Emphasize service and support.
We must differentiate ourselves from the box pushers. We need to establish our business offering as a clear and viable alternative for our target market, to the price-only kind of buyer.
Build a relationship-oriented business.
Build long-term relationships with clients, not single-transaction deals with customers. Become their computer department, not just a vendor. Make them understand the value of the relationship.
Focus on target markets.
We need to focus our offerings on small, medium, and large size businesses as the key market segment we should own. This means the 5-20 unit system, tied together in a local area network, in a company with 5-50 employees. Our values — training, installation, service, support, knowledge — are more clearly differentiated in this segment. We must continue to service our existing relationships, contracts, and even expand them into neighboring states; however, we must focus on all of our target markets, rather than just one segment as we have done in the past.
As a corollary, the high end of the home office market is also appropriate. We do not want to compete for the buyers who go to the chain stores or mail order, but we definitely want to be able to sell individual systems to the smart home office buyers who want a reliable, full-service vendor.
Differentiate and fulfill the promise.
We can't just market and sell service and support, we must actually deliver as well. We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have. In addition, we will continue to maintain the highest quality control.
Our strategy is emphasizing relationships. The tactics are marketing the company (instead of the products), more regular contacts with the customer, and increasing sales per customer. Programs for marketing the company include new sales literature, revised ad strategy, and direct mail. Programs for more regular contacts include call-backs after installation, direct mail, and sales management. Programs for increasing sales per customer include upgrade mailings (the S.E.A.T Management program), and sales training.
We have also formed strategic relationships with IT staffing companies and consulting groups; we are entering into a joint relationship with these individuals and companies for the express purpose of selling equipment, service, and network installations to their existing clientele. This produces a win–win situation for both the consultant and us. From the consultants' point of view, they are selling our S.E.A.T. Management service to their existing clients, thereby further fortifying the relationship against a competitor. The benefit to DCH is that we are not having to convince a client to terminate a good relationship with their dealer, or consultant. We work seamlessly with each dealer, and consultant.
Once the acquisition of the software company is completed, we will immediately begin placing emphasis on service and support: our main tactics are good hardware, networking expertise, excellent training, and selling our own proprietary software/network administrative system specifically designed for business machine dealers. For developing our own proprietary systems, our programs are company direct mail marketing, and working with VARs (Value Added Resellers).
Our competitive edge is our positioning as a strategic ally with our clients, who are clients more than customers. By building a business based on long-standing relationships with satisfied clients, we simultaneously build defenses against competition. The longer the relationship stands, the more we help our clients understand what we offer them and why they need it.
Many of our existing contracts show huge potential but, over the past three years we have not addressed the changing needs of our clients. We are now specifically targeting each and every client with specific reasons that they should buy from us. In addition, we have implemented programs to make it very attractive for our existing client base to acquire their equipment from us, and we have started a strong outreach program within the community to increase our market share.
We depend on word-of-mouth advertising and direct contact by our sales representatives as our main ways to reach new buyers. As we change strategies, however, we need to change the way we promote ourselves:
Domino Comptech Holding's computer division, KMCI, focuses on the market need for customized and differentiated computer hardware, software, and networking requirements. All of our products are built entirely to the clients' specifications. We have added customers through the VAR (Value-Added Resellers) channel. The VARs need to protect their special relationship with their customers, maintaining the sense of customization and personalized service. Each VAR is a direct extension of our company, and we respect each and every one of their clients, by providing the best equipment and the most reasonable pricing structure, with quality control that is second to none. Our company prides itself on achieving a total failure rate of less than 5%, which is well below the industry standard.
We will also maintain a strong presence in the high volume channels. We recognize that this is harder, because the overall sales cycle is longer; however, because we own our own manufacturing plant, we can offer the most competitive price, even if we are in competition with one of the Big 3 computer names.
DCH and KMCI do not have a Marketing Director. This is one of our management gaps, and we are currently interviewing, in an attempt to fill this position as quickly as possible. In lieu of having a formal "Marketing Plan" with well established milestones, we are currently implementing the marketing plan that was created by the former Marketing Director. The S.E.A.T. program is just one such example. As you can see in the Sales Forecast table, we expect to see a large increase in sales, because of the favorable response that our partner dealers have shown. We are currently seeing one call closes (something that the industry has not seen since the late 90's).
KMCI doesn't have the luxury to sit back and wait; we must capture the market ourselves, and the best way to do that is to establish strategic alliances with companies and individuals that already maintain a "book of business" and then exploit those relationships to the benefit of both KMCI and our strategic partners.
We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge.
We cannot build the service and support revenue into the price of products. The market can't bear the higher prices and the buyer feels ill-used when they see a similar product priced lower at the chains or with other competitors. Despite the logic behind this, the market doesn't support this concept; however, we do build in help desk, on-site service, etc., to each and every one of our S.E.A.T. Management clients, because the overall cost per unit spread over a three year period (the length of the S.E.A.T. immediately contract) reduces the total cost for service to only a few pennies a month. Because the overall cost to the client using S.E.A.T. Management is so low, there is never an objection in charging for the service we provide.
For business people who want to be sure their computer systems will work reliably, KMCI is a vendor and trusted strategic ally who makes sure their systems work, their people are trained, and their downtime is minimal. Unlike the chain retail stores, and our other competition, the KMCI sales and service staff know the customers, go to their sites when needed, and offer proactive support, service, training, and installation.
DCH is divided into different divisions, with each division responsible for the implementation of their own individual sales strategy. Because each division differs in both products and services is it vital that each division maintain focus on its own priorities. With that said each division has certain similarities, and some crossover in strategy is evident. The common ground for each division is:
The sales table and charts, below, indicate KMCI's projected sales, and how we plan to increase those sales in the immediate future.
The Sales Forecast table indicates the actual and projected sales that DCH expects from the KMCI division. In the past, KMCI did not have the captive sales force to generate these types of sales on a consistent basis; however, with the new marketing strategy of signing up dealers to sell S.E.A.T. Management on our behalf, and then paying these dealers a commission, we have in fact increased our present sales force by 200%. KMCI has also initiated an agressive hiring campaign to increase our in-house sales force. From a profit position, it really doesn't matter if a dealer or an in-house sales person makes the sale; both are paid the same rate of commission.
We depend on our sales staff to maintain, and strengthen all of our strategic alliances for the express purpose of generating continuous leads for our add-on products. We need to make sure that our personnel are aware of the support and reciprocation that we share with our strategic partners.
The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.
What the table doesn't show is the commitment behind it. Our business plan includes complete provisions for plan-vs.-actual analysis, and we will be holding follow-up meetings every month to discuss the variance and course corrections.