Hitting the sweet spot in tough times

We thought 2010 would be hard. It’s certainly claimed its fair share of victims, but those of us already planning for 2011 are already predicting further challenging times for resellers across the UK. There is a combination of economic and financial factors that, if the channel fails to prepare for, could spell disaster for business plans for the year ahead.

Spending cuts

The repercussions of the public spending cuts announced in October will start to hit in the New Year – and those resellers who have previously enjoyed a strong, consistent revenue stream from public organisations may well find their customers forced to reduce or even freeze their IT procurement, leaving them exposed with gaps in their sales pipeline. We know these cuts are coming, but we can only speculate on what the impact may be, however resellers need to assess the situation urgently and get their Plan B ready for action.

Not only this, but if the signs are correct, we may be heading for another wobble in trade insurance confidence. 18 months ago we saw the channel paralysed as trade insurers chopped and changed their cover on a week by week basis. As a result of this inconsistency, cover was reduced, credit was squeezed and sales pipelines grew stagnant as companies weighed up the consequences of working with so-called ‘high risk' partners. It’s been a slow recovery, but the channel has worked towards pre-crisis conditions and trading has been steady, albeit in a difficult market and with margins taking a good squeeze. However, if the rumours are to be believed, insurers are feeling nervous again, particularly for companies with high exposure to the public sector.

So the outlook could be bleak, if resellers fail to plan for what 2011 could bring. However, there are specific market sweet spots that are still showing growth and a propensity to invest in technology to improve business efficiencies, there is plenty of opportunity for pro-activity. Clearly, those resellers who take an intelligence-led approach to their sales strategies will be the ones to prosper.

Solvent demand

In order to find these sweet spots, resellers need to adopt a strategy which focuses on finding ‘solvent demand’ within a marketplace – this is something that credit experts are already starting to discuss as a key trend for 2011. In short, it describes private sectors businesses with minimal exposure to the public sector cuts, who will remain financially strong and continue to grow.

These are the ones to watch – and resellers can expect to face tough competition for these customers. So how can a dealer stand out and secure not only instant sales, but a strong and secure pipeline of business?