Bird-dogging for hard-to-find software
Vito De Cino can find hard-to-find software or easy-to-find software -- at hard-to-beat prices. Mr. De Cino is a marketing representative with Corporate Software Inc., a fledgling Denver company with a different approach to the intensely competitive business of software sales. CSI goes directly for the corporate market, shedding the expense of a storefront retail operation for the economy of marketing reps such as De Cino and well-used telephones.
The company passes its low overhead along to customers in the form of deep discounts on software prices, usually 30 to 45 percent on business programs that list for $300 to $600. While discounting is not new -- mail-order and catalog sales companies have done it for years -- CSI moves away from the crowd by providing an unusual level of service. It researches appropriate software for a given application, locates unusual programs, allows for a trial period, delivers quickly, and provides support after the sale.
For example, Randy Peterson, a senior buyer for the City of Colorado Springs, wanted an obscure systems utility program but didn't know how to find it. He called CSI, and after a number of dead ends, De Cino finally located it at a software publishing company north of Toronto.
``We buy all kinds of software'' from CSI, says Mr. Peterson. ``They are very helpful, very friendly. They go that extra mile, which is hard to find, and the prices are hard to beat.''
Another Denver customer called Mr. De Cino looking for a popular word processing program, Wordstar, to run on the IBM PCjr computer. Even Micro Pro, the software company that wrote Wordstar and rewrote it specifically for the PCjr, had been unable to locate a salable copy. Within 24 hours, De Cino found a copy and sold it for $100 off the $250 list price.
Such sales, however, are not the type that keep Corporate Software on the fast track. Companies that need 30 or 40 copies of Wordstar or Lotus 1-2-3 supply the bread and butter. De Cino spends much of his day going through the three and four personnel layers to reach the purchasing managers of companies such as Burroughs, Intel, and a Big Eight accounting firm (he won't say which one) that recently purchased 10,000 Apple Macintosh computers.
He and three other salesmen comb through lists of corporations for leads and generally sell CSI's level of service rather than the discounts. He usually gets an order for one or two programs ``as a test, and then they keep coming back.'' A really good corporate order comes in at about $5,000 but they average $1,500 to $2,000, he says.
The company was founded by Michael Rickord, who used to work in the Denver store of Software Centre International (SCI), a Los Angeles franchise company that sold software at discount prices. The Denver store persistently outranked other franchises for sales volume, says Mr. Rickord, but largely because of telephone marketing to companies, not showroom sales.
When SCI filed for bankruptcy, Rickford and his partner, Steve Fante, an accountant, decided to turn that sideline into a business with Corporate Software Inc. They opened a non-storefront office outside of expensive downtown Denver.
``We have a sub of a sublease, here. Our rent is $6 a [square] foot,'' compared with about five times that for a downtown storefront. Furnishings in Rickord's are sparse at best: a desk, two chairs, a tiny TV set, and no art, save a poster of two battling buffaloes -- captioned ``Bring on the competition.''
``I have that poster in every office,'' he says, and it marks the tone for his company. He sets a fairly thin profit margin on the software and then lets the salesmen mark the product up as much as they want, or dare, for their commission. Rickord also knows how to save a bundle of advertising costs. He does not advertise.
``There is a misconception in this business that you need to do a lot advertising to make sales.'' He tried some ads in the two Denver dailies and the Wall Street Journal, but with minimal results. ``I can take those advertising dollars and target them very specifically in telemarketing, rather than take the shotgun approach of advertising.''
The company has opened an office in Dallas and plans another in Phoenix, Ariz., within the month. Rickord wants to concentrate largely on the Midwest and Southwest, ``secondary markets like Omaha, [Neb.],'' he says. ``I think there is a tremendous market in those kinds of cities. People in the Midwest are much more interested in service than on the West and East Coasts.''
Gina DeMiranda of Future Computing Inc., a Richardson, Texas, market research firm, notes that most software discounters miss the corporate market. ``Large corporations are accustomed to a very high level of service. That is what will make the difference to anyone trying to sell to them. A lot of discounters don't have the capacity to do the necessary research. They make recommendations based largely on what they have in stock. . . . When you sell to a corporation, you have to be prepared to do a lot of hand-holding.''