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Microsoft tells: How resellers can make money on top of CSP

By Heather Wright
Wed 7 Sep 2016
FYI, this story is more than a year old

When it comes to best practice building a business around Microsoft’s CSP offerings, Microsoft CSP program global director, Morgan Wheaton, has a perhaps unexpected tip: Learn to disqualify customers.

Wheaton says research with early CSP partners has shown profitability comes from partners being able to drive their own services on top of the Microsoft offerings.

“The software license transaction really is just a means to get the customer onboard and have them provide that base service,” Wheaton says.

“The savvy partners are the ones who figure out how they can layer on additional services. I’d even go further and say partners that drive the most profitability are looking at this and saying what services can I sell to the customer today and then in the future on an ongoing basis.”

Wheaton says some of those services may be as simple as annual audits or system health checks to help customers optimise the use of their system, along with training users.

“That customer all of a sudden has a very sticky relationship with the reseller because the reseller is adding so much value and the customer can go focus on whatever it is they do, make widgets, provide services or bake bread. The partner plays the role as being the expert of the services and understanding how the customer can get the most out of technology.”

But while offering services is key to growing profitability, Wheaton is adamant resellers must also learn to leave some customers out of the mix.

"Best practice I’m seeing is the partner strategy begins with the opportunity they see in the market and the needs of their customers, so the ones who really spend time understanding how they can meet those unique customer needs and build services around that or package pieces of IP around it, those are the partners who are most successful. 

“But I’d go so far as to say that it is probably just as important to understand what you are not going to do as it is to understand what you are going to do.

"You need to figure out how to disqualify prospects.

"There are going to be companies that are not that good a fit and you honestly want them to go to the competition, and take up their time, whereas if you focus on those customers where you really have your sweet spot, they are going to be happier, they’re going to buy more from you, be better references, be more profitable in the long term.”

Wheaton says successful partners are also putting ‘a lot’ of thought into how they can divide up services and how they can touch the customer on a regular basis afterwards, often through the support relationship.

"It is interesting talking to partners about support because some of them are a little scared by it, but savvy partners look at any call into the company, even a support call, as an opportunity to sell. 

"If you teach your support people the last question they should ask the customer is ‘what has changed in your business?’, you’re going to uncover incredible opportunities to sell additional services and make that customer that much more happy.”

Echoing a strong theme of Microsoft APC, currently underway on the Gold Coast, Wheaton says partner to partner relationships are also key, with partners realising they don’t have to do it all and can instead focus on their area of expertise and bring in other partners to provide additional services or IP.

"This whole partner to partner thing is even more critical in the cloud.”

Wheaton, who spent eight years in Microsoft’s Dynamics team working with ERP and CRM customers, likens the relationships being formed in via cloud sales to those seen in Dynamics previously.

“If you’re implementing an ERP system, you’re doing open heart surgery on a business and that customer is going to come back to you for updates on the system because accounting laws change or their business model changes. You develop that trusted advisor relationship - I’ve seen a lot of partners with customers who stay with them for 10 or 20 years.

“The same phenomenon is happening with CSP, and it’s with something as mundane as office automation.”

Wheaton says Microsoft will continue to grow its indirect and direct partner numbers, along with the services offered via CSP.

“Right now the CSP portfolio includes all our current online services that we have available. As we make additional services available we will add them in.

“We added in Windows as a service because we had a lot of requests for it,” he says

"If there’s a service available from Microsoft it is our intention to make it available through CSP.”

Wheaton says while CSP is a way for partners to change businesses and develop annuity revenues, it is primarily a licensing model and order processing system.

“I think what you will see is that over time we will take a look at other Microsoft products and services that we can make available for our partners to resell through that engine. 

“I don’t know what the future holds, but I think we will expand the opportunity to partners as time goes by."

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