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Channels—With or Without Support?

"My company is about to take on a few resellers to supplement our enterprise sales force. Some of my colleagues argue that our resellers should provide support, while others here want us to provide all support directly. A third group says we should leave the choice up to individual resellers. Any advice?"

—Norton from Nantucket                           


Norton—

Your question doesnít indicate what types of products and market your company plays in, so my response if pretty general.

It is my experience that you will likely see a mix of resellers that 1) have the capabilities and desire to provide various levels of support, 2) others will want to do all support, and 3) yet others will not have the capabilities and/or desire to provide support.

-Value for your company-
Your company most likely wants to do this to increase sales for your company, through sales opportunities in account profiles you are not currently able to crack, additional geographic locations, or simply more sales feet on the street. Enabling qualified resellers to provide support will either bring you to parity with other vendors that already provide this capability or give you a competitive advantage over vendors that do not.

-Value for the resellers-
The resellers likely want to add your product to their product portfolio and some will want to augment their revenue and margin opportunities through the delivery of support services. I assume the resellers want to provide the support so they can sell their own support contract (thereby capturing the revenue and margin). This also embeds the reseller deeper into the customer accounts.

Itís understandable that different groups in the company have different views and proclivities depending on their stake in the initiative.

In general, I believe you want to be able to accommodate the requirements of the resellers (to establish allegiance and preference for doing business with you) by having a defined program with a number of levels of participation they can qualify to provide without ending up with too many support models.

My advice is to:
  • Embrace this opportunity to increase sales but do so carefully. Not doing it will be seen as impeding sales.
  • Determine what level(s) of support is feasible for resellers to provide. This will depend on the complexity of the products, availability and robustness of support tools, training available, etc.
  • Try to build reseller profiles so you can determine how many there may be and their support capabilities and desire to support the products.
  • Establish minimum support capabilities criteria. (Must have call handling capabilities, have sufficient number of qualified/certified support staff, etc.)
  • Establish training criteria and possibly certification tracks. Be careful with this as it cannot be cost prohibitive for the resellers to complete but must ensure they have the knowledge they need to provide the support they are committing to.
  • The resellers will need ďbackline supportĒ from your company for problems/issues/updates they cannot resolve themselves. You need to determine if and more likely how much you will charge them for that support and how the fees are determined and paid. (This assumes of course that they sell their support contract to the end user).
  • Develop a financial impact analysis to understand the incremental sales potential and the burden on, and financial impact to your support organization.


  • -Additional Considerations-
    You didnít say what types of products are involved. There are certainly other aspects of enabling resellers to support your products depending on whether the product(s) are hardware, software, require/offer Professional Services, whether your support organization is a profit center, does service/support requires feet-on-the-street service people, parts delivery and logistics, obligation for warranty terms, etc.

    Hopefully this should give you a good starting point to stimulate thinking and develop more questions to promote internal discussion in order to understand the potential impact on the support organizationís operations and business.

    One last note... Timís response [see below] suggests you sell your support contract rather than the reseller sell theirs. While I agree that is preferable and easier to implement from your point of view, most of the resellers Iíve dealt with want to sell support on their own paper. I expect this may vary by industry and market segment.

    —Mike Oboczky
        760-420-1833
        mike.oboczky@cox.net





    Norton, some suggestions on this one...

    1.  Keep control of the revenues—invoice the customers directly and pay a fee back to the resellers. That way you control the cash flow, rather than having a reseller who may delay payment to you. This also enables you to be 100% sure of who is current on a maintenance contract.

    2.  Ensure there are strict guidelines on what they should do—define the first line support criteria, including headcount, how they should reports possible bugs, what actions they should have taken prior to sending a bug report etc.

    3.  Define the knowledge level required by the resellerís support team—ideally they MUST be trained / certified by you.

    4.  Define the hours you expect them to provide support to the customer.

    5.  Ensure your own team is able to handle second-line support for the dealer.

    6.  Mirror your own service levels and ensure the agreement allows you to periodically survey the customers to gauge customer satisfaction with the resellerís performance. Reserve the right to take back support if they consistently under-perform.

    —Tim Newton
        Vice President International Support
        Epicor Software (UK) Ltd.
        +44 1344 468286
        tnewton@epicor.com
        www.epicor.com





    [If you have any other advice on this question, please send an email to membership director Jane Farber at jfarber@asponline.com, and we'll post your feedback.]