D&H Goes for the Gold with SMBs

Lynn Haber

On the cusp of its centennial celebration, D&H Distributing, a family business that is 36 percent employee owned, is no stranger to change. With leading IT distributors such as Tech Data and Synnex expanding operations via acquisitions — Avnet’s technology solutions operating group and Westcon-Comstor, respectively — and Ingram Micro scooped up by Tianjin Tianhai Investment Co., the number of distributors with which partners do business is shrinking; partners don’t always differentiate between them, either. Still, D&H is unwavering in its mission and focus: serving the small partner and customer.

D&H’s Dan Schwab

“We’re not an enterprise distributor, nor do we intend to be,” Dan Schwab, co-president of D&H Distributing told us. But that doesn’t mean that D&H is sitting still.

In fact, in a discussion of the three top changes occurring at the small business distribution operation, the first is about the company’s commitment to and investment in all things SMB. While many distributors increasingly set their sights on the data center and the enterprise, that’s not in D&H’s DNA. “In any organization, when you focus on the very largest customers to the very smallest, over time you end up moving your sales reps’ focus to the highest common denominator,” Schwab noted.

By contrast, D&H has always been known as a small business distributor, something of a rarity in a community of mostly large distributors. D&H’s strategy is to add more value to its go-to-market strategy as it relates to small business — small business partners who focus on customers with 250 seats or fewer, with the sweet spot being about 100 seats or less.

How does the company go to market? According to Schwab, two out of three phone calls that D&H makes are outbound, demand generating, evangelizing technology and training resellers. “We’re really the trusted adviser to small IT shops that may have two to 10 employees and rely on us a lot of the time for the newest vendor programs or offerings,” he said. This business model veers from that of most distributors who are largely inbound and more fulfillment-oriented than demand generation-oriented, he added.

Another key focus, and one that demonstrates D&H’s dedication to the small business market, is hiring more salespeople who focus on the small business reseller. This includes both inside and outside field resources as the distributor’s customer base expands. All D&H sales reps are based in North America. The company has also added more downstream credit to the tune of $115 million per month this year, expecting that to eclipse $150 million per month. “That’s because we’re already tracking ahead of pace,” said Schwab. And, the company identifies vendors that add value to the small business market — e.g., Cisco, HPE, Lenovo and Microsoft — and work with them on custom programs and target initiatives to drive success for their small business customers.

The third key focus for D&H is education and training. “This is an area where D&H is very comfortable rolling up and our sleeves and helping our partners understand where opportunities lie,” said Schwab. Case in point: the company’s recent Fall Mid-Atlantic Show, in years past an order-writing show and now primarily …

… an education and training show offering more than 18 hours of training for free.

Courses target the business owner, their system engineer or both. Some examples of recent seminars: “How to Set up a Digital Signage If You Don’t Currently Have a Business Practice” and  “What’s the Financial Model for Cloud Services and Monthly Billing?” Then there are vendor-related courses, such as those on vendor partner programs and “How to Leverage Cisco Meraki and Grow Your Business,” for example.

The training focuses on why partners would want to sell a particular technology, including information on the market opportunity; D&H then helps partners go to market using their partner services program to create free, custom end-user demand vehicles. This, in combination with a manufacturer’s lead generation gets passed on to loyal, local partners who are a match for that technology.

In addition to partner training at their events, D&H offers weekly training webinars that draw 100-300 resellers, meets with partners in different cities and does surveys to find out what kind of education they want. D&H will run deep-dive, three- to five-hour training on different vertical markets or technologies.

Speaking of vertical markets, D&H just announced that it bolstered its line card for the education vertical with virtual and augmented reality solutions, ushering in “The Classroom of the Future.” Partners can expect to see streaming webcast trainings and VAR engagement events. D&H’s latest Solutions Lab webcast is, “VAR Curriculum: Tech for the Future of Teaching.” The distributor is also offering preconfigured Virtual Reality Kits, or customizable product bundles, around the Google Expeditions platform, including VR headsets, routers, cases, tablets, smartphones, monitors, etc.

Henry Ngo, senior vice president of sales and marketing at Golden Star Technology (GST) admits that his company works with multiple distributors but is clear as to why D&H is on that list. “D&H provides the cutting-edge types of solutions that GST looks for,” he said. “We can’t look stale.”

Expanded educational offerings of the kind that D&H recently announced keep partners like GST on the cutting edge, Ngo noted. He also pointed out that D&H is the leading distributor for endpoint devices and Chromebooks.

“D&H also provides good turnaround times; we rate our distributors on…

…accuracy as well because things move very quickly and we have to make sure that everything that comes across my team is complete and accurate,” Ngo said.

GST has been working with D&H for about five years and Ngo calls the relationship up and coming for his company. “The support level and resources that they provide for us when it comes to winning new business opportunities is good, especially since competition in the market is fierce,” he said. Fifty percent of GST’s business is in the public sector, education and municipalities. The reseller also focuses on the commercial and federal business markets.

D&H also makes sure its sales reps are trained on the technologies so they’re equipped to support partners. Less than two years ago the company began offering free technical support to resellers, before they sell a technology and offer a quote to the customer.

“We’ve taken a lot of small steps that have added up to a major effort in this area,” said Schwab. And, it’s one that’s paid off. Reseller business is up 13 percent this fiscal quarter; at the same time last year, it was up 11 percent.

D&H is beefing up its internal organization to support its partners. Peter DiMarco, vice president of VAR sales, who runs the reseller organization, was hired 2015 and this past August, Ken Fabozzi, senior director of VAR field sales joined the company. These two positions were net new to D&H.

“Peter and Ken have helped our organization evolve at a faster pace and have been very healthy additions to our already strong roster,” said Schwab. “They had different vantage points that helped us respond even more aggressively.”

Looking at the year ahead, D&H’s goal is to grow its number of reseller customers by 5 percent. They want to “help our manufacturer partners reach the long tail of customers,” Schwab said. And, that’s from a customer activation and partner program enablement standpoint as well as a revenue perspective.