y Daryl Reva, Senior Director of Channel Marketing, Fonality
www.fonality.com / Twitter: @fonality
It’s no secret that SMB adoption of cloud communication is through the roof. As customer demand shifts, resellers of business phone systems now face a new challenge: adapting their business to a model based less on upfront payments and more on recurring revenues from cloud’s subscription pricing.
The reseller benefits are hard to ignore. Monthly subscription fees are stable and predictable, eliminating the pressure to scramble for one more job at the end of the month. Less time and money are spent on truck rolls, and there are more opportunities to upsell clients. The potential is exciting, but as with anything, change can be hard.
It’s important to recognize that this business model shift does not have to occur overnight. Resellers can continue to sell the more traditional capital-expense products and make the transition gradually.
Here are three ways resellers can manage the transition to cloud services and make the most of the opportunities it presents:
1. Hire commission-only sales people.
Hiring people into sales roles that are paid only through commission allows resellers to free up capital to float the business until enough install‑base customers are on the new subscription model.
In the end, what the resellers are looking to do is build momentum. While they may not be in a pure growth mode, they do need to be able to grow enough revenue from cloud that it can soon start sustaining the business from month to month.
2. Partner with a vendor that will help you generate leads and close sales.
This is a business where success benefits everyone involved. When the reseller makes money, the vendor makes money. That’s why it’s important that resellers team with vendors that have programs in place to help the resellers succeed.
The vendor should be engaged from Day 1 with more of a marketing consultancy approach to help with lead-generation opportunities then help the reseller enter the market knowledgeable and ready to succeed. The vendor should also have a dedicated sales staff that follows the reseller through the sales cycle in a co‑selling model to ensure that they’re up and running from a true business perspective.
3. Diversify your portfolio of offerings.
Even after they transition their business models, resellers need to become providers of more than just one service. Customers are continuing to outsource more and more services. A reseller needs to own as much of a customer’s business as possible — everything from the network to the phone system. Failure to diversify is just asking for a competitor to come in and sell that company a service the reseller doesn’t offer. That competitor now has the opportunity to make its way into the rest of the customer’s managed services portfolio.
In all this, the goal for resellers should be to position themselves as trusted business advisors. That means owning the IT needs from the network all the way to the desktop and then to the cloud, changing not only the business model, but also the mentality. Resellers need to stop thinking of themselves as sales people with a product to push and act instead as consultants with a problem to solve.