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What Can Small Services Vendors Do About Preferred Vendors?

Volume IIEntry 6 of 67 in 20133 min read9 comments ↓

Written by Gloria Metrick on . Published as written. It may not reflect how these systems work today.

For the past few days, I'd been blogging about the change between the old days when customers would look for services firms to implement their systems and the current times when more and more of them use preferred vendors. Companies such as mine, GeoMetrick Enterprises, must find ways to continue to do business. Small businesses in our industry sometimes struggle to find ways to get new customers and some of them will ask me, "What can we do about preferred vendors?"

Answer:  Nothing.

Seriously, there's nothing you can do about the fact that so many customers are locked-into these systems. Some customers will tell a sad story of how their project needs went unfulfilled because the preferred vendor couldn't or wouldn't get them a resource at the same time you had people who could have filled that spot, but there's nothing you can do about it. Companies who choose these vendors have their reasons and, except for those who leave openings for specialty vendors, aren't going to be flexible-enough to let you service these customers, as much as both sides might want it.

This then leads to the question, "Then, where do we find other business?"

Answer: That also gets harder to figure out, every day.

In the "old" days, we would meet at industry conferences, user group meetings, and these types of places. We now have fewer conferences where "everyone" attends -- more smaller ones -- and fewer people seem to have a travel budget. The other day, I mentioned that, because of this, customers don't tend to meet each other in-person to share information such as referrals the way they used to but they also don't meet the smaller product and services vendors, either.

One problem with being a small business is that you can't try lots of things and see what works. Small businesses don't have the budget nor the personnel to use this tactic. Additionally, whatever the next small business is doing might not work for you. We continue to read about how social media changes the face of business, how we all have to be in FaceBook, Twitter and such, but if every small business spent all their time focusing merely on being active in all these tools, I doubt we'd have enough time left for anything else. Unlike consumer products, our customers don't necessary "hang out" in these places. However, I do think it's good to try some of these tools to understand how they work and to see their potential, but each business owner has to find the things they are most comfortable with and most successful.

The old model held that by speaking and writing, you would drum-up plenty of business. Unfortunately, there are fewer places to speak and fewer people see the talks that are given. With the plethora of blogs, I no longer see much of a return from writing articles for industry magazines, either. Thus, the old formula has been shattered. It's no longer that easy, if that was even ever "that easy."

In the end, if it really was all that easy, everyone would be doing it. To all the small businesses out there, keep your chins up. For those who ask how I do it, I think it's just that I'm such a dyed-in-the-wool Midwesterner. Maybe there's just something in the water, but the idea of giving up just doesn't seem like much of an option.

Gloria Metrick
GeoMetrick Enterprises
http://www.GeoMetrick.com/

The conversation

9 comments from 2 people, February 1 to February 5, 2013. Gloria replied 5 times.

  1. Nancy Ridenhour

    Have you thought of making videos ofyou doing presentations that are a few minutes but teach something? If you do them standing up, it shows that you can think while standing. You can even do the video in your study and put it on the web. I check these on computer issues periodically

  2. Gloria MetrickAuthor

    Thank you for the suggestion, Nancy. But the next question a small business will have would be where to put it to get out in front of new potential customers? How do they get their videos in front of people and to get them to look?

    Back to my comment on articles and magazines: I have stopped writing for industry magazines because I no longer see business leads from doing that, and I haven't for quite some time. Thus, as a business, have decided to focus on creating a following for myself in this blog. But for someone who doesn't write, who wants to do a presentation, what do they do? If they have a company web-site, that is a good place to put it, but how do they get the traffic to come to it?

    I think it was 2010 and I partnered with another company to do a webinar. It's a company that creates webinar content. It seemed like a win/win -- they would do the technical side and invite people and I would create the presentation. While it worked nicely, few people attended. While it was recorded, so that I could give it to others, I was then just handing it to the same people who already knew who I was. So, my effort to find a company to share the distribution with sounded like a good idea but didn't get me far in a world where there are so many presentations and webinars out there to compete with each other.

