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Sell-To or Sell-Through?

Not a week goes by in our weekly investment committee meetings when one of us doesn’t ask the question, about a business we are evaluating, “Are they successful at selling through, or just selling to?”. The distinction may sound inconsequential. But I suggest that it is critical.

“Sell-to” means you are good at selling your product or service to a company. Lots of great logos on a slide in your presentation. This is generally a good thing. But it is often not enough to make for a successful business

“Sell-through” means usage. If you sold your product to Cisco, how many of their employees are using it? How often? For how long? If 100,000 people downloaded your iphone app, how many played it once? How many play it a second time? How many play it every day? For how many minutes a day? How many uninstalled it? 

Many companies make the mistake of thinking that their job is done once they’ve sold a product. It isn’t. Usage must be taught. It must be encouraged. It must be sustained. It must be kept fresh and interesting.

Great companies excel at selling to and also selling through.

Good companies might struggle at selling to, but will usually do ok if they excel at selling through.

But companies that don’t know how to sell through, will generally fail, even if they get out of the gate quickly but signing up a few marquee customer who were sold to.