Posts Tagged ‘channel sales’
Q&A: Setting up Channels Sales & Direct Sales to Play Nice
Q&A’s are excerpts of questions I have answered as part of Sales Laundry or other forums that I am apart of. If there is a relevant sales message for the masses I post it here to share, gather feedback and discuss.
Q: Channel Sales & Direct Sales Teams: What are your thoughts on best practices for structuring a sales team that maximizes sales for both groups and minimizes/avoids conflicts.
A: I don’t know your specific industry, but my experience comes from technology, so that is how I have framed my comments. Here are my general thoughts:
The Direct Sales Team
Dividing the loyalties of your direct sales team between their own numbers and helping out the channel sales organizations can be a recipe for disaster. If times get tight, I have seen direct guys pull all sorts of tricks to take a juicy channel deal direct. The hedge to that is a partner deal registry and clear rules of engagement, neither of which is ever a bad thing. On the other side I have seen channel partners act like blood sucking leaches, draining a manufacturer of resources and continually begging for leads. It can get ugly either way.
I would seriously consider putting a dedicated sales resource in your office supporting your channel partners exclusively.
You need your channel organization to spend the time and money needed to get trained up on your products and dedicate enough mindshare to them to get them heard above the noise of their other offerings.
Use your internal dedicated sales resource to go on sales calls with them and help them put sales proposals together and nudge them along the sales funnel. Force the dedicated channel sales representative to drive all revenue through the partners. That way you have someone other than your Channel Manager working in the channels best interests on a daily basis. Put a smart sales person in that role that can leverage the legitimate leads and deals that he uncovers in his patch into incentive for the partners to get up to speed and stay current. You can use the leads to reward those partners that are moving the needle for you, for priming the pump for new partners or as needed to help steer your channel sales force.
This dedicated sale representative can also be a good entry level sales position for your company in more established territories that you can develop into a direct role if the compensation model works like that for you. That way they have your channel supporting them a bit as they come up to speed so you don’t have the huge dips in productivity when a new guy takes over a territory.
Your dedicated sales representative should support your best partners and their best reps to keep the pipeline full, then spend time working your best partners second tier reps, other partners and finding new partners that are not going to stomp all over one another in a given geography. Cut the bottom 20% of your partners and all those 1-off deal guys that pop up.
The Channel Sales Team
Channel organizations are often times the whipping boys of the direct sales team and feel they drive product sales but have no real line of communication with the manufacturer to discuss strategy or to communicate feedback they get from the field. Listen to your channel. Typically the top 20% of the reps at the top 20% of your channel partners are driving the majority of your business. You need to talk to them and understand their challenges with your organization if you want the real scoop. The execs are usually not as helpful in the day to day stuff and Sales Managers are sometimes in the weeds because they were great reps that got promoted without any training.
Give the channel a mechanism to register their deals and be protected from your direct reps. Give them ready access to sales and support until they have their own resources trained and representing your brand well in the field.
That is about 1% of the topic. You can check out The VAR Guy for dedicated blogging on technology channel sales.
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13 Key Components to Building and Maintaining a Successful Channel Organization
As an executive responsible for sales, it is a much easier to manage a sales organization that consists of employees you compensate directly than a diverse channel organization out of your chain of command, but for all of its challenges, a good channel organization can improve sales volumes by an order of magnitude when it is built it right.
Here are some tips and suggestions to help you get it right.
- Plan it. Plan out potential geographies, what an ideal partner looks like, revenue targets, supporting resources you can commit, what the incentive/interaction with your internal sales team will look like, partner training requirements, etc. You are setting up a whole new sales organization; give it the same care and planning you would give any other new business unit.
- Meet with all tiers of the sales team. When you visit with channel partners or channel partner prospects, meet with the executives and JUST AS IMPORTANT; meet with the sales managers and the top 20% of their sales reps. It is one thing for a partner exec to say they are going to sell your product, it is quite another for the guy doing the selling to make that commitment.
- The 80/20 rule is in full effect. 80% of your business will be done by 20% of your partners and 20% of the reps at your best partners will drive 80% of your revenues. For the most immediate impact focus your training and resources on this Top 20 of 20 group.
- Bandwidth. Make sure your partner reps have enough mental bandwidth to add your products. The sales reps that are going to be driving your revenue numbers can only sell a certain number of different offerings before products begin to get lost in the noise. Talk to the sales managers to understand the partner’s offerings list and get a commitment from him to help drive your product. In many instances, to truly get behind your product he is going to have to down play others.
- Identify key personnel. Understand who the key reps are for your channel partner, by the individual office if you can, and focus your efforts on winning over that group of people. If the top/most influential rep is not buying into your program, work on winning over the guy who always comes in second each month. He will typically be hungry and open to new ideas to help him beat his chief rival.
- Show them the money. Show them how to make money selling your product with real supported case studies or testimonials. Video testimonials from reps that have been successful selling your product are the best pitchmen.
- Close their leads on your dime. Have them gather their best leads and send a sales professional with your channel reps to support them as they come up to speed. If your rep wins a deal on one of these calls, give it to your channel partner to prime the pump, but don’t let this become a habit. Stay with them until they can sell without you.
- Line up sufficient resources. Make sure you can dedicate HEAVY resources to support a new channel partner on their initial ramp up until they can fly on their own.
- Manage the technical transition. Make sure technical resources are available until their internal resources come up to speed. (This will likely happen when real revenues start to roll in because no one wants to commit to technical training until they are sure the product will be a permanent part of the lineup.)
- Be honest. Give realistic first year sales numbers; be honest about what kind of effort it will take. Anything less than honesty can destroy your partnership.
- Protect partner revenues. In your zeal to dot the country side with solid channel partners, do not bring new partners on board in territories with established partners and expect them to compete for the same target base. There is an exception to every rule, but think twice before you stomp all over this one.
- Take interest in your partners business. Your channel partner should be bringing their own “value add” and sales infrastructure to the table for their part of the partnership, show them how to increase their value add with your offerings and do your best to help your channel partners business be successful.
- Define clear rules of engagement. Don’t let your internal sales team feed off of leads and prospects uncovered by your channel partner, protect them and their margins. Develop clear rules of engagement because it will come up at some point.
Bonus Tip #1: Watch for the 1-off partners who happen to be working in some other area of an account and get wind of an opportunity with your product and an existing partner. It may make sense to put these deals together from time to time, but pay close attention to their activities. A 1-off partner can suck up a lot of your resources better spent on partners that will drive consistent revenue.
Bonus Tip #2: If you find your channel partner coming to you for discounts to win deals consistently or selling on price and destroying your perceived value add in a given market find out why, find out why their own value add is not helping them hold margin, and be prepared to turn them loose. Again, there are exceptions to every rule.
