Eleven Easy Steps to Success with a Sales Channel: Part 1

Have you ever noticed that some “great companies” in the market with brand name products and services aren’t meeting the sales goals expected by management?

Their products and services are consistent under-performers!

Management often doesn’t understand the cause and begins one or more of the following aggressive campaigns to bolster sales revenue:

  • Replaces sales leadership or re-organizes sales management
  • Increases branding for company identification
  • Orders an aggressive marketing communications program to improve corporate image
  • Accelerates new product introductions to give the channel partners more to sell
  • Adds more channel partners to increase coverage
  • Replaces channel partners to increase effectiveness
  • Increases product training to improve channel partner win rates
  • Expands the publication of articles and white papers to position the company as a thought leader
  • Micro-manages the sales funnel
  • Changes the commission structure

All of these strategies appear on the surface to be worthwhile efforts and they may very well be the right strategy. Our experience however, indicates that one of the most effective strategies is to look at the sales channel and ask how can we increase the “mindshare” of our channel partners? To receive a disproportionate “share of mind” with the channel requires a business strategy that leads to a differentiated relationship. A pillar of this strategy is “to help the channel grow their business and become partners in their success”. This is imperative when growing or building a channel. You must focus on your partners business and assist them in being successful with your products and services.
Eleven Easy Steps-stairs

Eleven Easy Steps

There are 11 steps to winning the “mindshare” of channel members and then becoming partners in their growth. They are as follows:

  1. Build a Strong Foundation: The contract is the foundation for the relationship. Yes, it starts with the contract! The foundation can be as strong as concrete or as fragile as a glass. Which is yours? The contract must benefit both parties and be a balanced equation.Channel partners know they can be replaced at any time because of a change in strategic direction, company growth or as a result of a merger, divestiture or acquisition. Be sure your contract benefits the channel partner who is working hard for you if one of these untoward events occurs. Protect their commissions for a period of time, six months is reasonable, on all sales that emanate from their sales funnel following termination of their contract from events that are outside their control. Likewise, if they are not performing they deserve to lose the line but termination should not be a surprise. Review performance routinely and provide feedback constantly.
  2. Treat the Channel with the Same Reverence as Your BEST Customer: Do you view your channel members as partners or adversaries? Do you work with them in harmony or conflict? Do all company departments support the channel especially accounting and legal? Do you set a company tone that the channel is important to the company’s success or do you set an example that the channel is a necessary evil and not to be trusted? Channel partners know if you treat them with respect. A lack of respect will result in a lack of sales effort. They will take an order but not aggressively sell your product. They will search for alternate business lines and they will build their business model for growth without you.Lead Don’t Manage: Channel partners are not employees. They are not a direct sales organization and cannot be managed like one. Recognize you don’t own their time.
  3. Lead them through motivation. Over communicate. Set revenue and product mix goals together. Celebrate wins! Make working together fun! Channel partners are human beings who respond well to recognition. Take a hard look at your company’s importance to the channel. Channel partners carry multiple lines. The lead product and company in each of their business categories will get their time. If you are an ancillary or inconsequential product within the channel’s business you will not get much of their attention. Only dominant players in the market (defined as having 40% plus market share) can dictate to a channel. Others need to offer a strong dose of motivation and communication.
  4. Provide On-Going Education: Channel partners are thirsty for information that will make them more efficient and effective in their sales endeavors. No one understands a sales funnel better than someone who earns 100% of their financial remuneration through pay-for-performance. Provide continuous and variable ways for your channel partners to learn more. Do it at your expense. Yes, that’s right! At your expense. The more the channel partner knows about the science of selling and your product and services the more they will sell. Remember if they make money you make money. If you are not providing online product education through e-learning and web-casts you are behind the times. Drive relevant information to the channel. One of our channel partners routinely provides us with the latest research in sales effectiveness. This expands our knowledge base and makes us more valuable to potential clients. It also provides us with a valid business reason to engage a prospect or an existing customer.As part of the education you provide, ensure that your channel can articulate the value proposition for your products and services. Train them to sell a solution and not a product. Remember, no one buys holes but they do buy drills to make holes.
  5. Create a Channel Council: Company personnel who don’t routinely carry a bag or engage in meaningful dialogue with customers on a daily basis cannot develop strategies for success. If you want to tangibly demonstrate that the channel is important to your company’s success create a channel advisory council. Let the channel advisory council represent the channel members. Bring the channel advisory council together periodically for strategy sessions. Listen to their input and rotate members yearly so all channel members can participate. The channel is the closest to the customer. Listen to their input. You will benefit with new strategies and the sharing of best practices. Treat your channel partners as strategic resources and watch your revenues soar. Listening to the channel means responding to their suggestions and taking action. Inform the channel that you have heard their input and communicate the decisions you have made. Channel partners will not always agree with your decisions but they will respect the fact that they have been heard. If you listen to the channel, you will be besieged with ideas for growing the business. If you don’t listen to the channel the silence will be deafening.

In our next blog we will continue this discussion and provide you with six (6) more steps to winning the “mindshare of channel members.

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