Marketeer of the month
Once upon a time there was a profitable little business-to-business IT concern called DCMS. Turning over around £30m a year, the directors of this business put food on their tables by putting PCs on their customers’ desks. Then, in 1997, a big friendly giant, which went by the name of The Dixon’s Group (TDG), called in to visit and ensured that they lived happily ever after by buying over the company. Our good-natured Goliath then re-branded the business and built it up to a position where it turns over 10 times the amount it did in 1997 and is number one in the B2B IT sector. Hurrah.
However, unfortunately for PC World Business (PCWB), the story isn’t quite a fairy tale. All the best yarns have a baddy or two, and this one’s no exception. The black knight in this case is the pugnacious PC manufacturer Dell, who, over the past few years, has been taking a swipe at the rest of the marketplace armed with some very competitively priced weapons of mass instruction. Thankfully for TDG (well it sounds a bit like BFG), it has its very own knight in shining armour to offer protection.
Richard Millman is the marketing director of PC World Business and, with combat training at Guinness and Allied Domecq, he knows how to defend his brand. What’s more, he’s convinced that, despite the palpable threat posed by rivals such as Dell, this is one battle he’s destined to win.
“I’ve got a lot of admiration for Dell and what they do,” he explained from the battlements of PCWB’s imposing stronghold in Bury. “We recognise them as a key competitor and I’d hope that they do the same. But it’s important to understand the difference between their proposition, and that of the other major players, and ours.”
Sinking into his fabric throne, he explained; “Dell operates a very narrow product range, which amounts to PCs, laptops and small business servers. They offer these at, what has to be said, are very competitive prices. However, if you think of a typical SME, for example, its requirements don’t just encompass pieces of IT hardware – it spans out to print, stationery, audio-visual products, right through to services and the support element. We offer a one-stop shop for all a business’s IT requirements, 90 per cent of which leave the warehouse on the day the product’s ordered, also at very competitive prices. That’s a proposition that we’re very proud of and offers something which Dell, for example, can’t.”
With PCWB’s adversary on the back foot, Millman moved in for the kill. “I’ve sat through many an enjoyable focus group with IT buyers and managers and their main problem is that people always want something yesterday. That’s why our offer of ‘Yeah, we’ve got it, it’s in the warehouse, you’ll have it tomorrow’ is so compelling. With Dell, the product has to be built and shipped out, and this doesn’t happen within a day.
“Also there’s the face-to-face factor. Again Dell loses out to us as it’s very much a call centre and online business, whereas one of our customers can walk into any PC World store and have a discussion about the products. When you’re a small business, or a primary school, for example, and IT expenditure is a serious outlay, you want to feel assured that you’re making the right decision. That’s when that face-to-face interaction is so important.”
After that merciless assault it’s decided that it’s probably time to retire Sir Dell from this particular verbal joust and move on. As Millman mentioned, the stores are a huge boon for the business division of PC World. They give the brand a tangible presence on the doorsteps of the nation’s office blocks, and, through the brand-building campaigns for the consumer side of the firm, they grow the business division’s awareness by association. However, as our hero conceded, this can be a bit of a double-edged sword.
“The advertising for PC World, particularly the TV campaigns, are immensely powerful tools for driving people into the stores. As many of these customers will be involved in businesses, that’s a huge advantage for us. Nevertheless, it can work the other way. If you’re a medium or corporate-sized business, you may get the impression that we’re primarily a ‘store’ rather than a credible B2B IT player. If this happens it’s down to us to explain what we can offer and how they can actually benefit from that store facility being on hand for them at any time.”
Once the customers are in the store, the rapacious PCWB beast locks onto them with an acquisition programme that Millman believes Dell and the other market forces struggle to compete with. “At the point of purchase we can capture information about who the customer is buying for, whether it’s a business purchase or not, and we can bring them into an account development programme or something we call ‘business flag’ – which means that even if you don’t opt for an account we can still track what you purchase. This gives us a much lower cost of acquisition than our competitors, who have to market their proposition through telemarketing or advertising, and also gives us an excellent platform to profile and segment our customers and their potential IT requirements.”
The data that’s captured and invested in is, in Millman’s words, the company’s “family silver”. It’s the priceless booty that, if it’s tended to with loving care, should ensure that the firm continues to develop its business, customer base and bank balance well into the future. You can be sure that Dell et al won’t just freeze over and let the current B2B IT king enjoy an uncontested reign, but for the time being, in Millman’s eyes at least, the tale of PCWB looks set to have a very happy ending.