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Your Resellers are Not Happy and the Problem is Your Value Proposition

Reseller Value Preposition

You may not realize it but many of your resellers are not as happy with you as they could be. There are several reasons but the number one issue is they are not making as much money as they expected. They are finding it tough to grow profitably with changes to the resale business, the competitive nature of the market and the little help they perceive they are getting from their vendor/partners.

ZS Associates completed a study of reseller satisfaction in late 2013 called “The Voice of the Partner Market Research” where they found that most VARs (Value Added Resellers) are less than 60 percent satisfied with the level of service and support they are receiving from their vendors. This is particularly true for cloud partners that are struggling to make their recurring revenue business profitable. There are a few exceptions – including resellers for SAP, Adobe, IBM, and VMware which are on average much more satisfied than their industry peers. The reasons cited for higher satisfaction levels include providing competitive products in the market, delivering a strong reseller value proposition, and a feeling that the vendor is taking action on their feedback – they feel that they are being heard.

As an executive responsible for driving revenue through your indirect channel, what can you do to increase reseller satisfaction levels and help them accelerate growth? It all comes down to your reseller value proposition. This is what are you offering your resellers to help them be successful and build a profitable business.

A Best Practice Reseller Value Proposition Illustration:

Reseller Value Proposition Illustration 6-26-14vf

Each one of these factors influences reseller satisfaction and success levels. These are the factors that your resellers consider as they make their commitments to different products and brands that they will get behind and grow. Below is a Successful Channels best practice blueprint for building a compelling and motivating value proposition for your resellers.

Best Practice Reseller Value Proposition:

1) Differentiated Products: Your resellers evaluate your position in the marketplace to determine if they will have an advantage and will be able to win more deals based on your strengths. If they believe that they can win with your product, they will commit more of their time and resources to the growth of your brand.

Success practices to strengthen differentiation perception for your resellers:

a) Industry analyst reports citing advantages

b) Case studies citing competitive advantages

c) Product comparisons highlighting advantages by competitor

d) Draft Request for Information (RFI / RFP) that highlight your competitive advantages

e) Market statistics that demonstrate acceptance levels of your product in the market

2) Profit Opportunities: Your resellers are looking for ways to improve their business performance and profitability. Providing them the opportunity and reward structure to achieve revenue growth targets is a proven channel practice to motivate growth. Sophisticated resellers will provide more resources and support for brands that allow them to earn additional margin points and / or rebates for achieving higher revenue targets.

Success practices to motivate growth with profit enhancements:

a) Establish revenue targets that are associated with higher reseller margins

b) Provide tracking tools to allow resellers to monitor their progress toward achieving higher status levels

c) Provide web-based modelling tools to allow resellers to simulate different revenue and margin scenarios

d) Tie other non-financial value to achieving these levels (e.g., support) to enhance attractiveness

3) Commitment to Success: Resellers want to work and commit to brands they believe are supporting their success. Brands / vendors that provide proactive business support and communicate well with resellers usually gain an unfair share of time and attention. Also, listening and valuing reseller input is critical to building trust and commitment from your channel partners.

Success practices that will yield greater reseller commitment:

a) Trained reseller account managers in collecting feedback with well-defined reporting systems

b) Regular (monthly) reseller input opportunities using an inside sales team or electronic methods

c) Reseller live chat services to allow them to reach an internal expert in real time

d) A bi-weekly “trusted advisor” proactive newsletter featuring what’s new and highlighting reseller inputs and actions taken based on these inputs

e) Reseller advisory council to have input on product road-maps, reseller needs, competitive updates and other business inputs

4) Business Management Tools: Running a profitable growth resale business is difficult today with margin and competitive pressures. Forward-thinking resellers are open to vendors providing business management tools to simulate their business growth model including P&L simulation, ROI calculators, and pricing and product packaging design options.

Success practices that will enhance reseller business profitability and satisfaction levels

a) Web-based reseller business growth simulation tools that allow resellers to do scenario planning for revenues, costs and profitability with your product or service

b) Web-based reseller ROI calculators to help estimate staffing, expense and capital investments, and forecasted return on these investments in your brand

5) Demand and Closing Deals: One of the most important success areas is assistance in generating demand for your products and helping to close more deals. Your resellers are expecting leads directly from you along with tools to generate more leads. They are also looking for proven tools to take interested prospects to closed deals.

Success practices for generating demand and closing more deals

a) MDF (Market Development Funds) available to resellers to finance marketing efforts

b) Templated marketing campaigns that your resellers can execute on their own

c) Full-service marketing programs that will generate nurtured and qualified opportunities

d) Web-based business case selling modules that allow reseller sales executives to create a customized business case and ROI for the purchase of your product or service in just 10-15 minutes

Your indirect channel partners think about your reseller value proposition every day when they consider where they’ll spend their time and attention. Resellers, consciously or unconsciously, consider every day how to spend their time and resources to maximize their business growth. They are most likely to spend time with products and brands where they feel they are supported and can be successful. Your reseller value proposition is the key to winning an unfair share of mind, share of heart, and share of time from your resellers to accelerate your channel business growth.

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