Partner Perspective: Partner Pricing

By Dede Haas, CA-AM, Channel Sales Strategist, DLH Services, LLC

Channel sales strategist and coach Dede Haas is founder of DLH Services, which helps technology vendors and partners create innovative, successful channel sales solutions and programs. Here, Haas discusses recurring revenue with two members of The ASCII Group, a 1,300-member organization of North American VARs, solutions providers, and MSPs offering services to help its members grow their businesses. Check out Haas’ “Channel Knowledge Nuggets” newsletter at dlhservices.com for tips and stories from the trenches.

JOE BALSAROTTI is president of Software To Go. He’s held chair positions on the National Federation of Independent Business’ (NFIB) MO Leadership Council, Clayton, MO Merchant Assoc., and Region VII of the Federal Small Business Regulatory Fairness Board, and serves on the Executive and Dealer Advisory Panels of The ASCII Group			JEFF OLEJNIK has served as president of VoIP phone service and IT support technology solutions provider Newport Solutions, Inc. for the past nine years. Newport bills itself as an outsourced IT department. Olejnik’s career spans various roles selling and servicing technology in client, vendor, and IT service provider roles.

QUESTION 1: Do you think vendors, in general, price their products appropriately? Why or why not?

BALSAROTTI: I think, in general, they’re in the ballpark but rarely hit the mark the first time. We’ve seen that companies tend to come in too low at the beginning and then try to make up for it. And as they’re making up for it, they go too high and end up losing people, because there’s always competition.

I think the number of vendors who have it priced appropriately is very small. But those that are in the range are the majority.

OLEJNIK: I do. I think most of the vendors have done their research to price everything pretty competitively in the market. And a small percentage may need to do a little bit more homework regarding the MSP space for service or product offerings.

We’ve seen a few vendors in the ASCII National Vendor Advisory committee whose pricing is either too high or too low. And it just makes you wonder if they’ve done enough research.

QUESTION 2: What recommendations would you give them when they are developing their product pricing?

BALSAROTTI: Look at what value they’re providing the customer. Too many think they’re worth more than they are. They’ll get a lot of interest at the beginning. Then, as they realize they’re not making sales, you see these companies flail.

They must understand who their target audience is. If they’re going to come through the reseller channel, have channel partners in the discussion and find out what it’s worth to the customer and what it’s worth to the reseller. Then, work backwards to see if that’s an appropriate amount of money.

OLEJNIK: As they’re looking at their pricing, I would have them consider whether this product or service is something an MSP can resell to end users or clients or if it’s a product or service that most MSPs may just put on as a value-added service to their current offering.

A product that an MSP may add onto its current offering to keep the customer protected — lower-end or lower-priced — may just be a value-add for the MSP. If it’s a larger layer of protection, the MSP needs to decide whether that’s something it can resell to a client.

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The ASCII Group is a vibrant reseller community of independent MSPs, VARs, and other solution providers. Formed in 1984, ASCII has more than 70 programs that provide turnkey cost-cutting strategies, innovative business building programs, and extensive peer interaction. ASCII members enjoy benefits such as marketing support; educational information; group purchasing power; increased leverage in the marketplace; and multiple networking opportunities. These programs enable ASCII members to increase revenue, lower operating costs, and grow service opportunities. ASCII is the oldest and largest group of independent information technology (IT) solution providers, integrators and value added resellers (VARs) in the world. Learn more at www.ascii.com.