Ziff Davis Internet
News & Resources for the IT Reseller
NewsReviewsTech AnalysisCommentarySecurityLinux/Unix
My Account |  

Commission Payments Fit the Bill for Services Vendor
By John Hazard


When most vendors look to prime channel sales with better incentives, a margin boost is the answer.

ADVERTISEMENT

But when your revenue model is a recurring stream, such as hosted services, small monthly margins seem less attractive to VARs, and vendors may consider monthly payments to VARs that have little involvement after the initial engagement to be impractical.

Intermedia.NET, Mountain View, Calif., Microsoft Exchange and Web hosting provider, found the answer from traditional sales commissions.

The company is paying its VARs a one-time, 50 percent commission on new accounts, based on the amount of the client's first two months of bills, the company announced this week.

The commission proves better compensation for VARs and an easier calculation than a margin on monthly bills that may or may not continue, said Rurik Bradbury, Intermedia.NET's director of marketing.

The goal here, said Bradbury, is to get users signed on to the program.

"It allows us to recognize VARs in a fairly upfront manner for the role they play making the sale and advising the integration," Bradbury said. "We manage and support the system after that."

The program was enough of an incentive for Erik Albaugh of www.ErikJames.us, a Queens, N.Y., Web design and hosting firm, to join Intermedia.NET's and promote it to all of his current customers.

"I'd like to get everyone of them signed up," he said. "That's good for me, and it's good for them."

Most hosting companies ErikJames.us works with offer minuscule benefits, such as discounts on their own hosting subscription, Albaugh said.

By extending the commission program to the second month of the relationship, Intermedia.NET encourages VARs to assist and advise customers as they feel their way through Intermedia.NET's features.

"It's really a two-three month process," Bradbury said. "We want end users to take advantage of as many of our features as possible, and we want VARs to benefit from those added sales."

The Channel Insider: Solution Builder

Intermedia.NET moves about 22 percent of its revenue through its 1,000 resellers, and the company expects the ratio to grow with the latest channel program, Bradbury said.

The company relies on the relationship between Web designers and hosting providers to push their services, including a hosted fax-via-e-mail service, he said.

"For a lot of these small businesses, the Web designer is the only IT person they have any contact with," he said. "The channel companies are trusted and valuable to these businesses."

Intermedia.NET expects to launch a private label exchange program for resellers in January.

     
Email


TALKBACK

MICROSOFT RESOURCE CENTER
Help boost your sales with BONUS PACKS.
Let BONUS PACKS help you sell more PCs—with up to $1,200 in valuable products and services. Visit
Buy Local Partner site >>

Join the Microsoft Empower program for ISVs.
A relationship with Microsoft allows you to compete with the big dogs. Learn more about resources, tools and training. Get the documentation >>

Piracy hurts your bottom line.
But it's going to hurt pirates even more—eight new piracy lawsuits were filed in March. See who's on the list. >>
Free Hands-On Training Lab
Find out how key features of SBS 2003 can help you open up a new line of revenue. Register now >>


SBS 2003 Sales Reference Card
This handy reference card contains features at a glance, sales objection handling, pricing guidelines & more. Get it now >>


Microsoft Empower for ISVs rewards your big idea with big benefits and support.
Access key development tools at a low cost to help you develop that idea into an innovative application. Learn more >>



ATTN: SOLUTION PROVIDERS
Autotask makes your IT business run. Better!
  • Manage your entire business from a single integrated system accessed over the web
  • Track and control service tickets, and efficiently dispatch field service techs
  • Monitor and analyze project profitability by project, customer and type
  • Bill by fixed price, time & materials, block hours or retainers
  • Set up workflow rules and automated notifications
  • Nothing to install. Easy to use. Affordable.
Click here ONLY if you want a personalized demo via the web
(North America only, please)


Attention Microsoft Solution Providers!



Want to gain a competitive edge? Try Microsoft Watch – FREE!



Each week you receive:
  • Microsoft News and Insider Information
  • Expert Analysis
  • Code Names of Upcoming MS Products
  • Year-Ahead Calendar, updated monthly



    Click Here to sign up now for your FREE 14 Day Trial to Microsoft Watch.

  • POPULAR TOPICS
    SPECIAL REPORTS
    White Boxes
    MS vs. IBM
    Linux in the Channel
    Network
    CHANNEL RSS FEED
    Stay in the Zone
    Put The Channel Insider on your desktop.
    FREE NEWSLETTERS
    Subscribe to The Channel Insider: Channel News, Reviews, Resources and more.

    Make your selections below:


    Contract Watch

    The Channel Insider Update

    Preferred e-mail format:

    Enter your e-mail:


    view all newsletters >>
    Channel Insider Quick Links
    Ziff Davis Footer Logo