Know-How Exchange : Strategy

A few salient issues:

You're selling software. What's to stop a customer copying it? Do you have safeguards in place for this?

If they know a lot of your own potential clients, are they actually a good fit at all? Because a good fit usually tackles a different niche in a radically different way to you, bringing you totally fresh sales - the benefit being that you don't endanger each other's sales in any way at all.

If you have a relationship with a client, or prospect it's your relationship. If someone pounces on that, was your relationship trustworthy?

What are these guys offering you apart from their email list? I presume that they'll be taking all your marketing off your shoulders?

Folk like me can explore new markets and new angles on your sales that take your figures and kick them right out of the stadium. What's more you won't even see me do it. I wouldn't be able to promise you that your current prospects wouldn't sign up to my/our email list - you'd still get the benefit in some form or other. It's what trust is all about.

Moriarty, thank you for your feedback.

Yes, they can't copy and sell my software.
The situation is that all their clients are my potential clients, and currently I have around 10-20% of their clients. So there is a potential they can do a lot to increase sales.
These clients are really interested in software, not really who sells it to them, no competition and ease of use contributed to this.
They are offering to handle marketing, sales and everything, I just sit back and enjoy the ride... but it's in their control. The licensing makes sure they can't sell anything I don't know off. So, I know exactly what they do.

I would be a little careful of this. My guess - and it is only a guess - is that they're just going to blast it out to their email subscribers. Sure, there may be ten million of them, and they may grow it - only are they "active" marketers?

What I mean by this is what will they do when the traffic source dries up?

Because that's where the best marketers get clever and see what other dimensions are available to them.

Is their offer exclusive? Are you limited to using them and them alone? If it isn't then it doesn't stop you from exploring the other avenues of traffic that they aren't considering.

What kind of licencing do you use? API keys? Something more subtle? Or just a "licence agreement"??

Software is done the right way, secure, I know what they sold and when they did it. No worries here.
I'm more worried of not to just hand them my past work for them to just cash on it. I would like to think of a strategy that would make them work hard for both of us.
They would have exclusive or me and them, nobody else in this market. The country is Netherlands, big in this industry.
I assume a 6 months or yearly contracts would allow for evaluation before extension. I'm not sure about setting them a minimum sales numbers.

This is a bigger company, so playing like I don't need them, won't work. But, I need to set the rules, to protect my business.

A question - are you Dutch, or British/US living in NL or English from UK/US outside NL?? I can advise better when I know :-)

I'm puzzled how you have secure software - API key or whatever it is - yet you worry about this company snaffling your stuff. It doesn't add up. I'm sure there's some subtler kind of licencing model you can unleash on them - I'll do some homework this evening and brush up my ideas.

Now I'm still not clear on how you are phrasing your contract with them - now being Dutch they're likely to miss on any of the finer aspects of marketing. I know this as I have connections with the University of Amsterdam's business school - and the things they come up with are frankly silly. "Is Google Adwords good advertising" - I ask you! I don't even market to NL because they're so dense. So playing dead with them definitely won't work, they'll just think your dead and they'll inform the correct authorities. It sure takes some getting used to after the rough and tumble of the UK.

One advantage is that they won't have the imagination to even think of snaffling your stuff. If it's in the contract, it's there and they'll abide by it. Pretty well to the letter. My guess is that they'd wonder at you worrying.

Actually, I happen to live near Utrecht. We could meet if you like and discuss this in private - and confidence (anyway, my excuse is who'd believe a fifty-something who's old enough to look like your mum ?? :-)

I was thinking, maybe I can propose something like:
- if they sell upgrades or new licenses to my current clients, they get lower commission, since I already did the a lot, they just closed the deal, 25%
- new clients: bigger commission, probably is going to be 50%

Does this sound like a good start?

I'm in US, we are just discussing for that market. All business is online, really don't worry about licenses, it is covered. They can't do anything without me knowing, but I want them to sell to other 80% I can't reach or wasn't able to sell.

Your strategy sounds ok - but I don't have much to go on!

Are the guys selling your stuff in NL or are they US based? If the latter, do they know the local market? Are you giving them exclusivity (big hint)?

When you say the 80% you can't reach - how do you know it's that many, or is that what they've told you? Is that the scope of their email list? Will they actually recruit fresh leads for you - or just leverage what they've got?

I know a little bit about the market, and the percentage is more or less correct. They are locally based company selling their clients some other products. The nature of my software is such, that their clients are my clients, too. I want to reach those 80% through them, giving them commission. I think they would want the exclusivity, which is OK, if I can make such rules, that they will sell to 80% of their clients.

So:
- lower percentage for my current clients
- large percentage for new clients
- yearly contracts, evaluation before extension
- even if they have exclusivity, I will keep selling to current clients, if they come to me, for next 6 months

Does that sound reasonable for both sides? anything else I should look into?

You are going to have to discuss this with your opposite number. I can't help in this given the information to hand.

If they are a Dutch company, believe me, I can run rings around them and do it before my coffee's brewed. Believe me, just because they're in your niche doesn't mean they've tapped all the market potential. They might think they have, they simply don't have the techniques to back up any argument.

Good luck with the negotiations; I wish you well in your endeavors.

If you want to leave this open, some of the other forum members may be able to construe more than I can from the info. you've given.

If you need further help, you can always post here!

Thanks!

To be honest, I wasn't much help, was I?

No, you steered me into right thinking... although you started with all the 'fear factors' (understandable, most peoples first reaction is fear of new business, then opportunity - same reason I came here for help, I was afraid to mess it up...), so I was able to start thinking to look forward new partnership, but still protect my past work. So, thank you, sometimes you just need a 'sounding board', right?

You could have had all that in a quiet corner of your local bar with a few of your mates.

Because in marketing terms, I didn't even begin. I wouldn't need to know the ins and outs - just what your stuff does and what pressures it relieves. Just like the "corns gone in a month, or your money back" blew the market apart and kept doing so for three decades.

If your Dutch partners don't demand exclusivity consider what I can do. Because they're banging the rocks together. They'll have cheesy one-liners in their tele-sales scripts that'll have the receptionist yawning. What's more she'll have heard it three times that week already because the marketers farmed it out to four different tele-sales groups.

Not one of whom understand even the basics of marketing. They'll come up with the equivalent of the guy at the bar hawking knocked-off televisions "Listen chum, I've gotten these great TVs. Only $500" and when you get it, the box is dented, the remote's missing and the instructions are in Korean. Sure, that's working on your fear - only I know these guys and their techniques. In a year's time you'll know the reality as well as I do. So it's not playing on your fears - it's a demonstration of reality.

Do you want someone like that - or do you want someone who will take responsibility too? Because I've already done that right here, right now. I don't come up with sob stories as to why things didn't work, I don't tell you which prestigious university I got my MBA from so you feel you're in the wrong. I tell you straight.

Do your prospects speak Dutch/Flemish or English? I can do all three. And then some.