At this year’s ICT excellence awards, CMS Peripherals walked away with the best distributor of the year award. For a company almost touching its thirtieth year in business it seemed a fitting return.
In 2004 the company’s growth met its expectations and revenue at a group level was up by 15 per cent at f127 million Vs f111 million in 2003.
Michael O’Callaghan managing director of CMS Peripherals believes that what differentiates CMS from its competitors and enabled it to win the ICT award is the company’s approach to its customers from a value add partner perspective. In addition O’Callaghan said its wide range of brands was also a deciding factor. “We try and offer our customers a solution rather than push a brand on them. We take the long-term approach with the customer. So I think it’s the customer service element that distinguished us for the awards. We know there are other distributors that offer a wider breadth of product, but they may not have the knowledge that we do.”
O’Callaghan is a firm believer in building long-term relationships with his customers to ensure repeat business. He said the company do this through competitive pricing and, what he terms as, “best service in the industry”.
The company has segmented its business into three distinct areas. The first segment is consumer electronics and retail – this is fast moving volume product, encompassing everything from storage devices to MP3 players. O’Callaghan said this sector is a very price sensitive, fast moving channel.
Secondly, at the higher end, the company has its enterprise area where it provides high-end storage solutions where the end user is, for example, a bank or a major telco. “If you’re working with a reseller on a solution in this area you have to come up with a proposal that’ll meet their needs for two-three years,” said O’Callaghan.
Thirdly, the company has what it terms as its traditional business. “This would be commodity and media which is very price sensitive and volume based,” explains O’Callaghan. “The strategy we’re taking here is that we’ve just launched an e-commerce site which should give the customer another route to purchase from CMS and give then competitive pricing especially against some of the UK web sites.”
Stimulating the market
With the SME market growing throughout Europe, supplying goods and services into this market has become more important than eve. CMS has a number of strategies for stimulating the SME market to whet the demand appetite. “In the SME space the way we focus on stimulating the market is through visits from our business development managers bringing the customer new products.
“That’s one of the key differentiators. We have to be going to them with something that’s different. In the SME space you have a lot of traditional products and brands and we need to bring them new offerings saying ‘in addition to your lower margin offerings there’s this potential to make more margin.’”
Adding value seems to be a mantra with CMS and O’Callaghan keeps coming back to it as a corner stone for the company’s success. “You add value by understanding the customer needs and by not pushing product on them. In many cases you can lose a long-term relationship by making a short-term gain. You need make it profitable for both yourself and the customer. The supplier, reseller and distributor are all in business to make profit so if we’re not helping them do that then there’s no benefit to them in dealing with us.”
Reseller promotions
Another area where CMS like to give the market a jolt is in reseller promotions. O’Callaghan said they’re a very good way of creating short-term stimulation in the market but he is also cognisant of the necessity of using them as a brand promotion tool. “What we would look for out of those promotions is making sure we create brand awareness – so you create a long-term pull through.
“Sometimes the promotion is based on price or incentives to the reseller to push a certain brand. From our point of view we need to create the brand awareness rather than the short-term price issue of the promotion.
“It does stimulate long-term growth for the manufacturer as well because it creates an awareness of its brand.
New products
Last year CMS introduced a variety of new multimedia product to market. So far these products have been running out the door with iRiver, in particular, being a shining MP3 light. “iRiver has been going very well,” said O’Callaghan. “Worldwide it would be number three in the MP3 space and we’ve exclusive distribution for Ireland and the UK.
“A lot of retailers who’ve taken that brand have been very loyal to it and have seen that as been where CMS adds value to them because we went to them with the brand, brought in the manufacturer in, put in a lot of in store presence so the brand could get out there and it’s established a strong foothold in the Irish market.”
Into the future
Looking ahead, how does the company plan on “defending” its coveted title as best distributor. What will be different about its entry into next year’s awards and what can the judges expect to see? “What will be different is we will have introduced a number of new products which should add value for our resellers,” said O’Callaghan.
“We will have put in place our new e-commerce strategy, which should take some cost out of the chain and give our customers more flexibility when ordering.
“Along with that we’ll continue to focus on the customer, profitable relationships and bringing new brands to the market that build those profitable relationships with our customers and suppliers.
“The company will be looking to double digit revenue growth in the coming year and have a strong emphasis on creating lead generation for our resellers and new technology for our retailers.”
Sounds like CMS Peripherals could well be in with a shout at next year’s ICT Excellence Awards.
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