IT and Telecoms companies can improve ARPU by supplying new products to loyal customers. Research shows that SMEs prefer to buy from existing suppliers, they trust. Until there is sufficient demand to justify investment in support, billing and marketing, the supplier will often partner with a specialist on an introduction and commission basis. Moving from a dealer to a reseller model provides better control and improved margins, however there are challenges along the way.
Forecasts, targets and contract terms
What are the rules? Are there any set targets? Read the partner agreement before you sign and ask to speak to a partner that has made the transition to ensure you are comfortable with the terms and conditions.
Billing can be problematic for IT companies that want to start reselling fixed, mobile and hosted telephony products. Alongside monthly service charges they will need to process monthly CDRs (Call Data Records), rating each call type and producing itemised bills and variable invoices. It is difficult and risky to try and adapt existing in-house billing systems and purchasing and managing specialist billing software is not always feasible.
There are some good third-party billing products available, however the set-up fees, monthly standing charge and billing percentages mean the reseller often has to take several orders before the margin covers the monthly cost of billing. Some of the more sophisticated suppliers offer white-label billing for their products and will even bill products and services the reseller buys from other suppliers. This can be a cheaper and less risky alternative.
Until you reach a critical mass of customers it is not worth recruiting and training additional support staff. For business-critical products that have 24/7 SLAs, technical support is a particular challenge. There are some very good bureau services available however these come with set-up charges and minimum spends. Often, they will also charge for calls by the minute and per email on tickets. Incidents happen with any technology and a major outage could cost thousands of pounds. If the supplier of the products offers a white label technical support service, then this is the best solution until you can justify hiring your own team. Only the best suppliers will stand by their products by offering a white label technical support product on a fixed-cost basis. They will also help you to train your own support staff when the time is right.