This is part 2 in our Reseller Agreements & Partner Negotiations series. You can read part 1 here.
We had feedback from people on Setting Reseller Targets, Exclusivity, and the differences of SaaS in Channels. Let’s talk further on these points.
On Resellers Targets; I recommend agreeing on Activity Targets, rather than Revenue Targets. Tracking the number of Leads, Qualified Leads, Demos, etc is an immediate activity from the start of a relationship and keeps the focus on inputs and action.
The right activities produce the right results, new customers, and revenues. In monitoring activities, you are also in a better position to identify opportunities for improvement.
On Exclusivity, in part 3 we will outline the scenarios when it is appropriate, and how it can be managed to take the strain out of your discussions with resellers.
In part 1 of the series, we covered the following: Read it here.
• How creating your standard Reseller Agreement is a painful process for many people. Partner Agreements seem to be one of the first concerns for companies starting in partnering.
• How do you structure the agreement, commissions, bonuses, Exclusivity, targets, marketing funds, and more?
• Negotiating Partner Agreements shouldn’t be a barrier to starting a partnership, and negotiations don’t need to be confrontational, and
• Being prepared and confident with your Reseller Agreement is setting a fast and clear start to a potentially rewarding business relationship
In a recent Tenego Live Session, the Founder and CEO of one of our clients, Paul Montwill of Magico & ABCommerce, shared his journey in starting to work with sales channels. Click here to view the Live Session recording: Starting In Sales Channels – Panel Discussion.
Paul and his team went through the Tenego process with online training and advisory sessions to result in notable changes to their approach, thinking, and confidence in starting to work with resellers.
Magico is Paul’s eCommerce development services with over 300 successful eCommerce website implementations with many top brands and companies in his market.
Three years earlier, Paul decided to form ABCommerce to detach and develop their eCommerce Platform, positioning well against global platform companies in the space.
In that session, Paul explained his initial concerns:
• What are the typical reseller and referral partner commissions?
• How to structure reseller partner agreements?
• What sales targets should they set for partners?
• How many deals per year should they expect from reseller/implementer partner companies?
• How do they compete with the larger competitors’ solutions within partner companies? AND
• What might their sales revenues be through partners over the first three years?
Paul then outlined how his concerns were resolved with materials, training, and guidance to create their starting partner program, including Reseller and Referral Partner Agreements. Click here to view the Live Session recording: Starting In Sales Channels – Panel Discussion
Some further points when creating your first on Reseller Partner Agreement:
• Too many people blindly copy a template, without adequately understanding the commercial reasons for parts of the agreement.
• You want your agreement to represent the business relationship you want with your resellers.
• Limit time wasted, with unnecessary lengthy partner agreement negotiations
When starting in sales channels with your first resellers, you want to quickly create your materials, plans and agreements so you can focus on engaging the market. You may think you don’t have the time, or need for expertise, to create your initial reseller agreement, and that a template is enough.
Click here to get a Reseller Agreement Template
We want you to project confidence when dealing with resellers. When they see you committed, you are setting your expectations.
You may be managing not only your limited time but also your limited budget and may want to avoid hefty legal costs in drafting your agreement from zero. It’s important to define a commercial relationship within your agreement, keeping things as simple as possible.
A tough agreement will not get you more sales. Negotiating high targets doesn’t deliver high results. An agreement that fits the relationship will enable the partnership to work. The best agreement is one that goes into the filing cabinet and is never seen again.
In part 3 in the series, we will outline the scenarios when Exclusivity makes sense, and how to respond to a Reseller who requests it. I will also be covering what you should be looking for in your Reseller Agreements.
If you have comments, concerns, or queries on Partner Agreements and Negotiations, I’d like to hear them. So, do let me know.
Do send your comments or questions to us.