In today’s market, independent software vendors (ISVs) are finding themselves at a crossroads when it comes to deciding how to go to market with their products. End-user and reseller channels each have pros and cons depending on what relationships ISVs want to build, how they want to engage, what resources are available and what market pain points they are trying to solve.
Broadly speaking, direct sales is a complex endeavor for most ISVs, while the reseller channel route tends to be more accessible. The strategy behind selling direct versus selling through a reseller is also influenced by whether the ISV offers just software, or a hybrid of hardware and software. There are also financial considerations depending on the profit needs of the ISV.
For an ISV interested in the reseller channel, there are certain helpful steps to follow.
The cardinal rule of the reseller route is avoiding channel conflict. This means that if an ISV is engaging resellers to sell products, it’s imperative not to sell to end users at the same time. Not only would this strain business relationships with reseller partners, but it would also confuse customers and dilute the overall sales footprint.
Building a reseller channel requires clear functional roles. With this arrangement, ISVs get to fully focus on developing the best software product possible, while resellers focus on sales and other functions that harness scale and demand. Specialization creates efficiencies, which is core to the concept of the reseller channel.
The second consideration for building a reseller channel is proper coordination and communication with reseller partners. Resellers need to understand the software offering, what it does, where it’s useful, who benefits from it — but above all, how it fulfills a unique market need. Successful companies are able to communicate a unique selling proposition to customers.
Reseller communication and coordination also extend beyond the initial transaction and into the customer service and maintenance functions. Resellers need to know how the software works to be able to effectively train end users and troubleshoot any potential issues that may arise with a moment’s notice.
The last critical element is equipping resellers with the proper branding, marketing materials and messaging to build awareness and increase demand among end users. While working with a reseller to get a product to market, the end user needs to still recognize the ISV as the provider and brains behind that product. Logos and brand colors play a role, but a consistent brand message repeated by reseller partners is paramount to creating the emotional connection and familiarity necessary to develop loyal customers.
Taking the right approach to building a reseller channel is critical, but maintaining it is equally as important. ISVs need to consistently be in the trenches with resellers, ensuring they have a complete understanding of the hardware side, and are equipped with all the materials needed to enter new markets and introduce new products. There are great benefits to be reaped by working in a reseller channel, but it relies on a symbiotic commitment to developing and maintaining the reseller relationship over time, which is ultimately reflected in shared growth.