Dealers emphasize service in response to downturn.

• Position: Computer dealers - Industry Overview

The current economic slump has forced many computer dealers to stress the service they offer in order to gain and retain clients.

The dealers say consumers are cautious about investing in equipment.

"People are shopping more wisely. I think they don't believe that the recession is over," says Hank Czapski, manager of Mikadon Computer Engineering Inc. in Thunder Bay, a dealer of Hewlett Packard, Novell and Autocad computer systems. "If anything, they are even more cautious than they were six months ago."

MORE SERVICE

The buyers' caution has been hurting sales, but the service business has increased.

"People are patching up rather than purchasing," notes Doug Nadorozny, president of the AMS Group in Sudbury, a dealer of NEC, Toshiba, Sharp and AST computers.

Nadorozny has expanded his firm's service department to capitalize on the increased demand for repairs and maintenance.

Nadorozny agrees with Czapski that consumers are not making any capital investments because they "expect things to get worse."

To compensate, both dealers say they are emphasizing service.

"We've really stressed service, particularly when it comes to closing a sale," says Czapski.

"You have to have customers who want to deal with you," adds Nadorozny. "You'll just be banging your head against the wall if you try to compete on price alone."

Nadorozny says manufacturers have narrowed the price difference between low- and high- end computers in order to generate sales.

"The industry narrowed the gap," he says. "The price for the high-end products came down so much that the prices for the lower-end products had to be slashed."

REDUCED MARGINS

Depending on the product and the dealer, price reductions ranged from five to 50 per cent, forcing many dealers to reduce their margins of profit.

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