Small Customers, Big Benefits

Kristen Tsitoukis admits she’s no technology expert. But she understands the hospitality business, having worked as director of operations for a major hotel chain for more than 14 years.

So when she came up with the idea to build interactive kiosks and digital concierges for use in hotels, sports venues, and resort locations around the world, she didn’t let her lack of technological expertise slow her down. Instead, she sought an electronic components distributor that could not only provide her with the equipment she needed to build her products, but that could also serve as a trusted business partner to a small and growing company.

Tsitoukis is president and CEO of Pennsylvania-based Send A Message Inc. (SAM), a technology-based hospitality company that provides a range of services to resorts, hotels, and sports venues across the globe. She founded the company in 2007, and today she has five employees who create, sell, and implement products such as SAM’s custom postcard kiosk, which allows travelers to create personalized postcards from popular vacation spots and attractions.

Tsitoukis says she couldn’t have gotten where she is today without the help of Avnet Embedded Solutions, a division of Avnet Electronics Marketing, which provides the touchscreens, PCs, keyboards, cables, and electronic components to build her products, as well as the design services and ongoing support required to help grow her business.

“I am not an expert in technology or software, but I had this idea and I pursued it. So I needed to find someone that was extremely knowledgeable, large enough to assist a small company like ours, and had a sincere interest in the project as well,” says Tsitoukis, who started working with Avnet Embedded about a year and a half ago.

“Avnet really just stepped in and assisted in any way I could possibly have wanted. Things I never dreamed they could help with, they did,” she says.

Although it seems as if all customers demand “above and beyond” services these days, small original equipment manufacturers (OEMs) and contract manufacturers such as SAM often require the flexibility and extra attention to detail that Tsitoukis describes receiving from Avnet Embedded.

With limited resources and tight budgets, small customers are seeking customized services, innovative solutions, and close relationships more than ever, and electronic components distributors large and small are finding ways to comply—by providing design engineering assistance, coordinating outsourced manufacturing, customizing inventory, kitting products, and simply being “in it for the long haul,” explains Chuck Kostalnick, senior vice president of Avnet Embedded Americas.

“This isn’t a business you can come into and win a customer and lose a customer,” says Kostalnick, pointing to customers’ need for systems and solutions, not just pieces and parts. “We win an engagement and keep them for a long time because they are complex. There’s an investment required to help a customer get to where Send A Message is today.”

Service Is The Answer

IBS Electronics has sharpened its focus on small OEMs and contract manufacturers in the United States over the last six months, trying to capture a bigger piece of that slice of the market. The California-based independent distributor has eight locations internationally, many of them in Asia, and has been using its global reach to provide customers with the latest service demands and solutions, including aggregating a wide range of electronic components onto one order and sourcing alternative products from around the world.

“The first thing we have seen recently is that a lot of [these customers] have limited purchasing power, so when they have production runs, they want a distributor that can do the outside service of full kitting instead of them going to 10 or 15 different suppliers for what they need,” says Rob Tavi, IBS Electronics’ managing director. He points to customers working on simpler projects that require fewer components on the board, in particular. “Many of them are also asking for alternative sourcing in Asia. Most of our sales and purchasing staff are in Asia, so we can help with that, too.”

Tavi says his first point goes directly to the bottom line, helping customers reduce the number of suppliers they deal with while streamlining the entire purchasing process. This not only removes headaches in small customers’ purchasing departments, it also improves the distributor’s position as a valued partner in the supply chain.

“Customers can come to one place and have us source all their components,” Tavi emphasizes. “And many of them are asking us to do a lot of stocking for them [as well as] kitting and shipping.”

Adding value is at the heart of serving small customers, and Tavi counts IBS’s ability to find alternative product sources in Asia as a key value-added service. Small customers are looking for this kind of service as a way to reduce their costs on basic components—particularly electromechanical and passive components, Tavi explains. IBS will qualify the parts, design them in, and provide support after the sale.

IBS has also developed its alternative sourcing capabilities into “vendor qualification” services in which the distributor will audit a particular company in Asia that customers have identified as a potential source of components. Often, Tavi says, manufacturers based in the U.S. will find a source in Asia, but are unable to verify the company’s product quality. IBS will come in and audit the source, potentially becoming the distributor of the product.

“In these cases, we take on the liability,” Tavi explains.

Such value-added services, logistics, and brokering represent 40% of IBS Electronics’ business today, while 60% is in long-term or authorized distribution business, Tavi says.

