ISPCON: Sell to the Channel

A webhost with many VAR resellers explained how to open that sales channel.

by Alex Goldman ISP-Planet Managing Editor [November 5, 2007]

Clarence E. Briggs III, CEO of Fayetteville, N.C.-based webhost AIT, gave the rabble rousing keynote at Spring ISPCON. This time, there was a different rabble rousing keynote, but AIT still had much to convey.

In this session, Sean A. McCoy, chief marketing officer, gave some advice on building relationships with VARs and other resellers in the session VAR Strategies for Business-focused ISPs, MSPs, Hosts and IT Services Shops.

AIT began as a reseller of EarthLink and iServer. It now develops many products in house.

Most ISPs are run by people who understand technology better than marketing, and who know how to fix hardware problems but not how to run a marketing survey. So leave that to the professionals. McCoy said his company has a wide variety of resellers including web designers, internet marketers, graphic artists, advertising agencies, and more.

What should you offer a VAR? VARs need to be able to get a good price on a product, to own brand it, and to obtain recurring revenue from it.

What do you hope to gain? You hope to reach more customers at a lower marketing cost to you, to obtain feedback, and have lower ongoing costs as your VARs provide tier 1 support. Your best VARs can eventually have their own resellers. AIT calls these "Super VARs".

What do you need to plan? You need to consider who will own the customers and their data, how much it will cost you to enter the market, whether you can do so competitively, and whether both you and your VARs can gain from the product.

Seven strategies for success
McCoy concluded with seven key ideas, using movie distribution as an example:

1) Sell related products

2) Consider retail product distribution

3) Enable impulse buying and sales

This is extremely important! I know of one SMB owner who was actually upset when adding a "Buy Now!" button increased business by 10 to 20 percent. You may like to think that products sell themselves, but the right sales process, which includes enabling impulse buying, can make your business better.

4) Consider your product life cycle

McCoy noted that movies go from the movie screen to DVD to pay per view and, if they're really good, get repackaged in a DVD "director's cut" or re-edited version.

5) Sell insurance

"Keep spinning the fear: it can happen to you," said McCoy. He noted that many company employees spend a significant amount of time doing non-work activities on the internet. You can sell backup and other services after a company has an emergency, as the owner is more receptive to your message then.

6) Raffle sales

McCoy said that raffles and giveaways have been extremely helpful in building the channel.

7) Test drive

If you believe in your product, allow prospects to test it for free.

—End