COMPANIES SHOULD OUTSOURCE VAR AND RESELLER DEVELOPMENT IN THE UK AND EUROPE

Develop a strategy for improving reseller performance

London [April 3, 2003] The economy is changing the way resellers are managed. During the previous decade, manufacturers and distributors found it relatively easy to build a successful network of resellers. The recent sharp drop in capital spending has caught most of these companies off guard. In todays market, companies are faced with the problem of finding the resources to effectively communicate new sales initiatives or to leverage sales incentives to include resellers in ongoing programs.

Typically a reseller network would be characterised as a triangle with super-channels on the top, Tier-1 resellers in the middle and Tier-2 resellers forming a large but lower-performing group at the foundation. Addressing a large and disparate group of resellers can be a daunting task, requiring a lot of legwork, and most manufacturers do not want their existing sales teams to lose focus on the Tier-1 Reseller base, often leaving the Tier-2 resellers in the dark.

Develop a strategy for improving reseller performance
The recent economic downturn has had a profound impact on the Tier-2 reseller group who are generally made up of regional system integrators. Although these Tier-2 resellers are often considered to be low performers, they are often becoming non-performers as they begin to lose focus and desperately seek new ways of obtaining revenue.

Typically manufacturers do not assign Tier-2 resellers a dedicated account executive, and are a resource that is hard for a manufacturer to manage" said Richard James, Delivery Manager for Cambridge, England based Consalient, Ltd, a business process outsource organisation. The smaller reseller has been left to prospect their own niche but can typically provides a small but steady stream of revenue for manufacturers. And considering that Tier-2 resellers often account for a significant portion of overall revenue through servicing select markets they are an essential part of a manufacturers market strategy."

Tier-2 Resellers have one thing in common; they are all seeking new sources of revenue. As manufacturers realign their product and service offerings to address the more competitive markets, these new sales tactics are often never communicated to the Tier-2 Reseller. This can result in lost sales as the Tier-2 Reseller is not aware of opportunities the manufacturer is making available through new aggressive marketing techniques such as rebates or special offers.

Outsource your Tier-2 reseller strategy
However, communicating new sales incentives and tactical marketing programs to the Tier-2 group is essential to maintaining a competitive position. James continued, It is not practical to build a in-house sales team to dedicate to this task, due to the long-term overheads associated with acquiring an larger workforce. The most agile solution to improving the performance of Tier-2 Resellers is through outsourcing sales while retaining control of the program through performance metrics."

Use of professional outsource services from Consalient ( http://www.consalient.com ) provides a very attractive opportunity to accomplish the goal of improving Tier-2 Reseller performance while controlling risk and cost. By applying specific program metrics, cost can be structured into results-based compensation and the manufacturer only pays for the actual services delivered," he stated.

Apply specific program metrics
Using performance metrics as a way of paying the outsource organisation ensures that the program is executed according to the strategic goals set by the manufacturer. As example; a program can be structured such that the manufacturer only pays per number of resellers visited, or against improved reseller performance, as a way of eliminating fixed costs associated with the program.

Citing some common program metrics for just 2 categories, program compensation can be spread across activity and revenue performance to improved revenue from the targeted resellers. Some examples are listed below:

Activity based metrics
·   Quantity of touches (existing resellers)
·   Signing new resellers (Tier-2 and authorised)
·   Converting competing resellers
·   Authorise resellers for strategic new programs
Revenue based metrics
·   Increase incremental revenue from existing reseller base
·   Improve order mix to include strategic products
·   Improve Average order value within the group
·   Improve average order frequency within the group
·   Create a results based partnership.

Using metrics such as these it becomes possible to establish a results-based partnership with an outsourced service provider. This minimises the risk to the manufacturer in paying for a under-performing sales program" James concluded.

About Consalient Representation
Consalient is a BPO organisation, which builds outsourced workforce solutions that maximises your impact in Europe- while controlling your operational expenditure. From sales and marketing professionals to field technical support teams, Consalient gives you an effective European presence.
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Consalient Professional Representation
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