SMB IT Journal

This is general business advice that often applies to IT but is certainly not limited to that realm alone.  Outside support in IT comes from two main sources: firms who are paid (by you) to advise you and firms paid (by you) to sell you something.  The first are what we generally consider consultants.  The second are what we call resellers.

The simple rule of thumb is – never, ever get advice from a reseller.  At least not general advice, at best very specific advice centered purely around only the products that that reseller sells.  This isn’t to say that resellers are bad, far from it.  In fact, the reason that you can’t get advice from a reseller is not because of them but is because of you – let me explain.

When we go to a company to get advice we must pay for that advice.  One way or another, nothing is ever free.  Resellers traditionally earn their money by providing whatever free advice we desire and then making their money by selling us a product that has been marked up to cover their costs and to provide for their profit.  This is fine, but as the customer we need to understand that we are only compensating that reseller if they convince us to buy a product or a service that they sell and we compensate them better the more of that product that they convince us to buy.  The reseller isn’t at fault here, we need resellers and we need them to make money in this manner.  The issue is going to them and attempting to get free, general advice – we are forcing them to either work for us for free or to sell us something whether it is the right thing for us or not.  We’ve backed them into the proverbial corner and the only reasonable response is for them to attempt to sell us what they offer.  That is, after all, their job.

This leads to an additional problem, of course, which is that resellers don’t have skilled, professional, general-consultants on staff – at least not as a rule.  So if you go to a reseller and ask for advice, that reseller is almost assuredly only trained and knowledgeable on the products that they sell themselves.  They may not even be aware of what other solutions are on the market or, if they do, they do not know them to the same depth as their own products and may be unaware of advantages and caveats that you might need to know to make a truly informed decision.  Even if they did, it is not in their interest to tell you about them – you are only going to compensate them if they sell you something.

This is not to say that resellers are not good, honest, hard-working folk with value for our industry.  They are, but they aren’t magically free consultants like many people expect them to be.  Resellers are there to add consulting and selection assistance, as well as warehousing, repair, logistics and other value-adds, solely around the products that they represent.  Trying to get general consulting from a reseller is like asking your Chevy dealer to advise you as to what vehicle to buy and hoping that they equally consider all major makes, models and types of transportation as well as the regulations and limitations of all of these and are able to apply this to your unique situation – including knowing when to tell you that you don’t need to buy anything at all.  Of course, all they will do is try to sell you the best Chevy that meets your needs whether the best option for you is to just walk, buy an Impala, take a cab or to buy a fifty foot deep-sea fishing trawler.  Even if they did have the expertise to look at the big scope of your transportation needs you aren’t willing to pay them unless they give a specific answer.  So we can expect that the answer we pay for is the one that we will get.

Resellers are useful only after the decision to buy the products that they sell has already been made.  A reseller can then help you choose the right product from the range that they have.  For example, if you are buying a server from a reseller, that reseller can help you to choose which options like drive types and sizes, out of band management and other add-ons you might want.  But even then, be wary that they are likely earning more to upsell you and will recommend unneeded extras or may advise making configuration changes without understanding the entire scope of the project and how those changes from your original requirements might affect you.

Attempt to limit the advice that you receive to very concrete items such as “does this particular model offer this particular feature that I am seeking?” and avoid subjective valuations between products “is this one fast enough or should I buy the bigger one?” or “how does this compare to your competitor’s product?”

When asking subjective questions you are actually pressuring the reseller into either making more money overselling to you or losing money while trying to find the most appropriate product.  Not only do they make more money (generally) selling you the more expensive item but it also mitigates their risk that they didn’t get you what you needed.  There is no reason for them to take on risk, they’ll just try to sell you as much as possible and, if you come back unhappy, they can say “well, we tried to convince you to get a bigger, faster model but you wanted to save money and this is what happens.”  So it is not in their interest in any way to size to your needs but always to pad for safety and profit.  A position that they are put in, again, by their customers.

In most cases, principal vendors are themselves a reseller so can be considered in exactly the same way.  If you call Dell to buy a product, they will sell you a Dell no matter what your needs are.  This is not their fault, they only have one job, to sell you Dell products and if you call them for advice they can only assume that you did so because you wanted to buy a Dell.  They are no more going to consult on what IBM product to buy as they are on what car to drive or if its a good time to sell your house and move to Florida.  But they are very helpful in making sure that the Dell product that you order is going to be the one that you wanted and that the extra parts that you are getting will work with that model.  That’s what they are there for.  They will figure out how long it will take to arrive, go over warranty terms as well as give you pricing and financing options.  These are all things that your general consultant cannot do.  The two roles are complimentary, not competitive.

