Questions

What business model would you recommend we implement for agencies who want to resell our proximity marketing platform to their clients?

We're a proximity marketing platform that leverages geofencing to deliver contextual offers and content to mobile users based on their current location. We have interest from agencies who want to partner/resell/integrate (API) for their clients. I'm interested to understand the typical business models in working with agencies as resellers.

4answers

There are three main models. Firstly, reciprocity, we recommend clients to your agency to partner with and the agency recommend clients back to buy your service. The value exchange needs to be equal, but when this works it usually forms the strongest of strategic partnerships. Secondly, there is a commission structure. The main challenge for this model is often an agency is developing tens or hundreds of thousands through their sales to clients yet the commissions from products are often only hundreds or thousands and whilst they provides a passive income, by themselves the commissions are not lucrative enough. Also it’s hard to remain front of mind with the Agency account or sales teams. The third model is created by creating a value added partner programme. Where on top of commissions, because the agency, has been trained and certified in your product they can also benefit from an introduction to new clients, from the partner product, where they can sell the their services on top of the commissions they make from integrating the partner. Most CMS, hosting or ecommerce vendors have these types of programs. Happy to pick up more details on these on a call.


Answered 2 years ago

OR you could simply license your software to each agency for re-sale. A business attorney specializing in licensing agreements can set this up for you easily. Congrats on developing an in-demand product.


Answered 2 years ago

Hi.

I've been in a similar situation in the past and the single biggest challenge I found was that reselling a 3rd party service was not a core business development priority for the partner agency.

To overcome this I'd advise that you find the no-brainer proposition that makes it one.

A few years back a British insurance company wanted to offer to offer a new policy to insure your set of golf clubs for £35 per annum.

On the face of it, this was a non-starter. Few sets of golf clubs are worth more than £35 and those that are, are typically covered or itemised on existing home contents insurance policies.

The project was a huge success because the no-brainer proposition was identified and a partnership marketing approach adopted.

In return for the £35, the policyholder received the following free benefits:

6 Nike golf balls
A Calloway cap
A free round of golf at any DeVere club
4x two for one vouchers to use at most courses

The perceived value of these free benefits was over £200.

The benefits were all obtained free of charge.

Nike and Calloway were happy to do a sampling exercise to their target market. very few people play gold lone, so the vouchers were, at worse, cost neutral.

So, find partners who also want to reach the agencies you are targetting woth non-competing products or services. (e.g. trade magazine subscriptions) and create a "welcome bundle" of benefits that cost you little or nothing.

Find a remuneration model that is tied to usage. If you don't show this confidence then a prospective partner won't either.

I have my own a framework called APELA (Awareness, Perception, Engagement, Loyalty and Advocacy). I'd be happy to provide you with more over a call and follow up with a summary of our call with recommendations.

Good luck.

Mark Walmsley
mark@markwalmsley.co.uk


Answered 2 years ago

I would share my personal experience with you for this question.
I would recommend you the auctionon model.

The Auction model

The auction model is synonymous with eBay, these days, but of course auctions have existed for hundreds and hundreds of years. The tulip market in Amsterdam is one of the more famous examples. There are numerous different types of auction, from English, to Dutch, Vickrey, Sealed Bid, etc., and they all share certain characteristics: the price of the good is not fixed; each individual assesses the value of the good independently; final value is determined via competitive bids. This business model has become very popular in recent years as the Internet has helped to broaden its appeal.

For further queries consult me


Answered 2 years ago

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