Is channel sales really the way to go?June 30, 2009
In the current climate all of us are looking to generate more leads, make more sales and lower operating costs. The thought of doing your sales and business development via an indirect sales channel operation suddenly becomes very appealing lots of sales people, who you don't have to employ, out there selling for you.
Problem is you still have all the responsibility for the numbers but no authority to back it up. Your own sales guy does not perform you can put them on a plan or even fire them. The channel guys don't perform you've got a problem but little authority to sort it out.
So you want to set up a channel sales program? Here are some tips based on my channel experience that goes back to 1983!.
1. Work with your channel partners helping them to write a plan for the business they are going to do for you nothing complicated, you can use a template to guide you.
2. Do your margin analysis early not as an after thought, your channel needs to earn enough margin points to sell your products, you neeed to earn enough to be able to let them.
3. Select your channel manager carefully, you need skill to run a channel but above all else you need experience because you need credibility.
4. Make sure you are planning for managing channel conflict there WILL be some, either with your own sales team or with other channel partners.
5. Make sure you get the pricing strategy right and be careful about how you "publish" it, you don't want the end user to think they can play you all off against each other further eroding revenue and margins.
The bottom line? Channel sales is not an instant panacea for winning new sales without the cost of a sales force, it needs thinking through, planning and controlling. We would always advise get some experienced help writing the plan and training your people.
Channel sales is the way to go so long as its by design and not by accident.