Channel Sales Management; 5 Reasons Your Channel Sales Strategy Is Not Working
Tech industry is relying a lot on indirect B2B channel sales strategy to drive revenue growth to the business. This seems such like a great idea to rely on distribution and channel partners existing and established relationships to build a business. However, it is not that simple.
As more and more technology companies are expanding their sales operations to new countries and going global, the challenge of setting up a scalable and predictable revenue growth is becoming more and more complicated. OK, the solution seems obvious. As you are growing in new markets and sectors, industries and countries, it seems more obvious to think of already established sales channels to utilize as the primary choice.
No matter if you are startup or established enterprise, you have to make a fundamental choice on how to structure your sales operations: direct sales or channel sales. Now, for many organizations it is a combination of both in a matrix like environment. However, from the structure and legal perspective, majority of technology and hi-tech companies choose channel driven sales structure to utilize and build their sales capabilities based on a strong channel.
The concept is easy. You set up a channel partner strategy and portal, and then start to recruit new partners that you think is aligned to your business.
In parallel, the vendor is allocating dedicated direct sales team as well to go and hunt net new business and engage directly with end users. However, when this leads to sales, the order will go through the channel and facilitate through one of the partners that has a established relationship with end user.
Here is a simple drawing on how it looks like:
Vendor — → Distributor — → Partner — → End User
| — — — — — — — — — — — — — — — — — — →
What a healthy sales channel looks like
A healthy sales channel is proactive and engage a lot on pipeline opportunity. They are keen to understand how vendor is able to help them and challenge vendor and it’s distributor on coming with new ideas on how to drive growth and how to expand the sales. They are highly trained with sales, pre sales and services certifications and have full confident on the products and services. They have a strong marketing team to execute on ideas and tools that the vendor is already provide for them to build a strong brand.
Their sales team is been compensated on each meeting, demo, proof of concept and closed deals with the vendor and they are highly engaged with vendor’s events such as global sales kick off and technology summits.
Vendor does not have to micro manage channel partner activities, because they are strategically aligned and plan for each quarter in advance. There is normally a established sales and business plan so every body know what is the expectation and what numbers and activities they should deliver.
This is a true form of partnership and both vendor and partner are happy, fully engaged and thinking on how to make things better moving forward.
However, not all channel sales partnership is like that . . .
The right partner
This is by far one of the most important terms I head in this industry. Everybody is asking themselves: Do I have the right partner? Is this partner the right partner? How the right partner will look like and how do I know, if this partner will or will not be my right partner?
Having the right partner is becoming so important that it immediately set the organization for success or failure. Let’s face it. Acquiring new partner will consume time, energy and resources. You should invest a lot of time initially onboarding and training new partner both from technical and sales perspective. The wrong partner will waste a lot of time from your resources and will not deliver the results you expected.
It is important to set up some ground rules or guidelines for your sales team so that they know who the right partner will look like and how to examine the prospects against these criteria. It is important to know that having no partner is way better that having a bad partner. Because in this situation you are clear that all the sales effort is on you and you will not waste time on the wring partner.
Here is some ground rules that your channel managers should consider when recruiting channel sales partners:
1. What is the partner’s existing business?
2. How they bring revenue to the business?
3. What is their current offerings, products and services?
4. How your products and services can fit into the whole portfolio?
5. What is partners leadership vision and plan for the next 2–3 years?
6. Who are their existing customers and who they are looking for in the next year or two?
7. What is their branding and marketing plan for growth?
8. Can they allocate dedicated resource to your business? If not, why and how we can expect the growth?
Partner training
Everybody love great training programs and everybody knows how important it is for partners success. However, still we see training blueprints that are out of date and/or poor quality in terms of graphics, resources etc.
Partner training consist of two phase. The materials and blueprints and also the delivery methods. Vendors like Cisco Systems excel at both aspects. They have rich set of up to date knowledge base with huge resources both at tech and sales side of the business. Their online platforms are huge in terms of articles, design methodology, troubleshooting, service delivery, post sales project based and checklists.
In terms of delivery, vendor should have or train a generation of public speakers that are comfortable of speaking in front of population of 5 and up to thousands of people. No matter what the subject is, tech or business, these experts are ready to deliver the knowledge and information about their products and services and make a massive impact.
Channel infrastructure
These are normally the tools that channel partners can use to get specialized services from vendors. Services such as online training, marketing materials, deal registration, partner performance in terms of sales, number of people who are trained, events, product info sheets, competition analysis and other necessary materials to ease the sales process.
The more mature are these platforms and processes, the more engaged the partners will be and the more enjoyable will be to work with the vendor.
Products and support
I cannot stress more that having great product and service support is very important to the success of the channel partners. If there are issues with specific scenarios that the product cannot fit or there are limitations, these needs to be communicated properly and clearly with partners. Nothing is worst than positioning a product to fit all the situations and use cases, but it actually is not!
Lots of vendors lost trust with the partners because of this fact. It is important to make sure partners understand the market positioning and perfect customer persona for the product and solutions of the vendor.
Marketing and branding
Partners are looking for vendors that can help them grow their business and acquire new customers and logos. This simply means the branding and marketing activities should be focused and invested in these areas. This means vendors should have a solid understanding on how the partner business works and what are the triggers that are important for partners. Vendors should have a strong understanding of partner existing customers and jointly plan to achieve growth with marketing and branding activities.
Vendors can share all these learning experience with other partners, of course in confidential way, to boost growth and adding value to the market place.
About Author:
Houman Asefi is world authority and visionary on technology sales and startups, award finalist blogger (http://www.houmanasefi.com/) focusing on building and scaling sales strategy and making sure companies achieve their targeted revenue.
Contact Info: Houman Asefi Phone Number: +61 452 219 022 Email: houman.asefi@gmail.com Blog: http://www.houmanasefi.com/
