What if we told you that you don’t really have to sell a product or service to make sales?
Sounds intriguing and complex, right? Well, that’s completely plausible thanks to the recent developments and evolutions in business operations.
Today’s businesses are completely different from businesses that were established a decade or two back. The consumer behavior was different, the avenues to generate revenues were limited, there were less marketing and branding opportunities and was mostly restricted to print and mass media, competition was less, purchasing powers were different and the list could go on.
But today, businesses have a completely diverse and specific set of challenges in front of them. Almost all the factors we had mentioned above have evolved, been overcome or changed over the years.
For instance, there are several digital avenues businesses can promote and reach out to their target audiences today. Consumer behavior has changed completely in the fact that we can now predict what a customer would purchase 30 days from now. And more importantly, the avenues for businesses to generate revenues from have also popped up and increased.
That’s why we brought out the fact that today, businesses no longer have to sell to make or push sales. For those of you still wondering, understand that AirBnB – which is probably one of the largest accommodation services providers – does not own a single hotel or property. Or, consider Facebook or Instagram that are prominent despite not producing an iota of content in the market.
Well, it all boils down to the business model you implement for your venture. And as far as the hints we’ve been throwing around on running a business without making sales are concerned, we will shed light on two solid business models that will introduce you to a whole new world.
Say Hello to White Label And Referral Programs
In simple words, a white label engagement program is where you offer your brand collateral such as logos, operating principles and procedures, support and more to a different company for it to use and project as your company in the market.
Let’s assume you are the parent Company A and Company B is a different company that has enrolled on your white label program. The Company B will appear in the market as your Company A and will sell its products or services under your name.
Benefits of White label Programs
To Parent Company
- Scalability – where you are adding newer products/services in your inventory and scaling up in the market
- Optimized Revenue – where you have newer avenues to generate income from regardless of geographical locations
- Reduced Overhead Expenses – where you don’t have to maintain a huge pool of talent to deliver services or have the adequate real estate to accommodate them
- Improved Visibility – where the credibility of your business keeps improving as smaller businesses use your brand name for their operations.
To White labelled Companies
- They have a dependable name backing them for sales and support.
- They can significantly increase their profits by associating themselves with a bigger brand.
- They don’t have to reinvent the wheel of business sustenance all over again.
- They are more likely to retain clients.
Referral Programs
Referral Programs, on the other hand, are where your customer or a member in your referral network brings you business or customers. For instance, the member could have been your past client who was really impressed with your work. They could get new businesses in their circles as your new clients. Or, there could be smaller businesses in your domain/niche who would sign up for your referral programs and make use of your branding and name to get customers for you.
Every time the referral they bring is qualified and converted as a customer, the referrer gets an income or commission based on the contract agreement signed.
Benefits of Referral Programs
Similar to white label programs, referral programs also have their fair share of benefits. Let’s explore some of them for both the parties involved.
For Companies
- They get new clients with this program without having to put too much effort in generating leads.
- Their lead acquisition expenses come down as they have another solid way of generating leads.
- They become more credible in the market.
- Their market reach only keeps improving.
For Referrers
- They get rewards or incentives for every successful referral.
- They know that the brand they are referring to is good because they have first-hand experience of the product or service.
- They have a steady source of income with them.
- They only have to worry about referring clients and not anything else like business operations, expenses, service delivery and more.
Challenges In These Business Models
As interesting as they may sound, these business models are not without their challenges and hindrances. On paper, it might appear that these are the two most ideal ways to generate income and grow rich but in reality, the challenges simply keep respawning.
If you are someone who is captivated by these two business models, you should also understand the day-to-day challenges involved. From our experience and expertise, we have handpicked a few challenges.
Let’s find out what they are.
Communication Gap
Communication gap is a plaguing concern that makes your process and business fumble. This could be gaps in terms of project requirements, where what is required and conveyed are totally different. It could also be missing out key elements or aspects of projects that leads to delays in project delivery or wrong deliveries. In sales, communication gap is prominent where associates promise features and functionalities without consulting developers or stakeholders, which further widens the communication gap. To keep everyone on the same page without a binding tech element is very difficult.
Lack of Technology Understanding
The member in your referral network may be an excellent salesperson but chances are that they wouldn’t understand something tech-related like block chain. So, if block chain is part of your product or service, the way your member pitches it to a client is way different from your purpose and execution with it. This fundamental mismatch in tech understanding is a plaguing concern in both the programs.
Time Differences
When geographical frontiers are no longer barriers for your business through the program, what becomes one is the differences in time zones. Your referral member or a white label company might schedule meetings at odd hours and when you have back to back meetings and sessions, the challenge only becomes more complicated.
Quality of End Products
Since there are two different parties involved in the delivery of one product or service, the way end products are visualized and sold by the two is way different from each other. The end client has a completely different view of what is sold and what is received.
Transparency and Trust
One of the major challenges, where both the parties involved should be transparent in their operations and collaboration. For rewards or customer retention, no cooking up of numbers or policies should happen at both the ends.
Mindset Differences
When the end goal is not clearly defined by the parent company, it can give rise to mindset differences. In this case, the referral member or the white label company might be working towards something the parent company is no longer interested in. Mindset differences could also be in collaboration attitude, customer approaching strategies, modus operandi and more.
