Solution providers typically like to keep their customers out of reach of vendors, lest the vendors give in to the temptation to cut the provider out of the equation.
But e-mail filtering and security vendor MX Logic, Englewood, Colo., has turned the indirect sales model on its head. Whereas vendors selling through partners typically let the provider do the prospecting and selling, MX Logic asks its partners to let the vendor do the work.
“We find the opportunity and just turn it over to MX Logic and let them run with this,” said Jim Steinlage, president of Choice Solutions, a partner in Overland Park, Kan.
Once a sale is completed, the vendor cuts in on the profits the partner whose customer made the purchase.
“We inverted the model,” said Ken Totura, MX Logic’s vice president of sales.
And topping it all off, since MX Logic uses a managed services model to sell its technology, the partner gets recurring revenue from the sale.
Having been in the technology industry for more than 20 years, part of it as a VAR, Totura said that when MX Logic started evaluating its options on how best to work with the channel, its current approach, though unusual, emerged as the obvious choice.
MX Logic, he said, needed an effective way to get into the SMB (small and midsize business) market that the channel owns, since the vendor already had established itself in the enterprise.
With the benefit of hindsight from other vendors’ experiences, Totura said he knew what not to do, which is to try to ram an enterprise-focused selling model down the throats of VAR and integrator partners. Too many vendors have tried that and failed, he said.
“Vendors all want to get into the SMB space, but how do you do it?” he asked.
Typically vendors approach the space by trying to create demand and having the solution provider fulfill it. But MX Logic took a different approach: Since VARs have the relationship with customers and know their needs, Totura said it made more sense to piggyback off that and persuade the VARs to hand over their customers.
Of course that’s where the hard work is, MX Logic executives acknowledge. So the vendor has to build the trust and convince its partners that it will not steal their customers. MX Logic does this by having partners sit in on the first couple of customer sales calls, said Steve McCutcheon, MX Logic’s vice president of marketing.
Once partners see the model in action, he said, they start to grow comfortable with it.
“It’s unusual,” said Steinlage, “but for this kind of product, I’m OK with that.” Besides, he added, MX Logic has proven itself loyal to the partner. “They’re not stealing the customers or trying to sell them something else directly.”
It’s an approach that Steinlage said he would not agree to with any vendor.
McCutcheon said MX Logic has put together a number of programs to support its unorthodox sales model. They include a “Demo on Demand” program through which the partner turns over a customer to the vendor to demonstrate the technology.
The vendor has other on-demand programs for such things as training and telemarketing. On the training side, Totura said, MX Logic provides and customizes online training for customers without charging extra fees. The costs of the training are covered in overall technology use fees.
Totura said partners need not fear losing their customers to MX Logic because the vendor has no intention of ever taking them direct. If the vendor ever started stealing customers, that would be a self-destructive move because word would get out quickly, he said.
MX Logic has about 600 partners, and Totura said the vendor is aggressively recruiting more.