At Square 9’s recent Encompass event, company VP of Sales North America East, Joe Hartnett, and Copytronics Executive Director of Solutions, Rohan Santora, told resellers about the importance of maximizing their aftermarket opportunities, such as adding users or departments to the account, training, or professional services after the original contract is signed. Although their comments were specific to selling enterprise content management (ECM) solutions, their advice could easily be applied to other types of software. (For a more in-depth look at dealer opportunities to sell software, see “There’s Gold in Selling Software Solutions, but You Have to Dig for It” in the October issue of ENX Magazine.
According to Hartnett, aftermarket sales for ECM can be as much as 45 percent of the original contract for dealers. He reported that 57 percent of Square 9’s revenue in the past year came from aftermarket transactions such as adding users, features, departments, professional services, server upgrades, and maintenance and support. Much of that represents recurring revenue for the dealer.
Hartnett cautioned, however, that dealers “not sell ECM just to enable a hardware sale.” If you focus on selling the hardware and don’t think about future opportunities with the software component, then it’s less likely that the aftermarket sales will materialize.
His advice is to start small. Fill and support a specific client need well so they can quickly see the value you bring. Once they feel confident about the benefits of having the software, it’s an easier sell to expand the footprint of the existing solution or sell add-on solutions and services.
Copytron has sold software solutions for 12 years, but made little headway in it for the first six years, said Santora. “We did not understand how to create value, so we could not expand our margins,” he said. The company has turned that around with 1,000 percent growth over the last six years, largely on success with aftermarket sales. This is what Copytron did to grow its business with existing software customers:
- Increased their understanding of the product set. When you are not fully invested in selling software, you focus on the core of what you can sell. The less you know about the full suite, the less likely you are to upsell.
- Invested in hands-on use and training. If you use the software internally, you better understand the value proposition, and your implementation and support teams stay fresh.
- Learned how to transform the solutions group into a VAR. The ability to take a consultative approach builds trust with your customers and can accelerate add-on sales. Santora suggested partnering with the software vendor at first to ease into the VAR approach.
- Became an expert in a focused product set to sell, implement, and support. This meant stepping away from a “Jack of all trades, master of none” approach.
- Took advantage of customer demand for training. This is often an overlooked opportunity, and resellers can get as much as $1,500 per day for on-site end-user training.
