Owning the End UserBy John Honovich, Published Sep 13, 2011, 08:00pm EDT
Integrators routinely block end users from the best solutions, steering users to offerings that maximize the integrator's probability of success and profit. However, end users rarely understand the dynamics involved. In this report, we explain the problem, the issues involved and potential solutions.
Owning the End User
The nastiest battles between manufacturers and integrators is over who "owns" the end user. It is very common for integrators to demand that manufacturers only speak to "their" end users when approved and chaporoned by the integrator. Many integrators feel, and want, to 'own' the end user relationship. Manufacturers who set up meetings directly with end user often results in phone calls highlighted by screaming, yelling and cursing. We have been on both sides of such encounters.
The process of an integrator screening manufacturers has advantages and disadvantages:
- On the positive side, the integrator can vet manufacturers, rejecting ones that obviously are a poor fit. This saves the end user time and headache.
- On the negative side, the integrator can block manufacturers who do not provide them favorable terms or who are aligned with rival integrators. This prevents the end user from considering promising solutions.
The incumbent integrator often has adverse incentives to their end user. Since the integrator already has the customer's business, the most immediate tactical concern is to protect the status quo. As such, incumbent integrators are often conservative because changing products can trigger reviews of new suppliers or new bidding.
On a local level, the integrator account manager of a large customer has a lot riding on continued business from that customer:
- Not only is the account manager's income overwhelmingly dependent on that client, losing their main customer could cost them their job.
- By contrast, the upside of switching to a new platform or product is low to the account manager since they are already generating significant revenue and commission on existing sales.
- Finally, the current platform or products being sold by the integrator often is a line that the integrator has good pricing or restricted access. Moving to something new can disrupt their existing competitive advantage.
However, the outside integrator's tactics often run contrary to the best interests of the end user:
- The outside integrator is motivated to criticize the current solution, regardless of the quality level. If the end user is not convinced a product or platform change is needed, switching integrators is much harder.
- The outside integrator will likely recommend products they have better pricing for and or have restricted access to sell (i.e., they are dealers but the incumbent is not).
- The outside integrator is motivated to over sell new technologies to motivate the customer to switch. However, these technologies may be immature or work poorly in your environment.
What to Do?
There is no simple way to determine who is the good guy or bad guy as the quality and committment levels of integrators range widely. However, the first step is to appreciate that these drivers do exist and commonly shape what is recommended.
Here are some considerations for end users with their incumbent integrator:
- Do not give your integrator power to reject products or manufacturers without first consulting you. This is too much power and can lead to abuse.
- Challenge your integrator to regularly offer new manufacturer's products or platforms. At the very least they should explain the options, pros and cons of each (keeping in mind they might be motivated to discourage you to change).
Likewise, when evaluating new products directly from manufacturers or from rival integrators:
- Be skeptical of pitches for new technology. Vet references carefully. Do real on-site tests. Your current integrator may very well be trying to protect you from a shady operator trying to take advantage of you.
- Inquire over what terms or restrictions the outside integrator has on the products they are recommending you. Remember they might be pushing a specific thing mainly because it is their best chance of ousting the incumbent.
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