Recession: Increase sales by turning customers into resellers
Increase sales or keep sales volume
The hardest part in you business is selling your products or solutions.
Now the recession is going on, companies are on a tight budget and don’t want to spend or invest much. Still you want to keep or increase your sales level.
Increase or keep the sales volume (and profits) can only be achieved by:
- Getting your lead generation and sales team working more effectively (see LEADSExplorer)
- Increase the number of sales reps., inside sales, outbound callers.
- Increase marketing spending for generating more leads.
The first is rather simple to start with by just implementing a java script line into your website pages. However you will need additional sales reps. to call or visit all the leads generated.
Increasing the number of sales people adds to the operating expenses and comes even more expensive if you need to fire them (maybe not in US, but surely in Europe).
Increasing marketing costs increases your operating expenses too and there is even less guarantee on more leads.
Use customers as Sales
In order to reach out to more potential customers, you could use your customers.
They know people beyond your reach and probably know people facing the same problems or looking for the same solutions as they did.
Your customers should:
- Understand the product or solution
- Reasons for buying
As they have experienced it themselves.
Propose your customers to become “resellers” getting a significant discount of your product if they buy more than 2 times as what they are intending to buy.
If they intent to buy just one, tease them with a reseller contract if they would buy 3 or more.
If they would buy 2 of your equipments, propose a reseller contract when they buy 6 or more equipments.
The discount amount would be between their normal discount and a real reseller discount. This is in order to avoid any collusion with your existing sales channel. Do verify if there is no exclusivity with any reseller or distributor in any particular geography or you will be paying a double commission.
The level of discount should be at the same percentage as your current sales costs of your revenue.
Thus if your sales costs are 15% of your revenue, then offer 15% discount on top of the normal discount.
As this “reseller’ scheme will help you to reach new customers that you would never have reached before, you could add on 5% more discount.
The payment terms needs to be discussed and controlled, as you don’t want to be paying their inventory of your products. Thus at best normal payment conditions need to apply. It will even be better if you can make them pay in a shorter time as they have obtained the significant discount.
Just make sure you get paid for the goods delivered.
Put a time frame on the contract as the market, your customers, your resellers will change and this recession won’t last forever.
Reseller-Customer benefit
This method allows to:
- Push more products or solutions into the market
- Your customers take inventory of your products
- Moves the problem of finding leads or customers to you newly acquired resellers.
- Reach to more potential customers you never would have been able to reach.
- Keep costs under control: no need to hire more sales people (no cost to fire neither)
They take the benefit of:
- A lower purchase price for the products or solutions they require
- Having the opportunity to generate income on the sale of the surplus goods.
The goal is to sell more, get more products into the market, in order to generate sales you normally wouldn’t have made.
Of course this Reseller-Customer method is not appropriate for all products or solutions:
- No sales training: thus not complex products
- Generic or widely used products or solutions
- Short to medium sales cycles
However if it is feasible of turning customers into resellers, it will bring you additional revenue.
What are your experiences with customers becoming your reseller?
More from LEADS Explorer
- What to do when sales is seriously under budget ?
- What selling metrics are required to manage sales in the recession?
- Increase sales by just following-up on emails and calls
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