ISV Panelists provide advice from the trenches on how to create good reseller relationships.
Will Atkinson, President of CAP Software; Dan Chandre, SVP of Strategic Partnerships at Booker Software; and Jami Interdonato, VP of Business Development at RPOWR POS participated in How To Build A Successful Reseller Program, a panel moderated by Business Solutions Associate Editor Jay McCall as part of Business Solutions ISV IQ Live! Conference held October 6 in Philadelphia. The three ISV executives shared insights and advice on a wide range of topics, and highlights of their panel follow.
When it comes to starting a channel program, Chandre says, “Having a re-seller model is attractive because it's a great opportunity to lower your acquisition costs. But the first thing we had to do was look at our software and ask, ‘Is it re-sellable?’ It sounds so simple; you can just resell somebody else's software but you have to look at how easy is it for a third party to make your software acquirable, to make it on-boardable.”
The key for Interdonato is to provide education and training pieces for re-sellers, introducing them to strategic partnerships and helping them develop better purchasing power. He said RPOWER POS focuses approximately one-quarter of its development time on creating things for the reseller channel.
“I think something people don't consider is the split between revenue and services,” said Atkinson. “With the rise of the iPad, apps, and SaaS becoming a more common deliverable, it’s more difficult for the re-seller actually to make money. You can't expect a reseller to go promote a product, learn it, install it, and support it for $8 a month when they really want the revenue going back to the ISV and they've got a call center that does training and deployment and support. So now you've got a credit card rep basically dropping an iPad off with people. That's not a re seller, that's almost a referral relationship.”
It’s also important to provide the necessary resources for creating a re-seller program. Chandre said Booker Software used a platform to manage both the referral and reseller process into their application, and then allowed re-sellers to monitor the progress of their clients and compensation. Atkinson added, “It was really an evolution. We didn’t say, ‘Today we are turning on our re-seller program and the tools are built and everyone has got their logins ready.’”
When it comes to finding an ideal VAR, Chandre says, “It starts with value. There are tons of people out there that can offer to re-sell your software, but unless they can add value, they don't then have the opportunity to create a unique value proposition.” The common theme is you really want a value added re-seller and not just the referral company out there.
“When you put your toe in the re-seller water,” Chandre said, “a couple of things are going to happen. They’re going to come to you and you’re going to go to them. It’s really important to have a criterion in the beginning of what’s going to make the right type of reseller.”
Geography is a factor as well, as Atkinson explained. “Ninety-nine percent of our re-sellers are local. And as a value back to the re-sellers, we don’t put them in competition with each other. So, you can’t go to our website and sign up as re-seller and have five CAP re-sellers in Philadelphia. There’s going to be one in your part of the state.”
Creating contractual agreements was another topic the panel covered and the three participants agreed that, while contracts are important they should be short, sweet, and to the point. A 40-page legal document isn’t necessary; aim for a two-to-three page contract that establishes expectations without burying them in legal jargon. As Atkinson says, “The most important thing is keep it simple and understand what your values are.” Contracts should also aim to avoid channel conflicts and be flexible.
Pricing is important in developing the re-seller channel. Chandre explained he based his pricing on his acquisition costs through the direct channel, stating, “Let’s say it cost me $2,000 to acquire a customer. If I can incentive properly a re-seller channel at cheaper than that, it’s a win-win and everybody is doing well.” But costs are just benchmarks. Flexibility is the key, according to Interdonato, and it needs to allow re-sellers to make money, too. “The more money they can make with my product, the better off I am,” he said.
The best practices for on-boarding re-sellers includes, “Support, support, support, support, and more support,” according to Interdonato. “Communicate as much of it as you possibly can.” Atkinson added, “If you’re going to have a successful reseller program it’s not going to be an organic side project that just works. You’ve got to be invested in making it work and that means invest in it.”
Ultimately, Chandre says, “The cost of direct sales is very high and building a sales force of 50 people to scale is not easy. It’s economically challenging as well, but I believe in re-seller programs. My big one word of caution is to be careful who you partner with. They are your representative in the industry; the face or your company who you have very little control over so be sure to do your research. Make sure the people you are partnering with are going to maintain the integrity you spent a lifetime building in your organization.”
Interdonato added, “If you’re going the resell channel route, commit yourself to it. You can’t dip your toe in it. Support and communication, I think, are the two biggest things we look at. Be available. That’s really the bottom line; be available for them anytime, anywhere, whenever possible.”
Chandre says the key is investment. “You have to invest your time and really look at what you’re successful with already, making sure you can scale. So it’s the 24/7 support person, or it’s the new account reps that don’t have any direct selling focus. Their only job is to sit there and wait for a reseller to call and ask that same question for the 12th time and do it with a smile on their face. “
Will Atkinson is the President of CAP Software, a POS software company based in Fort Worth, TX founded over 30 years ago. Will has more than 14 years of experience in reseller channel management and channel sales strategies, and he manages more than 80 reseller relationships in the U.S. and several foreign countries.
Dan Chandre is the SVP of Strategic Partnerships at Booker Software in New York City. Booker is a business management software platform for appointment-based companies that launched its reseller program in January 2015. It has already grown it to account for 25 percent of their total sales.
Jami Interdonato is the VP of Business Development at RPOWER POS in Scottsdale, AZ. RPOWER is a POS software solution for the food service industry and won the Business Solutions Best Channel Vendor award in the POS software category in 2015 and 2016.