy
    	    from you.  
    
    	3.  When sales DOES get agressive and enforces company policy (like
    	    software license transfers not valid) the customer gets angry
    	    and defensive, further adding to the problem.
    
    My suggestions:
    
    	1.  Credit sales reps for all Digital products sold, regardless of
    	    source.   (I understand IBM faced this problem 12 years ago
    	    and saw the lost revenue and customer dissatisfaction and 
    	    eliminated the problem by giving their reps "Broker Credit.")
    	    Perhaps this credit should be done at less-than-CLP....say 50%?
    
    	2.  Continue to enforce - albeit it should be more aggressive - our
    	    policy on NOT allowing layered products to be transferred.
    
    	3.  Make it perfectly clear to customers that while we support
    	    the aftermarket segment, there is risk in buying from a 
    	    unauthorized source (broker).  And that risk is soley with
    	    the customer.
    
    	4.  Offer more realistic, competitive "street prices" from TPL.
    
    Suggestion #1 above would eliminate the selling expense, hassels,
    and customer dissatisfaction in competing against brokers and
    would give reps (some) credit for selling a Digital solution and
    not losing to the "real" competition.  (I sell to the U.S. Navy
    and have the dubious distinction of losing over $3 mil., 60 VUPs,
    and 200 GBs to brokers in the last 28 months.  This has literally cost
    Digital thousands of hours of manpower in trying to stop/compete/
    fix/document/sooth.  I have documented all losses - mostly to the 
    Newman Group - and have not seen any sign of change.  No wonder 
    this company is in trouble.)
    
    Your thoughts?  What do you do?  How do you compete and win
    (considering the lowest-cost-bidder-wins environment at the U.S.
    Government).  Who should I take this to?

