I-BN’s own President, Gary Feldman, was a guest on the SMB Jumpstreet podcast recorded live at the annual 90 Minds’ Meeting of the Minds Conference in sunny San Diego, CA.
“Surviving in a World of Zero Margin” was the topic of the podcast and it led to some lively discussion as Gary, the hosts, and Moira Goggin, a fellow guest from Chismet Consulting, imagined a world where their vendors no longer offered margin.
Wisdom was shared, mostly focusing around the 3 R’s of VAR success that can be applied to most businesses.
The 3 R’s:
- Recur (recurring repeatable revenue)
- Retain (keep your ideal, desirable customers)
- Recruit (new customers)
The following questions were asked by the hosts and can lead to some insightful responses that could apply to your business:
- What is the first thing you need to do to adjust to this new reality?
- How does this impact your new customer strategy and marketing?
- Are you charging for initial visits?
- Are you charging for discovery/due diligence?
- What higher margins activities will you promote to offset the zero margin on the software?
- What activities will you stop offering?
What does your typical customer look like for the future?
- What type of customer will you fire?
- Are you still reselling or are you distancing yourself from the software/service and becoming more independent?
- Do you pursue a niche market? If so, what niche(s)?
- If you are not realistically going to do X by X months, stop and find a better niche.
Gary had insightful and beneficial points, including:
- Long-term social media strategy as it relates to customer acquisition cost.
- To humanize social media and marketing.
- When it makes sense to be more selective when choosing a customer.
- Why it’s so critical to define your packages (services) and their scope and value
The only question that you’ll have left is, “What’s with the bagpipes?”