Subject: [NEXTEL-1] The Future of Two-Way Dealers

From: [email-masked]
Date: Sat, 24 Jul 2004 18:04:33 -0400

The Future of Two-Way Dealers

By Mark Landiak

President
Corporate Dynamics Inc. (CDI)
http://www.corpdyn.com/default.asp

The difference between prosperity and survival as a radio dealer may lie
in
your ability to diversify into other areas of business. Imagine that the
phone rings at your office. You're surprised to hear a technology
consultant from a local computer company asking you to bid on a radio
system as part of their comprehensive wireless applications proposal to
a
client. This consultant was selected by the IT department of the client
as
the primary consul ant and integrator for this project. The client's IT
manager wants a new communications system built into the proposal, even
if
they don't implement it in the first phase of the project (which focuses
on
wireless broadband applications).

The consultant company is supplying the IT side, but needs help with the
RF
component and may also want to use you for installation if you are
selected. They've already received bids from two other companies who are
very anxious to do business with this client. You ask who the client is,
and get a sick feeling in the pit of your stomach when they tell you.
It's
a municipality you've had a business relationship with for more than 15
years. In the course of one phone call, a trusted, long-term
relationship
has reduced your status to "vendor." You are now dispensable.

Think this is far-fetched? Think again. It happened more than once last
year and is going to become an all too familiar story as computer
companies
continue to make inroads with your customers with IT applications, and,
in
particular, wireless broadband. The bottom line is that if you are
nothing
more than a two-way radio company in the eyes of your customers, you are
in
a vulnerable position going forward. I'm not suggesting that you give up
on
two-way radio. That's your core business and an important part of your
revenues. What I am suggesting is that you carefully consider where your
business is right now and where you want it to be three to five years
from
now.

For many dealers, the future lies in making the transition from merely
supplying two-way radios to incorporating other communications solutions
such as wireless broadband into their repertoire. It means becoming a
total
solutions provider. Here are five things you can do to ensure your
future
in the wireless industry:

1. Adapt Your Business Plan

Becoming a total solutions provider means incorporating applications for
radio; wired and wireless local- and wide-area networks (LANs and WANs);
security and surveillance equipment; and other wireless and wired voice
and
data applications. You should meet with those responsible for IT
functions
to find out how their companies are looking to these technologies to
increase efficiency, decrease costs, and improve safety.

If your customers are currently using any of these products, find out
what
they purchased and what their expansion plans are. This might give you a
clue as to the direction you need to move in. A total solutions approach
also means learning about the long-term plans for the organization and
helping them to understand what your company can do to address them.

Armed with this new information, your business plan may take a different
form. You might need a new structure for your sales and service team.
Many
dealers are hiring IT specialists to work with their two-way teams. This
adds a cost, but also provides the potential for incremental revenues.
It
means rethinking the way you do business and determining whether you get
in
on the action or sit at the bench (pardon the technical pun) and watch
others play the game.

2. Position Your Expertise

As a total solutions provider, you have the opportunity to position your
radio expertise in the LAN/WAN space, differentiating you significantly
from your competitors. The wireless products all rely on proven radio
communications, which you know better than your competitors, better than
your IT customers, and better than LAN consultants. Leverage your radio
ins
tallation expertise to give you an unparalleled advantage in making
radio-based technology work effectively. When was the last time you saw
an
IT person climbing a tower to test equipment or check for line-of-sight
functionality?

You can also position your technical expertise to handle complex
technology
solutions such as 9-1-1. 1 don't know of many IT companies that play in
the
9-1-1 space, or even care to. Additionally, plant safety and
employee/guest
safety are no less important than public safety. No one understands
safety
applications better than companies with a two-way history. If the
customer
tells you that the priority is safety, you may have a built-in
competitive
advantage over IT companies.

When you talk about safety, also talk about reliability, functionality,
interoperability, problem resolution, and special applications. Tying
your
service capabilities and expertise into the needs of the customer and
positioning it all under one umbrella enables your company to stand out
from all the others as the one who can support their needs in the most
comprehensive manner. Expertise in these areas may be the key to being
able
to differentiate your company from the hundreds of IT/computer companies
that are looking for wireless broadband business.

