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Should You Have Levels?
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[Image: icon1.gif] Why Should You Have Levels


I get occasional pushback as to why the typical reseller program should have levels. Following is my response:

If you have a lead, and you have 10 resellers in the prospect's area, who should get it?

The response: the BEST reseller.

And how do you determine the best reseller?

This isn't a charity--there is no reason to send a lead to a person that hasn't shown they can close a door--let alone a sale. The lead should typically go to the reseller who has the best chance of closing--they have the product knowledge and a proven track record that they can SELL. What if they build part of their business around your product--and they are willing to hit a guaranteed quota (if they keep getting leads and get more margin)?

To differentiate them from the normal reseller, let's call them GOLD.

You now have levels.

Now what about your Gold partners that want a larger volume discount (more margin) because they sell a LOT more. Let's also say they have learned the product well enough to integrate it and to handle both first and second line support. They will commit to a higher quota (they do it anyway), plus are willing to pass a test to prove they can support the customer. Should you treat them the same (they increased their loyalty and are not treating you the same)? No. Let's call them Platinum.

There are your levels.

Plus, your program automatically creates the behavior you want--increased exclusivity and loyalty from a shared sales force.

BTW, when you have a NEW program, you "announce" you have levels (to reward commitment), but you have to have enough sales history to set them. In addition, when established, everyone comes in a the mid-level to start. Then they have a decent margin to compete, until they can prove they can maintain that levels. The time depends on your sales cycle--if it takes 6 months to close a deal, they probably need a year to hit the volume. You have to set it up like this to start--so when folks come in later at Gold (so they can even compete), and existing Gold and Platinum complain, you can say they came in the same way--so long as it is fair, it is fine.

In addition, levels have been around since the early 80's--resellers know this model and it is NOT too complex for them. Just because you don't know about it (new to the channel) doesn't mean you should change a program that has WORKED for decades. Welcome to their world--learn it, leverage it.

More about levels later...
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Ted Finch, CEO
Chanimal, Inc
512-263-9618

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Should You Have Levels? - by chanimal - 11-02-2019, 08:51 PM



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