    This is where I decided just to focus on putting my efforts toward writing. For someone who wants to get their presentation seen, what do they do? One place they can post things is to LinkedIn. That is a place I think a lot of professionals "hang out" more than FaceBook or Twitter. Some will argue that FaceBook and Twitter have the sheer numbers, but it's not about total numbers but about how many view what you put out there. And this is why magazines fail to produce leads -- they have orders of magnitudes more readers than we might be able to develop for ourselves, but we can do surprisingly better for ourselves in readership.

    Keep this in-mind, those of you who are thinking about this: if you can find one new reader per month who might be a potential customer, that is better than writing and article that has a potential distribution of 20,000 people but where your material is so buried that, either no-one reads it or, just as frustrating, they read it but don't know who you are or how to reach you.

    1. Nancy Ridenhour

      I would think that even if you posted it on your website and gave it a title or on YouTube because that belongs to Google and may help in search engines. I have a feeling that what they are doing is posting and titling and then it comes up in the searches.

      But then again, it comes down to who is looking and how they are searching.

  3. John H. Jones

    I have been getting quite a number of folks who are independent labware consultants contacting me lately with the same sort of questions and topics you are bringing up.

    Here is a response I gave to one individual:

    My advice is to continue with the labware offers but start doing work on the side with other systems. Create multiple version of your resume to fit the situation. With recruiters looking for labware folks, you will need to keep your resume heavy on it.

    If you want to go outside of labware, you will need to put up a wordpress site and promote your consulting services in general for lab informatics.

    The problem with this industry for consultants is that the "Big" LIMS vendors pretty much only do Big projects and so they need talent from all over but it needs to be specific to their LIMS. The "Small" LIMS players already have their own staff and do not use contractors. This leaves the Big guys as the only viable option but it is limited because of the restrictions they put on experience.

    So my real advice is to break out of Lab Informatics and push into the Health Informatics space. It is very much akin and does not have the restriction the lab market has. You need to embrace open source and start learning all of the different Open Source apps that are available in the lab and health informatics space. Position your consulting practice to not just be a hired gun through a recruiter but take on lots of small jobs. This will be a struggle to make work but it will break you out of the labware mold.

  4. Gloria MetrickAuthor

    John, to be even more clear on what you said, but with regard to LabWare, they are particular about people doing LabWare work outside of their network. What I mean is this, for most people, if LabWare is your customer or the company in which you get your subcontracts from as a consulting firm, you usually cannot then also get your own LabWare work, too. There are VERY few companies that don't face this restriction.

    So, where you mentioned that a person or company wanting to supplement the subcontracts they receive from LabWare would need to get experience with other systems, that would be why -- because they can't just start using those LabWare skills to do non-LabWare-sponsored projects.

    However, the other option is to just break free from LabWare and sell your LabWare services, directly. First of all, do you want to start your own business and build up your own clientele? If so, I would urge anyone planning this to consider that business development is a learned skill -- projects don't drop off of trees -- this is the biggest thing that kills a person's business, is that they think they can merely be good at what they do and people will flock to them. New flash -- there are a LOT of us out there who are really good at it to complete with you, some are truly born sales people. While I envy these people, it doesn't mean the rest of us can't learn to do these tasks well-enough to run our business on a long-term basis (I'm almost at my 16 year mark, as an example).

    But let's suppose you're getting pushed-out of LabWare -- that you're not going because you want to but because you don't get enough subcontracts to make them a worthwhile customer for you, any longer. That doesn't mean you should start your own business. Consider getting into something else or possibly finding someone who might like to have these skills at-hand. You could stay in consulting but with some services firm that provides this skill, or go directly to work for a customer, and there are many out there wanting to find people with LabWare skills.

    Finally, to the person considering starting their own business with their own customers, remember that you'll have plenty of fixed costs to cover -- insurance of all types being the top cost, but also attorneys, CPAs and the like, at least initially, to help you figure out the contracts, tax reporting, tax laws, etc... Don't underestimate any of this, and keep in-mind the variable costs that you'll incur as you actually get customers -- all this needs to figure into your charges so that you can run a profitable business out of it.

    One more comment on taking your LabWare skills to start a LabWare consultancy, yourself: consider whether you have a non-compete. Some years ago, LabWare had looked into all the legal aspects of non-competes in order to get some of the people from their competitors and found that non-competes are truly difficult to enforce across state lines since many states have various laws. I wouldn't suggest taking a non-compete lightly, but am merely stating that you should ask a lawyer in your own state about what the ramifications are if you've signed one. Issues such as whether the state is a "right to work" state and such all factor in, so it's worth paying an expert to figure this out for you.

