Distribution Partnerships · Partnership agreements

Considerations in getting another company to represent your software in another country?

Xander van der Merwe CEO at MH Interactive Ltd

March 20th, 2016

We have created a relatively successful software product and have been approached by another party that wishes to represent our software in another country where we already have one large customer that we are serving remotely very successfully.

Being a small company still at this point, makes marketing difficult at times as we do not have all the know-how or big resources to spend on marketing. Having someone else come forward to represent us therefore sounds like an ideal opportunity. 

However, since we do not know much about this party as yet, we would not want to hand over our current large customer that we have worked hard to build a good relationship with and we want to ensure that our product name is not damaged in the process should things not work out.

I do not have any details as yet about what this party is going to offer or propose and whether they want an exclusive deal for that country, but I'd like to be prepared before going into the first meeting to discuss or negotiate this, so am looking for advice on ways to structure such a "partnership" and for things to be aware of and look out for.

Any advice on structuring representation for software products in different countries would be very much appreciated.

Sidney Sclar SID the SECURITY PRO at sidthesecuritypro.com

March 20th, 2016

Connect with Deborah Bowman at Clasidconsultantspublishing.

Post an inquiry on line.  Deborah has Network Partners in 86 + countries worldwide.

Chris Sanderson Affiliate Marketing and Program Management

March 21st, 2016

Not knowing your software or the target market it's hard to reply with any depth. However affiliate marketing works very well for any form of consumer focused marketing of software and removes the need to hand over local control to another company. 

Eric Miller Chief Executive Officer at Avi-on Labs

March 21st, 2016

It sounds like you don't know much about them yet so I can't be very specific.

Will they need to get access to your source code to provide or customize the service?  If so you should be very cautious, get to know them well, and consider carefully how you will manage support and upgrades.

What do you need from them?  If customer referrals only, that is pretty easy and leaves you in control of your business. That would be my cold recommendation. If you need local customization and support then proceed cautiously and make sure the extra revenue is worth a lot of phone calls/plane trips etc. 

Xander van der Merwe CEO at MH Interactive Ltd

March 21st, 2016

Thanks everyone for your feedback.

The software in question in an online platform for providing mental health and related services and is typically used by mental health providers to serve their clients online via numerous communication channels (e.g. real time chat, SMS, email, face to face, etc) and allows keeping and maintaining full clinical records.

So not really general consumer oriented software per se as the software mostly requires customization / configuration per installation to fit in with the way a service provider works.

Initially we would want to do customization ourselves (and therefore not provide source code) as there is likely additional work for us to do to get the packaging to a point where a 3rd party can seamlessly install and configure the system by themselves. We will probably learn quickly about this for the first potential customer.

I think we need more than customer referrals ideally, although that would be helpful too.

Increasing our customer base is the most pressing goal at the moment, so that would be the first and foremost requirement of the prospective partner. That could initially be referrals, but over time that should probably include support and general business development within that area - perhaps allowing us to make it known that we have a local "office" within that country.

I would incidentally be keen to find out what is typically paid in commission for referrals only, in comparison to actual closed sales deals, as I have another contact that provides the odd referral from time to time. There are probably a few steps in between those two levels as well.

Chris Sanderson Affiliate Marketing and Program Management

March 24th, 2016

In terms of referrals  (B2B) , generally you'll be looking to pay on a "pay per valid lead basis" if you want to push that model to a commercial level. The amount you pay per lead needs to take into consideration your general conversion rate of leads into paying customers and what any of your competitors might be paying. While not in the exact same space carecloud.com have been looking at paying around USD $75 to $125