T.R	Title	User	Personal Name	Date	Lines
142.1		HOCUS::OHARA	Addicted to Love	`Tue Jul 28 1992 21:46`	7
	Here's an interesting tidbit: a rep in our Account Group was competing against a broker who offered "new" h/w at rediculously low prices. The customer went with the broker but the rep did a check of the serial numbers. Turns out most of it was used and some was (surprise!) STOLEN from DEC. It pays to do a little research. Bob
142.2		SDSVAX::SWEENEY	Will I make it to my 18th Anniversary?	`Tue Jul 28 1992 23:10`	2
	Yeah, but Bob, won't Digital Services write a service contract for it anyway?
142.3		JMPSRV::MICKOL	We won with Xerox in '92	`Wed Jul 29 1992 01:22`	11
	When we compete with brokers, we try to counter with some of our refurb hardware (which after our refurb process, looks and performs just like new). If that doesn't work, and its important to win the sale, we ask for a copy of the broker's quote to make sure its legit and then bring our price down to where the customer is willing to go with us and pay something extra for our added value. Regards, Jim Xerox Account Group
142.4		HOCUS::OHARA	Addicted to Love	`Wed Jul 29 1992 09:24`	10
	Jim I've quoted re-furb stuff, and though it's cheaper, it's not a real bargain. So we need to allowance the stuff to match the broker. In a pure hardware sales, eg upgrade, I don't see any added value we bring to the table over a quality reseller/broker. After all, we will service the stuff. Bob
142.5	Brokers are good for me too!	DPDMAI::AUTRY		`Wed Jul 29 1992 10:26`	19
	Kris, In response to you memo, I understand your frustrations and I do not believe that you are going to see any changes. I am a Account Support Rep, (I sell services) and when a broker wins a bid it means that I get to go in and sell HPS and SPS which is good for me because I am measured on revenue and I would not get credit if the sales rep sold the system with warranty. The only answer is to bid under the broker with an allowance, when the customer call us we are more than happy to provide services to them and often assist them in getting the system where it need to be in rev levels and software. Good luck with future sales!!! TLA
142.6	CERTS vs REVENUE - the issue that will not die!	SYORPD::DEEP	Bob Deep - SYO, DTN 256-5708	`Wed Jul 29 1992 14:57`	11
	If brokers win the hardware component with DEC product, and Digital wins the service business, then the Sales Rep loses (CERTS) and Digital wins (REVENUE). If Digital undercuts the broker with allowances, and does not win the service business, or gives it away (WARRANTY), then the Sales Rep wins (CERTS) and Digital loses (REVENUE). So once again we see the measurements driving the behavior (AS THEY ALWAYS WILL) and the behavior hurting the company. Bob
142.7		HOTWTR::THOMPSOKR	Kris with a K	`Wed Jul 29 1992 16:24`	16
	So lets change the measurement system!! I agree with the responses about different winners and different losers, so my suggestion (request) is LET'S FIX THIS AND MOVE FORWARD. Other points: In a "blind" RFP process, it is near impossible (and illegal) to know the brokers bid before opening. I do my research, appeal (beg) to Operations, and usually come close to winning. (I lost three deals worth $1.5 mil by a total of $35K.) I have created a document called a "Perfect RFP" (internal name only!) that I use with customers to prevent broker losses. It actually a questionare designed to trigger requirements in our favor.
142.8		HOCUS::OHARA	Addicted to Love	`Wed Jul 29 1992 21:10`	9
	>>If Digital undercuts the broker with allowances, and does not win the service >>business, or gives it away (WARRANTY), then the Sales Rep wins (CERTS) and >>Digital loses (REVENUE). Minor nit, but I can't see how warranty is a "giveaway". It's got to be included in the price of the new box. Bob
142.9	Would you share?	WKOL09::STETSON	Rick Stetson @WKO DTN 367-4038	`Thu Jul 30 1992 06:10`	13
	re: .7 Kris, You mention a questionaire in your reply. Would you share that with us here? If not, could you mail me a copy? THANKS!! Rick PS: I really appreciate your Salesman's Prayer! Is your base note here a new verse?
142.10	The "Perfect RFP" Questionaire	HOTWTR::THOMPSOKR	Kris with a K	`Fri Jul 31 1992 20:06`	115
	QUESTIONAIRE CHECKLIST IN DEVELOPING YOUR SOLICITATION, HAVE YOU CONSIDERED THE FOLLOWING: HARDWARE ____ Do you have a complete, integrated, functional system in one single CLIN? (as opposed to a laundry-list of items) ____ Have you specified the latest hardware and software revision level (Engineering Change Order, Field Change Order) at time of delivery? Have you asked for a Certificate of Maintainability from the bidder? If not, are you willing to accept used equipment that is not at the current rev. level? ____ What is your required performance level (VUPS? Linpack? Specmarks?) Is this per CPU module or per complete system? ____ Do you need SMP now or in the future? ____ Are you interested in volume shadowing now or in the future? ____ Do you need the ability to cluster? Which type of cluster (CI, DSSI, or mixed)? ____ Have you considered an evaluation based on a price/performance basis, rather than on a minimum compliance basis? (better value/increased reliability/latest technology) ____ Are there existing I/O devices that require a particular I/O bus? What I/O throughput do you require? Or do you just want the fastest available? ____ Are you willing to accept protocol conversions or emulators that can lead to slower I/O performance? Have you specified a native-mode protocol? ____ Have you specified compatibility and support of the version of the operating software you will be running? Are you willing to accept third party device drivers that might lag behind version of the operating system by up to 6 months? ____ How much memory is required? Expandable to what maximum? Are you willing to accept "old" memory and give up some performance? SOFTWARE ____ Valid, legal Digital software is only available from DEC or one of its many authorized distributors. Are you asking for the status of the bidder (i.e. authorized or not?) ____ Are you asking for proof that the software provided is valid and the most current version available? (Proof could consist of a a copy of the DEC Software Relicense Form.) ____ Have you included all the required software licenses? (Don't forget all the client and server licenses!) ____ For EACH SOFTWARE PRODUCT, have you specified: ____ type of license (cluster, capacity or user-based?) ____ media and documentation (extra copies?) ____ telephone support ____ update service ____ Would you like an error predicting software tool to prevent downtime? SERVICES ____ How fast of a response time do you require for remedial service? Does it matter where the service engineers are located? Or where the spare parts inventory is maintained? ____ Would you like remote dial-up diagnostics capability for support within 30 minutes of logging a call? ____ What training do you require? (application, system management, etc.) ____ Do you require installation service for the software? hardware? ____ Do you require on-site consulting services? (for application integration, network troubleshooting, performance tuning, etc.) Have you planned for implementation of your system? ____ Have you requested on-site maintenance for the first year? For option years? ____ Do you require system integration services to make sure everything works? Who will be responsible to integrate everything in a multiple award contract? Have you considered the advantages of having one supplier? ____ Will the on-site personnel need a security clearance? What level? MISCELLANEOUS ____ Does the vendor meet the requirements of the Walsh-Healy act? (is a regular dealer/maintains an inventory/has a regular address) Does the vendor have the equipment currently in stock? ____ Is the vendor an authorized reseller of the manufacturer's products? If so, what is their authorization number? ____ Have you asked for references? If so, have you contacted them? ____ Have you asked for a tech eval? Are you willing to let the contract negotiator make technical decisions on your behalf?