CDW Thrives in ‘New’ Market

With $1.8 billion public sector sales comprising more than a quarter of its total revenue in 2006, multichannel computer products marketer CDW nevertheless was slow to capitalize on one of its biggest resources. Founded in 1984, CDW didn’t aggressively market to federal employees until 1998, missing out on a market that now represents more than 25 percent of the U.S. gross domestic product and more than 4 percent of the world economy.

At the Amtower Summit on Selling Products to the Government held in Baltimore earlier this month, CDW’s Director of Advertising and Marketing Operations Jim Garlow outlined how his company broke into the government market. Below is a four-step breakdown of how CDW targeted the market and penetrated it successfully.

1. Focus on service. The company created joint sales teams that partnered “inside” sales account managers with field sales executives to focus on customer groups (e.g., Department of Defense, civilian and independent agencies; system integrators and prime contractors; and by state and school districts). The company is fanatical about providing well-informed sales agents for its customers, Garlow said. New hires are subjected to a seven-week training course, dubbed “CDW University,” plus ongoing weekly training on new products. The sales team also is backed by technical experts at the company’s Vernon Hills, Ill., headquarters.

2. Segment-specific marketing. The company targeted print ads in such publications as Government Executive, Washington Technology, GCN, Stars and Stripes, Governing, and Federal Computer Week. It also began publishing its own federal trade magazine, FedTech, to create relationships with its potential customers. Marketing yourself as a source of knowledge in an industry helps you sell in that industry, Garlow said. At CDW the segmentation approach is broken down into four steps:

* Solid value proposition — world-class inventory (more than 200,000 products offered); same-day shipping as long as the order is called in by 5 p.m.; enhanced e-commerce customer information (order status, purchase history, serial number tracking); a highly trained sales team; and competitive pricing via a low-cost structure, efficient distribution and purchasing direct from the manufacturer.