Service is the answer at Avnet Embedded as well, where Kostalnick emphasizes the importance of selling solutions. Avnet Embedded’s customers range in size, but many are mid-tier or just starting out, like SAM. Such customers build the same products again and again, and although they produce fewer of them, their distributors are an integral part of the production process, making the value of the transaction even more important to both parties.

“Our customers may not be building tens of thousands of systems a quarter or a year. It may be in the hundreds or thousands. But because we’re selling an entire solution, not a part, the numbers add up pretty quickly. It makes for a pretty compelling business model,” Kostalnick says.

In such “high-touch” situations, a customer’s size takes a backseat to its business potential. Tsitoukis recalls a situation earlier this year that reinforced her decision to choose Avnet Embedded as her embedded solutions partner—and made her feel like the company’s most important client.

Tsitoukis was invited to display one of her postcard kiosks at the Golden Globe awards in Hollywood this past January. She was to set up her kiosk where the celebrity attendees gathered about an hour before the event and leave it up for demonstrations throughout the remainder of the show and post-show gatherings.

Unfortunately, all did not go as planned.

Upon arriving at the event, she and her team started to set up the kiosk, which had been shipped across the country. They quickly noticed that the crate carrying all the kiosk materials—PC, touchscreen, cables, and so forth—had been damaged during transit. Everything looked intact when she removed it, however, so she went ahead and set up the system. But when she tried to demonstrate how to make a postcard, her computer screen went blank. It wouldn’t work at all.

“I remembered a specific meeting I had had with Joe Fijak [vice president, display solutions for Avnet Embedded],” she says. “He said, ‘Any time you run into a glitch, I will be there to help you.’ I thought, well, this is a glitch.”

Tsitoukis says she still can’t believe what happened next. Fijak was in an airplane en route to a meeting, but she was able to reach him and relay the problem. Without missing a beat, Fijak found a replacement screen five blocks away from where Tsitoukis and her team were set up and had it delivered to them right away.

“I missed the first hour of the show, but we had it up and running for the rest of the four hours we were there. If that’s not customer service, I don’t know what is,” she says.

“All too often, larger companies don’t get the best reputation for service,” she adds. “This speaks volumes to me because of my background in hospitality.”

In Need Of Ideas

In the spirit of partnership, small customers are also seeking ideas from their distributor partners—not just cost-saving ideas, but new ways to expand, grow, and improve their businesses. Tsitoukis points to a deal her company has with Ocean Images on Holland America cruise lines.  

After installing a kiosk on the company’s cruise ship, the Eurodam, Avnet suggested finding a way to install simpler versions of the kiosk in other parts of the ship, giving passengers easier access to the postcard program. The distributor suggested installing screens that have the same applications as the full kiosk but without the bulk of the printer, allowing passengers to create their custom postcards from various locations on board and then send them to the main kiosk for printing later.

“As our technology evolves, Avnet is constantly bringing me different ideas and solutions,” Tsitoukis explains. “They actually get in the business of what you’re doing. They practically finish your sentences for you.”

The two companies have worked together to install digital postcard kiosks at locations in three countries, and they are now creating kiosks that will be in place for the 2012 Olympic Games in London.

“My goal is to be able to put these in as many resort destinations and sports venues as possible,” Tsitoukis says. “It’s a fun amenity for people to use. Everything is so personalized these days, yet you go in and buy a postcard off the rack… [our product] fills a bit of a void.”

Trading partners such as Avnet are helping to fill that void as well.

“If we get an order for 250 or 300 [kiosks], we would not be able to do it without Avnet. Through everything I do, these guys are instrumental,” Tsitoukis says.

Educating And Informing

Education plays an important role in the process, too. As Tavi explains, many customers are so caught up in their day-to-day routine—and hamstrung by limited resources—that they need a savvy, solutions-driven distributor to help them find new ways to save money, increase efficiency, and become more profitable. He says his company is focused on becoming an integral part of the customer’s operation and a long-term provider of information and solutions.

“It’s amazing. I’ve visited some manufacturers who, even though they are a $100 million company, they only have five people in purchasing,” Tavi says. “Because of costs, they don’t have the time to do the things they need to do to get good solutions. So we say, ‘We’re an extension of your purchasing team.’ And we educate them on sourcing, outsourcing, and these types of things.”

At the end of the day, many distributors say such practices make a big difference when it comes to building business with smaller companies.

As Tavi explains, “That’s how you build trust with customers.”

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