Many companies are opting to offer reseller programs to improve service delivery and reach their target markets faster. When speaking of reseller or partner programs, we are not referring to affiliate programs. Affiliate programs and reseller/partner programs are different.
Here is an overview:
Affiliate programs: Here, you sign up affiliate partners (companies or individuals) to drive customers to your product. For every sale or lead generated, the affiliate partner is offered a commission. The affiliate partners cannot set their own prices nor do they offer support for the product. They simply drive customers to the vendor’s website.
Reseller programs: Here, you sign up resellers (usually companies with in similar industry that have existing customers) to help with distribution of your products in different markets. The resellers can set up their own prices and usually offer support and other value addition services to their customers.
Should You Start a Reseller Program for Your Business?
Not all SaaS products are the same. Reseller programs are more realistic for some companies than others. Generally, companies that offer high value solutions such as Enterprise Resource Programs (ERPs), Asset Management Systems, Supply Chain Delivery Software and other enterprise software benefit more from having reseller programs. In some cases small guys can benefit from reseller programs as well.
The general traits of solutions that do well through reseller programs include:
i) Physical Installation: The software may need to be installed on-premise and be integrated with other offline software and online services.
ii) Learning Curve: Software that have longer learning curves or that need intensive training to be fully utilized.
iii) Multi-purpose: Software that may carry out different intensive processes that have to be run in multiple locations and communicate with other in-premise and off-premise application.
Most software that fall in the above categories are meant for B2B customers. Examples include enterprise level applications such as Microsoft Dynamics AX, SAP, IBM Business Solutions and others. The vendors offering the solutions mainly serve business customers instead of individual consumers.
If your product is geared towards the consumer market, you may not need a reseller program. Instead, you can have an affiliate program.
Why Start Your own Reseller Program
Starting a reseller program can help you reach your target market quickly and generate more revenues. Moreover, your partners can sell your solutions in a better manner to customers that they already have an established relationship with.
Other benefits of starting a reseller program include:
Your resellers can market your solutions to their existing markets, hence improving your company’s brand awareness. While you can offer marketing guidelines to the resellers, most will prefer to pursue their own strategies based on the behavior of their established customers and target markets.
The net effect of multiple advertisers promoting your product is increased brand awareness and consumer confidence in your product.
b) Customer Support
If you opt to provide your product completely through resellers, you will save on resources that would have been used on providing customer support. While you will be providing support to the resellers, the cost of the resources you use will be significantly lower than if, for example, if you were offering support to 100,000 users.
c) Quality product
As resellers take the hard task of marketing your product, your team can concentrate on its core objectives of improving the product. With the reduced time and cost spent on customer support and marketing, you can have time to test new features, fix bugs, and add other innovative features that will offer your customers better value from the product.
What To Consider When Starting a Reseller Program
Companies looking to start reseller programs need to consider a number of factors that come with the programs. Typical considerations to be made include:
Discounts and Training
A common practice among companies with partner programs is offering resellers discounts for their software. You may also have to set the minimum market application price to prevent resellers from undercutting each other, and for the overall benefits of all the players involved.
Other things you may have to offer include:
- Configuration assistance and templates
- Free or discounted training for resellers
- Free software licenses for internal use and training
- Aggressive discounts on license prices or maintenance fees.
- Provide special marketing, business and technical courses free of charge or at a discount.
- Develop numerous training content courses to cover all areas of interest.
You need to provide comprehensive training and support to build and maintain your reseller’s expertise in your product.
Sales and Marketing Support
You also need to provide an assortment of key advertising resources that will help their partners reach their prospects. For example, you may need to allow your partners to use your company’s brands and logos on different marketing materials.
Other sales and marketing support you may have to provide include:
- Persuasive and informative presentations and marketing materials based on your content guidelines.
- Regular program communications
- Keep the partners up to date with upcoming events like important conferences and trade shows.
You need to offer pre-sales and post-sales support to your vendors. Your tasks may include:
- Providing configuration templates that will help resellers deliver specific solutions to their customers.
- Offering technical support through phone and web.
- Providing development tools to help resellers create their own add-ons.
- Providing on-site or remote support for important implementation processes such as testing or migration phases.
- Holding technical briefings, seminars and technical documentation.
The answer to the question on whether to start a reseller program for your business will depend on the type of solution you are offering. If your software is targeted towards B2B customers, having a reseller program makes sense. On the other hand, if you have a simple solution that targets the B2C market, a good alternative to a reseller program would be an affiliate program.