Channel Sales | Marketing, Promotion & Sales Consulting for Business

In the 1980s and 1990s it was en vogue to implement enterprise sales strategies on a “win win” basis with channel partners. This strategy was built on the premise that working with channel partners to achieve important, but differing objectives was a highly valued endeavor and, in fact, the best way to move solution sales forward to its next level of enterprise sales effectiveness within a channel partner model.

In 2011 this strategy of mutual attainment of objectives is passé. Now what matters is winning the business by delivering precisely what the channel partner needs–end of subject. Most products and services vendors have to make do with whatever they can get out of the sale, and make do without complaint. Of course there are astute marketers who, despite market conditions, still manage to sell products and services their way, thereby achieving their objectives, but they are clearly in the minority.

What kind of effect has this market shift had on Channel Sales? The Marketing Leadership Council of the Corporate Executive Board published a piece on November 22, 2011 by Shelley West (http://mlcwideangle NULL.exbdblogs NULL.com/author/swest/) on this topic on their “Wide Angle” Blog, Give Your Channel Partners the Right Incentives (http://mlcwideangle NULL.exbdblogs NULL.com/2011/11/22/give-your-channel-partners-the-right-incentives/). Ms. West astutely points out that financial incentives simply based on purchasing volume don’t work: “While simple to administer and easy to track, volume-based incentives often don’t deliver what we want them to.” Ms. West goes on to refer to a complex incentive program which, she contends, empowers the manufacturer/services provider to directly manage four key points with regard to channel partner performance, including “Core Product Sales”, “Services Solutions Integration”, “Sales Growth” and “Partner Investment in Relationship.”

All well and good, but I have to ask the question, is there a real partner in Ms. West’s model, or are we providing incentives to prod a reluctant business into a partnership? I suspect the latter. I would rather see partnerships for my clients orchestrated around plain and simple operational assumptions (as opposed to financial assumptions), including:

We built it, your selling it
You manage the end customers, we have the right to influence them, meet with them periodically, but with you tagging along
We create our brand, you receive sales leads

Financial incentives ought to be derived from margin. End of story.

The pollution in today’s channel partner programs, as I see it, stems, in part, from an effort on the part of some manufacturers and service providers to maintain direct selling efforts to the end customer while ostensibly operating a channel program. This pollution makes of the channel partner a rather useless component who will have to be cajoled and pampered into performing some type of service. I would rather remove the pollution and then address channel by crafting operating procedures that make sense for partners and manufacturers and service providers.

It makes sense to provide leads to channel partners who can be counted on to follow up on leads. This assumption may seem costly, but it makes sense. Here’s why: One of the key value adds for channel partners is their position with regard to procurement for major accounts within a geographically local area. The days are long gone for most major accounts as to doing business with just anybody, let alone a company that is largely under the radar. The probable answer on this one is a very likely “no thanks.” So what’s a poor under the radar company with a channel strategy to do to get a critical foot in the door at that behemoth business down the street? Pass the ball to the channel partner on your team who is listed with procurement and fast track that order along your sales cycle.

Try this strategy and you’ll probably like it. Further, don’t be fussy about what constitutes an acceptable follow up on a lead. In some cases it may be no more than pushing the order through procurement or merely catching it when procurement goes out to the roster of approved vendors to see who can fill the order. Be happy that you had a mitt out there to catch the order and don’t complain.

All of the above is not to say that channel partners will not add value to sales development efforts. Rather, I am pointing out these factors to help you expand your concept of what actually amounts to value add to include just catching an order coming out of procurement. I have literally worked with clients who lacked the public financial credibility to pass a procurement review. Without a channel, there was no recourse but to look to wealthy partners to collect the order, else the business would have been lost altogether.

Of course there will be certainly channel partners who can be relied upon to make tons of effort to promote your product with each and every lead that you bequeath upon them, but be wary. A partner may make that effort to crack into a top account riding along your lead. I applaud a business that will go an extra mile to bring my product home to a new account. But I would rather stake my chips on a partner who is already a prime vendor to the prospect.

In sum, managing channel requires a certain finesse and certainly does not lend itself, at the onset of a channel program, to rigid policies and guidelines. Maintain flexibility to win at this game.

Marketing, Promotion & Sales Consulting for Business

IMB Enterprises, Inc., Huntington, NY 11746 +1 (631) 673-2929, imblonder@imbenterprises.com

Category Archives: Channel Sales

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