For Australian SMEs, expanding reach often means looking beyond direct sales. A reseller channel – partnering with other businesses to sell your products or services – can be a powerful growth engine. But how do you justify the investment? Calculating the return on investment (ROI) isn’t always straightforward, but it’s crucial for demonstrating value and optimising performance.
Many businesses focus solely on revenue generated through resellers. While important, a true ROI calculation needs to be broader. We’ve seen successful programs consistently deliver benefits beyond just top-line sales. Here are some key areas to analyse:
- Increased Market Coverage: Resellers give you access to customer segments you might struggle to reach independently. Quantify this by estimating the value of the new market share gained – what would it cost to achieve this through direct marketing alone?
- Reduced Customer Acquisition Cost (CAC): Resellers often handle the initial sales conversations and customer onboarding. This lowers your CAC significantly. Compare the CAC of customers acquired through resellers versus direct channels.
- Faster Revenue Growth: A well-managed channel can accelerate revenue growth compared to organic expansion. Track the rate of revenue increase after launching or expanding your reseller program.
- Brand Building & Credibility: Partnering with reputable resellers can enhance your brand image and build trust with potential customers. While harder to quantify, consider the value of increased brand awareness and positive association.
To calculate ROI, use this basic formula: (Gain from Investment – Cost of Investment) / Cost of Investment. ‘Gain’ includes all the benefits listed above – not just revenue. ‘Cost’ includes program setup, reseller onboarding, training, marketing support, and any incentives offered. Don’t forget to factor in the time your team spends managing the channel; this is a real cost.
We often advise clients to start small, pilot a program with a select group of resellers, and meticulously track results. This allows for data-driven adjustments before a full-scale rollout. As you gather data, refine your ROI calculations and focus on optimising the program for maximum impact. A robust reseller channel isn’t just about adding partners; it’s about building mutually beneficial relationships that drive sustainable growth.
If you’re considering a reseller program, or looking to improve an existing one, the first step is a thorough assessment of your current market position and potential reseller partners. Let’s discuss how we can help you build a channel strategy that delivers a measurable return.
