Reselling standard product suits won’t generate growing revenue.
Resellers often have one or two core, stand-alone products that they sell to customers. On the top of those solutions, they most likely resell product suits like Microsoft Office 365 or Google Apps. But, selling standard office packages doesn’t generate maximum profits. The solution for improving this scenario is forming partnerships with independent software vendors (ISV) and bundling their software on top of initial offerings for higher profit. ISVs bring additional value to standard product suits. However, many big companies ignore the vast business potential of vendor partnering due to false expectations of difficulty. In actuality, the process is simple. This is because ISVs build their solutions in the cloud or are born in cloud apps. This means they have integration sets called APIs. These APIs can rapidly connect with other product suits and easily exchange information. The APIs utilize vendor services, so more focus can be allocated to managing subscriptions. This standardization makes communication exchange and integration fast and painless.
Why should you partner with an ISV?
1. Fulfilling Needs
Your customers’ businesses are constantly scaling. Therefore, their needs grow and evolve. At some point in time, traditional core offerings won’t suffice. Modernized companies must deliver what customers need, not whatever is currently in stock. Customers will only buy if proposed offerings resonates with that customer’s desires.
2. More Services = Value
Additional services, e.g. new vendor solutions, present higher value to customers. This generates and sustains additional sales.
3. Expanding Market
Let’s say that you only work with companies that have a minimum of 100 employees. This may be because provisioning smaller organizations doesn’t generate as much revenue. But, if you offer more services/solutions with additional pricing that are delivered to companies with fewer employees, the market will expand without diminishing overall income.
4. Reducing Churn
Let’s imagine that you have one service, which your customers buy and implement. Then, they train their employees on using it. But what happens afterward? Those customers won’t need you anymore. However, if you resell 10 vendors and their proprietary services, it won’t be easy to transition to different resellers with better price offers.
What is the Right Partner as a Reseller?
Understand your business field, area of expertise, catalog, and the platform you're working with.
1. Evaluate your position
Start with the marketplace. If you resell Microsoft Office 365, then look for ISVs that integrate with Office 365. That helps define the available scope.
2. Research the ISV
Try to fully understand the solution you want to add to your catalog. Talk to customers already using it for firsthand feedback. These conversations help with comprehending the needs and values the solution presents.
3. Assess the vendor’s organization
Get to know the company that you partner with. More specifically, analyze what their sales channel looks like. If the sales team is too small, you may end up doing most of the work yourself. But if the sales channel is too big (e.g. with thousands of sales representatives), it will be difficult for you to get air time and support for co-selling and deployment. Make sure that the focus is on the right targets.
4. Train your people
You need to do some robust training within your company. The best development is when sales teams start using the solution themselves.
5. Deliver mutual gains
Bring value to the ISV, too. To be able to be successful as a reseller, you need to give success to the ISV as well. Together, you bring value to the customer while building partner relationships.
How to design your bundles?
Now, if you have a pretty big solution catalog, it should be easy for you to make the fit between what you offer and what customers need. This bundling provides more value to customers by packaging different vendor solutions together under profitable margins. This makes sales go faster, as the different pieces of delivery no longer have to be explained.
When you are bundling, make sure that it is easy for customers to understand the value they get from the bundle. Sales teams must know how to present the most profitable package. Of course, an understanding of customer needs helps with the creation of bundles that fit their immediate needs.
Having a strong catalog will position you strategically in the market, differentiating you from other resellers. Having both tailored and customizable bundling options is a huge advantage over the competitors who offer standard, basic packages.
There are two primary forms of bundling. You can use the horizontal approach - taking standard Office 365 and mixing it up with a security or back-up solution.
However, customers prefer vertical bundling. Under this module, your organization has a specific team focusing on a singular field, like education, manufacture, etc. This system is geared toward creating specific bundles nurturing the needs of that individual industry. Let’s say you have great solutions in your catalog and know that your customer needs an educational solution. Simply make a bundle tailored to education and ensure that sales teams pinpoint the value of that vertical. It positions you as a unique player on the market.
There are major growth possibilities in partnering with ISVs. In order to do that, you need to offer value by exceeding customer expectations, both now and in the future. A successful company must be agile enough to follow big vendors in their transition to the cloud and consumption-based business models.
Good luck on the market!