3. Leverage Existing Relationships

For many dealers, moving into the wireless broadband space is a logical
step to becoming a total solutions provider. Savvy dealers know that
leveraging long-term customer relationships, especially their public
safety, municipal, and large enterprise accounts, will open the door for
conversations about 802.11 wireless LAN applications and products such
as
Motorola's Canopy (TM), which operates in the 5.2 GHz and 5.7 GHz
unlicensed bands. Associated peripherals that can handle video and voice
applications offer opportunities for higher sales and higher margins.

The fastest way to learn the business is to ask customers who have
already
made the move to broadband for feedback. Consider asking your clients
the
following questions:

. Why did you decide to invest in broadband?

. What problems were you trying to solve?

. What was the status of your communications before you deployed
broadband
equipment?

. What are the most significant gains you've realized?

These questions identify the problems that broadband solves, the reasons
that customers deploy the technology, and the results your customers can
achieve. They will help educate you and your sales team on how to
effectively market and sell these products.

One dealer learned that their customer wanted to connect two banking
facilities for the purpose of transferring data back and forth. The
dealer
convinced the customer to replace several costly T1 circuits with
wireless
broadband. The total value of the sale was more than $90,000 with a
40-percent margin including service and installation. The customer is
now
considering adding voice-over-Internet protocol (VoIP) applications and
wireless remote surveillance of cash stations.

4. Examine Your Sales Structure

For some, transitioning to the total solutions approach means
restructuring
sales efforts and hiring someone with IT experience to support a new
direction and new applications with new (or existing) customers. One
dealer
has been playing the IT game for more than a year with significant
success,
adding more than $900,000 in revenue at margins of more than 35 percent.

Point-to-point solutions such as Motorola Canopy add value to the
two-way
relationship and can boost margins when sold as part of a comprehensive
solution rather than as stand-alone, add-on equipment to an existing
system. Hiring a salesperson with IT experience or a specialist with
knowledge of the products and applications to support the traditional
sales
team can add value immediately, as well as boost sales in the long run.

Making joint sales calls with manufacturers can get you into the game
quickly. Companies such as Motorola, Proxim, RadData, Vanguard, and
Pelco
offer products that support these broadband applications, as well as
sales
support that can be a big help in getting your efforts off the ground.

Also consider the way you market your company. If you promote your
company
as merely a two-way shop, you will likely not get the call when one of
your
customers considers a move to broadband. However, if you make the effort
to
expand your reach, and likewise make it known that you have expertise in
these new areas, some very interesting doors can open.

Some dealers are forming alliances and partnerships with wireless
Internet
service providers (WISPs) and computer companies. This is a good
strategy
for companies that neither understand the IT world nor have any
connections
to it. WISPs also open a whole new world of consumer opportunities
through
residential and hotspot applications.

The opportunity for revenue sharing and the creation of recurring
revenue
streams in this market make it worth investigating. You might find that
this becomes part of your sales structure as well. And these companies
often do not have the installation capabilities that two-way dealers
have.

5. Make Nice with IT Managers

Ask one of your best customers to introduce you to their IT director,
and
set a time to introduce your company and position, your expertise, and
resources. Ask the IT manager to take you through their IT plan and
areas
of concern/development. This will be an enlightening experience. Make
sure
to ask them how they see the IT and RF components working together to
address the needs of the organization. Offer your assistance in bringing
them up to speed on the RF components and help them to understand the
complexity of the systems that your company maintains and services. Help
them see the similarities in the technologies and give them a comfort
level
in your ability to support their broadband applications.

Still not convinced you need to play in this space? Pick up any of the
industry magazines, look at the number of articles on broadband
technologies, and start reading. Give your sales team the same
assignment.
That should further convince you what the future holds, and where you
should be putting some of your resources.

And the next time you are at your customer's location, notice who is
coming
and going. One day in the future, you might be getting a call from one
of
those Bill Gates-looking guys to invite you to bid on a system for your
own
customer. Think about what a sick feeling that will be if you don't
prepare
your business today for your customers' wireless needs tomorrow.

By the way, is that your phone I hear ringing?

The Wireless Journal - July/August/September 2004

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