A perfect example of this entire scenario is one that I see happen in the real world time and time again.  With the recent explosion in virtualization businesses are turning, en masse, to vendors to find out what they need in order to dip their toes into the world of virtualization.  What I see, over and over, is instead of being sold a reasonable virtualization setup they are often sold entire systems including storage and software that in no way meets their needs and, often, actually works against their needs while costing as much as ten to twenty times what a better performing, more reliable system would have cost.  Often they are upsold into a completely unreasonable category of product for their project and then caught by budget limitations and stuck skimping – leaving them with a crippled virtualization project that could have been completed successfully for a fraction of the money spent and leaving good room for growth over time as needed.

The issue, of course, is that turning to a vendor and asking for advice on virtualization products is exactly like saying “I have no idea what I’m doing, let’s see what you can sell me on.”  And honestly, once the vendor knows you don’t even have your architectural elements worked out before contacting them, they know that the sky is the limit.  The goose has arrived and all they have to do is wait for that golden egg to be delivered.

I’ve heard this exact scenario so many times, I can’t count.  Your vendor is not your friend.  They have one job to do – sell you as many products as possible.  If you ask them what you should buy they will tell you whatever you want to hear.  They will cut corners on safety items or management items that they feel you will not find flashy or cool and will sell you what they think you will get excited about or confused about.  They know their jobs well – they have to, it is a tough market.  A great example is vendors cutting storage costs by selling smaller than appropriate storage arrays and using risky array configurations to make the capacity cost less.  That the client is at heightened risk to a failing array doesn’t impact the vendor and is a very hard issue to quantify, so once the product is sold it is the customer’s concern not the vendor’s.

The answer to this is to leverage a general consultant.  A general consultant gets compensated by delivering good advice and not for selling you a product.  In theory a general consultant will earn a similar amount regardless of whether they convince you to install millions of dollars of products or to do nothing and use what you currently own.  A general consultant should be far more intimate with your environment than a vendor or reseller could ever be and should be able to speak to your technical staff, make presentations to the business and put their advice into the proper context for your business with insight into how the costs, risks and other factors will impact you specifically and advise on what they feel is more appropriate for your specific needs.

In reality you still have to consider the complete role of your general consultant.  Most often a general consulting firm will also offer broad support and implementation services.  These are loosely tied to their recommendations so caveat emptor applies as always, but since they are compensated in a far more direct manner (paid for their effort) they have a very real reason to deliver you what you are buying.  Even general consultants who have some ties to reselling often make a very small fraction on the resold goods as they do on the consulting so anything that puts their consulting work at risk is a major liability to them.  Make sure that any general consultant, if offering resold services, is not tied to them and works with other resellers or vendors as well.  Sometimes general consultants offer low cost reseller services as a loss leader or at minimal profit just to keep customers from feeling that they must turn to another company but would prefer if their customers did not use  that service – profits are often higher not reselling.

Your general consultant should be able to interface with your resellers or vendors directly or allow you to do so.  Having a consultant handle the transaction can be beneficial because it provides an integrated procedure and consultants are very unlikely to be persuaded to make snap decisions based on sales, “special deals” or to be sold on a different approach by a salesperson who has a specific product to push that month.  The consultant has little emotional tie to the purchasing process and so can be much more methodical and calculating.

Of course we must consider the opposite situation as well – how do we treat our service providers?  For example, if we go to a reseller over and over again asking for advice, making them generate quotes and generally spin their wheels and then buy nothing from them or very little we will, sooner or later, force them to either refuse to work with us at all or do something drastic like supplying less than accurate data or raising prices.  A good vendor or reseller will provide you with the best value when you treat them well.  Loyalty may seem to be dead in business transactions today, but this is not at all true.  Good relationships still pay off.

With consultants the need to treat them well is somewhat built into the equation – you generally pay for what you get so other than being friendly and respectful you don’t normally have too much to worry about as far as how you are structuring your relationship.  But even with a consultant there are still concerns.  If you pay for an “unlimited” service plan, use it well but don’t abuse it, for example.  Always make your consultant happy that you are their customer and, most likely, they will work hard to make sure that you are happy to be their customer too.

The most important concept to take away from this is that with any company with whom you do business, you should have some empathy for them.  Put yourself in their shoes and think about how your relationship with them is structured.  Are your goals mutually aligned?  Is it in both companies’ interests to act in the interest of the other?  Or have you arranged for an adversarial relationship where they can only win at your expense?

Keep in mind that you are the customer so, very likely, your consultant or reseller is, to some degree, at your mercy to make sure that your relationship is a healthy one.  In order to obtain clients they are often pressured into a position of accepting a less than ideal arrangement.  As the client, you have the opportunity to be the client that that consultant or reseller is excited to work for and will go out of their way to make happy.  The choice is very much yours to make in most cases.  Choose well because good relationships can work wonders for your business.

Ask a jeweler what to get your wife for your anniversary and he will say: “You can’t go wrong with jewelry.”

Ask a florist what to get your wife and he will tell you: “Women always love flowers.”

Ask a chocolatier and he will tell you that nothing makes a woman happier than chocolate.

Ask a consultant he will ask you: “What does your wife like?”

Tags: consultant, Never Get, relationship, reseller, vendor

Trackback URI | Comments RSS