When Jeff Grammer and his partners needed computer gear for IntegrationWare, their start-up software development firm in 1993, they stopped at a small storefront in a warehouse. What they found was impressive.
“There was a high level of service, they knew what they were talking about and their prices were cheap,” says Grammer, who serves as IntegrationWare’s chief technology officer.
The storefront company was CDW, one of the early entrants into the direct marketing of computers and computer components. Both companies have grown, but the relationship remains.
“The couple of times we’ve bought retail, it hasn’t been a good experience,” notes Grammer. As software developers, their knowledge and needs usually go far beyond the expertise of the high school students employed at local retailers, but as a small company, their annual purchases aren’t big enough to warrant individual attention from the large manufacturers. Direct marketers such as CDW have stepped in to meet the needs of growing businesses.
“A lot of our business accounts start when they are a small business,” says Dan Kass, vice president of sales for CDW. “They don’t have a lot of expertise in-house, and are looking for someone to help them out.”
As business sales increased, CDW decided to focus on that aspect of the market. Sales started out as 70 percent business, 30 percent consumer. That ratio now stands at 90-10 and special services have been added to make the business buyer’s job a little easier. Buyers can customize a page on CDW’s Web site that allows them to input their preferences for equipment. Rather than having to search the site, CDW will list what the buyer is interested in on the personalized portion of the page so price checking can be done quicker. A history of purchases and order tracking are also available.
“We were never treated like a small business,” says Grammer. “I feel like I have a rep who’s paying attention to me. Our rep knows my voice. They have learned the key: services get the customer back.”
Direct advantages
- Price can often be cheaper than retail-sometimes by a large margin.
- Service levels can be higher, especially for the small business.
- Value-added services such as order tracking and personalized Web pages can make your job easier.
- There are many direct vendors to choose from, locally and nationally.
- If you’re looking for a computer supplier to build a relationship with, you’re more likely to find it in the direct channel.
Direct stats
- Direct marketers represent 17 percent of the $26.7 billion U.S. PC unit sales in 1998.
- Direct marketers represent 19 percent of $74.4 billion in U.S. PC revenues in 1998.
Source: Computer Industry Almanac.
- PC shipments to small businesses will top 8.8 million in 1998, up 20 percent from 1997.
- More than 24 percent of all PCs went to small businesses in 1998.
Source: International Data Corp.