Putting the “Sell” in Reseller Partnerships

Putting the “Sell” in Reseller Partnerships

Developing successful reseller partnerships can be the fastest, most cost-effective way to scale a business. The problem is that most reseller partners to do sell for vendors. Why? Because vendors do not fully integrate themselves into the reseller’s internal sales process to make their product “strategic.” Consequently, the vendor becomes a “portfolio” product for the reseller, not a strategic one. A product is strategic when the reseller mentions it to every customer. A product is portfolio when the reseller mentions it to customers when it is convenient, if at all.

Excluding LARs like CDW, Dell, Insight, Softchoice, etc., most resellers have between 30-35 products in their portfolio. However, the reality is that they actively market and sell only a small number of those products to their customers. This is because two of the 30 products most likely account for 80%+ of their revenue. For a vendor to become successful with these reseller, they must either displace one of the top two selling products or become the third strategic product. Otherwise, the vendor will just become product number 31 in the reseller’s portfolio.

Entering into a reseller partnership is easy; an agreement between two companies is signed. The reseller wants to increase the breadth of its portfolio and the vendor wants to increase its sales. Even though an agreement is in place, 80%+ of the reseller’s revenue is still coming from two products, which their sales force already knows how to sell. Consequently, the vendor must be highly focused and methodical about becoming part of the reseller’s internal sales process within the first 90-days. Otherwise, the chance of success is substantially decreased.

How can a vendor fully integrate itself into a reseller’s internal sales process? The vendor must continually be a good partner by investing in the reseller’s success. This means ensuring that the reseller’s sales force knows how to sell the vendor’s product. “People sell what they know.” It also means helping them understand that by selling the vendor’s product, they will make more money. “If it does not make dollars, it does not make sense.” Finally, the vendor must “snap into” the reseller’s business, not alter it or make it more complex. Five additional areas to consider include:

1 – Be Responsive. If you want resellers to work for you, be responsive to their needs. If a sales person from a reseller has a question, get back to them ASAP.  Help them be successful.

2 – Channel Management.  Resellers always need to be reminded about your product. Channel managers must constantly be in front of them being seen and making things happen.

3 – Create Excitement. Offer incentives or non-monetary gifts to your resellers’ sales force to build enthusiasm around selling your product. Incentives, especially money, are a great way to stay top-of-mind.

4 – Sell Together. Co-selling with resellers is common, especially in the early stage of a partnership.  Co-selling helps resellers learn how to sell to your product better and make money while doing it.

5 – Share Margin. Invest in your resellers’ success in the early years so they are motivated to sell for you in the scaling years. Sharing 30% of the margin is common; 50% if they are heavily engaged in marketing and sales.

Results from reseller partners tend to be binary. That is, sales either increase dramatically for the vendor or not at all.  Remember, when developing reseller partnerships, you are selling your company and yourself as much as you are selling your product.  Help reseller overcome the risk of partnering with you (i.e., you will not adequately support them, you will subsequently go 100% direct, etc.).  Reseller partners have a choice of vendors that they can partner with, make it easy for them to choose you.

All contents copyright © 2012, Josh Lowry. All rights reserved.

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2 Responses to Putting the “Sell” in Reseller Partnerships

  1. Steve Loften says:

    Like your writing. Keep up the good work.

    Like

  2. Pingback: Jack Ennes

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