It’s one of the oldest concepts in the channel: Distinguish yourself from the competition with the special value you add to your product.
But what happens when what you’re selling is that value? Your most effective channel partners sell their customers the value they bring to them, not the features. And they define that value in the context of the customer. So, what exactly is the value to the customer? Help your partners exceed their goals this year by showing them how to articulate the value your products and services bring to end-customers. Additionally, show how their services add even more value to that! Customers invest in outcomes, not speeds and feeds.
What do you want your channel partners to sell? What will give them the greatest likelihood of success and create a true win-win for everyone?
If your immediate answer was “my products” or “my services,” you’re selling yourself and your partners short.
It Has Always Been All About Value
Forty years ago, when the IBM PC was new and everything sold at list price with 41% margins, resellers quickly became “value-added resellers (VAR).” This meant they delivered additional value with the computer to compete against other resellers who were all selling at the same price.
Sadly, for the channel that halcyon period lasted only a short time. But the focus on value never changed. Customers wanted that additional value. Whether it was installation services, configuration services, consulting services, or others, customers were neither able nor desirous of doing those things themselves.
Even back then, smart resellers quickly shifted gears and started selling those valuable services. Knowing it would take customers who were accustomed to receiving them for free to get used to paying for them, they transitioned from being resellers to being service providers. As the margins on products spiraled down, they saw the survival of their margins dependent upon selling the value of their services. That hasn’t changed over the past 40 years.
Citrix may have been the first to introduce the idea. Since they had given catalog sellers better volume margins than they were giving distributors, they introduced the “Flex” program. This paid a substantial percentage of the sale price of the software to the reseller who closed the deal even if the customer bought it from a catalog.
Today, Microsoft refers to their co-selling program bringing tens of thousands of new “non-transacting” partners into their program every month.
Let’s Start Over
So, we return to the first question: What do you want your channel partners to sell?
You want to encourage every channel partner to sell the value of your product or service. Customers do not buy what your product is. They buy what your product does, and most especially what it does for them!
Channel veteran Richard Losciale always reminds us that everybody has the same favorite radio station. WII-FM, “What’s In It For Me?” radio.
Customers don’t really purchase technology products and services, or even lease them. They invest in technology. They invest expecting a great return on those investments. That return comes to them either in the form of reducing their operating costs or increasing their revenue, or both.
Your channel partners must be able to translate all the features, functionalities, and capacities of your products and services into how much value they contribute to increasing and accelerating the customer’s return on their technology investments.
Translate Value Into Your Marketing
Now is a good time to review your collateral, your call scripts, and all your marketing content to see how much of it speaks about your features and benefits, your speeds and feeds. While a knowledgeable technologist might be able to interpret them to approximate your value proposition, the people you’re marketing to cannot. Don’t just cite the statistics, translate them. Translate them into how they improve operations, how well they promote sales, build productivity, accelerate processes, and what all that turns into at the bottom line.
Your end customers can’t afford the time cost of a bad decision. They need assurance that investing in your products and services will actually bring the return they require. When your channel partners can demonstrate to their satisfaction that your solutions bring the highest value, you’ve built a great channel.