Proceed on Channel Sales Strategies with Realistic Expectations of Value Add

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.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved


Leverage Channel Partnerships Fairly Maintaining Non Exclusive Relations Where Possible

Product marketing plans for products and/or services targeted for channel distribution must include safeguards against the possibility of granting exclusivity to specific partners. The trick here is to proceed carefully and in such a manner that exclusivity is never presumed, implied or ever delivered.

Typical channel distribution prospects are familiar with negotiations based on non exclusive rights to sell products and, in most cases, there is no problem navigating through these negotiations to a successful conclusion for all parties. But much responsibility rests on the shoulders of the manufacturer or ISV to maximize the benefit of channel partnerships framed on a non exclusive basis. Indeed, “more the merrier” ought to be the underlying objective of all of these campaigns. The key driver is revenue; therefore, the more sales personnel selling the product for you, the better.

Consider the downside of granting exclusivity to specific partners: revenue potential tops out at:

  • The outer limits of geographical reach for the channel prospect
  • The maximum revenue potential represented by the size of the vertical market size serviced by your channel prospect, and, of most importance
  • The channel partner’s reputation at any given moment in time

Better not to go there.

Better, as well to nest your channel strategy (built on a resolution to maintain non exclusive affiliations with partners) within a greater marketing pan that augments channel revenue with a direct national sales effort and a white box syndication effort. Marketing management should play the role of ambassador to the market, spending quality time with any/all partners to indoctrinate them to the plan.

As well, marketing management should present the broad product value proposition directly to the marketplace. This effort will be particularly useful for partners as it will provide the wind to their sails, lowering the burden that would otherwise fall on them to magnetize the market for the product.

A comprehensive plan as I’ve just sketched can take an emerging business very far along with regard to attaining critical “escape velocity” to power into revenue positive territory. Of course, cash positive will also spell that much more benefit for the business, not to mention providing the fuel needed to expand programs and, potentially help management decide when it makes sense to eschew under the radar marketing for something more palpable.

Nevertheless, the final decision about whether or not it makes sense to switch from covert to overt marketing shouldn’t be made just upon revenue levels. More of that in another post.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved