Wireless and mobility provider ZyXel is helping its solution providers remain profitable and drive sales by increasing product discounts and marketing co-op funds to make it easier to close deals on products and services.
“We’re looking at this as our own ‘stimulus package’ to partners,” says Dana Patrick, Director of North American Channel Sales, ZyXel. Since the incentive program was launched on April 15, 2009, Patrick says in just the first 45 days, ZyXel has seen solution providers driving incredible results.
“Compared to our first quarter, we saw partner revenue and sales increase 37 percent, average order revenue per partner increase by 17 percent and we’ve seen a 17 percent jump in the number of resellers that purchase from us,” Patrick says. In addition, he says there’s been an increase of about 34 percent in the number of new partners signing up for ZyXel’s partner program.
As hardware sales slump across the board, many solution providers are finding it more difficult to close sales as customers shy away from making new technology investments. The SMB market is particularly wary, as many have smaller budgets and just can’t afford the investments. Patrick says ZyXel is focusing on making it easier for solution providers – many of whom are SMBs themselves – to drive sales even in a difficult economic climate.
“Our primary end-user market is SMBs, and we have a lot of SMBs who are also solution providers. They’re struggling in this slow economy, so we want to do everything we can to help them make sales and protect their customers,” he says.
Patrick adds that solution providers typically have between 30 to 40 different vendors on their linecards, and these incentives will help to make ZyXel products even more attractive to solution providers.
To that end, Patrick says, ZyXel has increased product discounts by over 50 percent to partners up front and through distribution, and has increased marketing co-op funding more than 100 percent.
By increasing discounts, Patrick says, ZyXel has essentially doubled margins for partners, making it more profitable to offer ZyXel products and services built around those products. ZyXel has a strong presence in the hospitality market, deploying wireless and traditional networks in hotels across North America, and has also found success in the mobility market, Patrick says.
He adds that as the corporate workforce becomes more mobile, securing laptops, mobile devices and smartphones becomes increasingly important, even in an economic downturn.
“Even in a down economy, security concerns have not decreased at all. And so we’ve come out with new solutions to deal with these issues,” he says. Partners are pleased, Patrick says, and though the incentives were supposed to expire July 31, 2009, he says based on the incredible success of the program, it’s possible the end-date will be extended.
“So far, the feedback has been really positive,” Patrick says. “Partners are saying we’re really helping them drive business with the discounts, and for those solution providers that are large enough or profitable enough without the discounts, they’re still pleased to have the benefits,” he says. “We’re reviewing the programs at the moment, but as of right now there’s no definitive announcement as to when it will end,” he says.
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