    1. John H. Jones

      Yep, all of that is very true. Thus the last part of my advice which was less advice and more of a reality check, that is to say... It will be an uphill climb.

      It occurs to me that Thermo or Labvantage would be prime candidates to start cherry picking Labware consultants. My observation is that Labware success is due much in part to their network of both independent and dependent consultants. I am really hearing a lot of dissatisfaction in the industry with Labware from the consultants and I think that opens up great opportunities for Labware competitors.

      I generally find that folks start getting dissatisfied when the $$'s start drying up and this could be the case for labware consultants. So my thinking is, if the $$'s are drying up anyway, you may as well start looking for other options. I really think it is a mistake to be tied to any one company too much. Diversification is strength but it also requires a big investment and that may be too much for many consultants/contractors.

      1. Gloria MetrickAuthor

        And, while we're mentioning some of these other brands, let me throw in StarLIMS, too.

        As for the changes at LabWare, keep in-mind that, for many, many years, LabWare didn't want more employees. They absolutely did not want to start a services business. They did have just a handful of internal staff, after some number of years, but those who were doing implementations as internal people were usually or possibly always used for other tasks, such as training. They were possibly doing implementations merely to keep busy between writing manuals, training, and their other internal tasks. Really, I'm just talking about the US group, here, because each country does their LabWare business differently, where many people in the UK are not employees, but in Africa, I think that all the services people are employees. In any case, here in the US, it's quite recently, just the past few years, where LabWare has changed their strategy and decided to start their own services business. So, in the LabWare world, there's been a lot of talk about LGS (LabWare Global Services) and as to how it will affect things. Many of the people who were doing LabWare projects have worried that they will get pushed-out if they don't join LGS as an employee, but I don't know what direction that has taken.

        What I tell these people is this: if you're still getting plenty of work, don't worry too much, yet. Keep an eye out for a chance to learn other things, but it's hard to say whether they'll ever push any specific person out or not. It might depend who you are and what you're doing.

        And, I agree that being tied to a single product or skill is too limiting. I try to keep both my LabWare and my Sample Manager skills up-to-date in case one really dries up, but then I sometimes do BA (Business Analysis), product selection and other types of work. That's yet another way to expand skills. Some people like to get into training or validation, and those can be areas where there are just a different group of opportunities available. Another option for people to consider is to consider getting more into report-writing (e.g., Business Objects, InfoMaker).

        Another thought I'd had is that, since I've done much work with manufacturing systems and since I've worked with SAP and LIMS interfacing that SAP would be another good space to move into. Now, I'll be honest about this idea -- I've had no success and it seems truly saturated, but I'm just giving an example of other ways to look at this. If you start to think about other areas you have some expertise in, that might be an area to look into. In a lot of cases, you'll have a difficult time breaking-in, as I found with SAP, but the more of these a person considers and tries, the more likely that one of them will be the right fit at the right time.

        1. Gloria MetrickAuthor

          To mention a few more options for people to consider, Accelrys, PerkinElmer and IDBS. Also, into the health informatics, Oracle Clinical.

  5. Gloria MetrickAuthor

    John, while I agree that Healthcare Informatics is probably a hotter industry and possibly with more growth than Laboratory Informatics, (LI) these days, I'm not convinced it's any easier to break into.

    Just as an example, I recently moved away from the Cleveland area, where there is just a huge amount of work in that. Keep in-mind that that area is home to two massive health systems, University Hospitals and the Cleveland Clinic. While I never really got my feet wet into that area, did run into various people working in these areas, there. A couple things seem to be just as frustrating for them as with those in LI. FIrst of all, those big systems only want to work with their preferred vendors, it sounds like (sounds familiar, doesn't it?). Also, there are a lot of people with the skills these systems need and it there are people in that area who can't find projects to work on.

    One area that seemed super-hot was for firmware programming. While that seemed "hot" enough that people could start their own businesses servicing all the little companies around Cleveland (and elsewhere) that need this, mainly for medical devices, I think, but it's still probably something where you need some amount of the right contacts.

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