Scope Refinement
When the referral or the white label company does not communicate the project details precisely with their customers, it could lead to consistent changes in the project details. Such scope creep costs the parent company its time, money and efforts and leads to an indefinite delay in project delivery. It also dilutes the quality of the product.
Non-Acceptable Price
This happens when the referrer or the white label company quotes a price that is way too less or more than your set standards. It neither resonates with what your brand stands for nor does justice to the quality provided.
Customer Support
Customer support associates have a hard time if the associating parties are not trained properly on their products and services. Any wrong information presented by them results in a contact to the customer support portal, where they have to deal with dissatisfied customers.
Lack of Commitment
This is a two-way challenge, where the parent company could fail to follow up with their services or deliver a substandard product. Conversely, referrals and white label companies could be taking your business for a ride with lethargic customer approaches, inadequate knowledge about your products or services and more.
Scaling Of Operation
When you have more referral members or white label companies, you by default have more clients to cater to. In that case, your scalability becomes important as it has to be seamless and without disturbing the everyday operations of your business.
System Of Execution
When you don’t have a standard operating procedure for all the tasks you have, there would be differences in execution methods. This gives rise to varying product qualities that could be evident.
Level Of Experience
Collaboration is important but what’s more important is choosing your collaborator. An inexperienced referrer or a white label company that only focuses on making money with inadequate domain experience is bound to stall your company’s growth. On the other hand, a well-experienced company/agency can take yours to new heights. It all boils down to levels of experience.
Cultural Differences
Similar to differences in time zones, differences in culture plays an important role. The way of working in India is different from the way of working in Japan, the US or Australia. These differences give rise to unique customer expectations and collaborations which the companies have to tackle.
No Ethical Standards
This is extremely important as this factor is directly associated with the reputation of your brand. A referrer or a white label company resorting to black-hat techniques is a threat to your company’s existence. People could sue your brand if an undesirable consequence crops up. The ethical values your collaborators bring to the table are crucial.
Absence of Modernization
If you’re a high-tech company with modern tech implementations and automations and your collaborators are still using obsolete technologies for customer interaction, retention and business operations, it could cost your company time, money or both.
Low-end User Engagement
The end user or the customer has to be always informed about the progress of their requests/transactions. When your collaborators fail to communicate project details to them and if that stems from your errors, it results in poor user engagement. If this happens consistently, you are also likely to lose your customers.
Unclear Implementation Plan
Another challenge prominent in IT projects and deliverables, where milestones are wrongly defined or are defined based on assumptions. Without a solid background, these milestones misalign the development process leading to delayed deliveries. This not only brings in scope creep but pushes the project deadline as well.
Overcoming The Challenges In The Collaboration Models
Saw how many challenges businesses face on a daily basis? But all of them could be fixed, automated and sorted if you follow the below mentioned solutions. They are simple, straightforward and easy to implement.
Clear Communication Channel
This can be achieved through –
Single point of contact for entire project journey.
where an associate can be assigned one particular customer or a referrer/white label company and all concerns from them could be handled by the associate. They could be the account managers of sorts.
Centralized communication channel via PMS and Communication board
A solid project management system that streamlines all project details from all possible sources and communicates them clearly to all stakeholders involved. This also includes scope creep for better planning and execution.
Streamlined process of design, development and delivery
With the help of agile or DevOps frameworks, where a systematic approach to development can be taken to avoid delays and confusions in service delivery and project development.
Proper documentation to avoid any and all communication gaps.
Trust & Transparency
NDA, SLA and MSA (Master Service agreement)
All the parties involved should be offered an NDA (Non-Disclosure Agreement), SLA (Service Level Agreement) and MSA (Master Service Agreement) to limit and acknowledge inclusions and exclusions.
Anti-competition and Non-Poaching Policies
The parent company should also impose strict anti-poaching and anti-competition practices in place to ensure collaborators don’t end up owning the clients they bring in.
Quality
125+ experienced engineers with 1250 years of cumulative experience
Have a solid development team in place that has experience and expertise in several crucial aspects of product development.
Tailor-made proven processes based on 20 years of experience
Implement customized processes and workflows that translate to faster deliveries and reduced scope of errors.
In-house team and ability to ramp up in 7 days
Provide training frequently to keep the talent-pool abreast of all tech advancements and happenings.
Better Pricing
Global reach with the best offshore development center
Have multiple plans based on outsourcing countries and tailor pricing based on project requirements.
Smart use of DevOps and open sources
Make full use of open source and DevOps frameworks and technologies.
Work on a retainer basis whenever applicable.
Aim for long-term business partnership.
Support
A team of qualified and experienced analysts, SMEs at your disposal always
Recruit and deploy subject-matter experts and experienced client-facing associates to avoid communication gaps, poor customer engagement and similar complaints.
Numerous QA cycles and Post-sales support
Implement several layers of quality assurance practices in the workflow so the final product is airtight and flawless.
Have the most solid post-sales support to pave the way for customer retention.
Wrapping Up
We are sure that this extensive post would have helped you understand the two distinct business models and have a better visual of the associated challenges and solutions. If you’re looking for a reliable partnership program for your agency and don’t want to stumble upon any of these challenges, get in touch with us today.
Explore our white label Partnership and referral programs and become our evangelists today and make profits tomorrow.
Get in touch for more details.