About 9 years ago Fishbowl started a reseller program. We patterned it after the standard model at the time where resellers, typically consultants, could reach discounts of up to 35% on the software based on sales volume. It was our belief that our resellers would eventually build up their expertise in Fishbowl to where they would feel comfortable doing their own demos and, through their own marketing efforts and word of mouth, eventually build up a clientele of potential Fishbowl clients that they could sell our software to.
That is, in fact, exactly what happened, but to varying degrees and with differing areas of focus. Some preferred consulting. Some preferred sales. Some did both. But the vast majority preferred to refer Fishbowl to their clients and let the Fishbowl sales team provide the demos and make the sale. As a result we changed our program to make it easier for the “referring” minded consultant to send leads our way. No requirements, no certifications. Just send us a lead and if we make the sale then we pay a 10% commission on the sale. And for our resellers, we began requiring they do all their own demos but we increased the potential reseller discount up to 50% based on sales volumes. The end result is that 99% of the consultants who work with us are referrers and around 1% are resellers.
Several years ago, Sage (a huge reseller of business software), made a similar announcement, and last year, we at Fishbowl, decided to stop accepting new resellers entirely and start promoting our Referrer Program. I see a similar trend in many companies that sell business-related software.
So what’s going on?
I know when we at Fishbowl started our reseller program we had several valid reasons for doing so. First, customers like to have a local expert who can come over, fix problems, and answer questions if need be. Second, they tend to have that personal, trusted relationship with their clients. If the consultant recommends a certain course of action, then the client is more likely to agree. Third, as a software company, and with a limited amount of resources, you simply can’t be everywhere all the time, so working with consultants is a way to leverage limited resources and jumpstart entry into the market. Fourth, the reseller approach had been a tried-and-true method of selling business software for decades.
I can’t answer for other companies, but here’s what we discovered at Fishbowl. It is extremely difficult to bring anyone up to the level of expertise required to answer all the prospects’ questions accurately. Fishbowl is a big chunk of software and can be applied across extremely diverse markets, so it takes time to become familiar with our software to the point where it can be properly applied. There simply is no substitute for experience. But most consultants who were working with us as resellers did so only occasionally and therefore didn’t do enough demos or implementations to become expert on our software. As a result, sales were sometimes made where Fishbowl wasn’t a good fit or was misapplied and, as a result, our tech support group started getting hammered by tech support calls from dissatisfied customers.
Additionally, as people became more reliant on the internet for demos and support, it became apparent that the best people to provide these services were our own sales and support teams. But our resellers still had that personal relationship that we couldn’t provide so our approach was to develop and promote our Referrer’s Program where the consultant could still receive a substantial commission by referring a client to Fishbowl, but would not be required to become an expert on our software. The consultants benefited because they no longer had to devote the majority of their time and resources to one product but they still received a substantial commission (avg. $1300/sale). And Fishbowl benefited because this approach was easier to manage, it was cleaner and, frankly, we made more sales. In the end more sales benefited both the consultant and Fishbowl because we each now had more customers to work with. I suspect the other software companies have had similar experiences.
So, what do you do if you’re a consultant/reseller who no longer has the opportunity to resell (and therefore no longer has the opportunity for that additional income)? Well, let’s face it. At the end of the day your clients simply want their problems solved. Period. And if your area of expertise doesn’t exactly fit your clients’ specific need then you run the risk of losing their business because they don’t want to waste time with someone who can’t help them. Would you? A consultant who only does one thing is like a dinner party guest who can only talk about their recent trip to Thailand.
More than ever businesses, particularly businesses in the SMB market, want someone who can solve, or at least address, multiple problems, sometimes across multiple different specialties. So why not keep your area of expertise but expand your horizons to include a greater depth of knowledge in other, related solutions (Fishbowl is just one) to the various problems your clients may encounter? Your clients will appreciate it, your marketability will go up and, best of all, you can start saying yes to a lot more clients.
Till next time!