Before there was Amazon or any of the other online marketplaces, most manufacturers had two choices for sales, direct and channel partner sales. Smart companies tried both approaches and either stayed with both or made the decision to concentrate on one of them. There are advantages and disadvantages to using both strategies. Direct sales teams require a substantial investment in talent, training and technology, but they are focused on your brand. Channel partners and distributors work independently and usually offer more than your product line, maybe even competitor products, but your investment is relatively low.
That depends on a number of factors including:
Let's assume that, like many manufacturers, you have decided to use channel partners as a primary conduit for sales. Cisco, for example, sells directly to only 30 enterprises worldwide, representing only a small portion of the company's installed base. The lion's share is sold by its 60,000 partners worldwide who generate more than 85 percent of Cisco's revenues.
Are your channel partners performing as well as Cisco's?
There are three common challenges to working with channel partners, and here's where Marketing can help.
They're focused on building relationships with customers and rely on them to know what they need. It's not so much a matter of helping them find the best solution, rather to close repeat sales and keep the pipeline open.
In B2B, especially industrial manufacturing, orders can be very large and sales cycles can take months, even years. The best sales reps act in a supporting role, providing timely information that helps their prospects and customers make informed decisions. To do that well, they need the latest product information and collateral and, most importantly, they need to know the value proposition and best fit for each of your products. Unfortunately, most channel reps would rather work on relationships, not upping their product knowledge on a regular basis.
The world of B2B selling has changed forever. Some of the more telling statistics include:
Channel partners may not be willing to invest in continuing education to bring their sales reps up to speed on modern selling techniques. Sales reps themselves may resist change because it requires a significant time investment and training on digital sales tools they may have never used before.
Resellers and distributors may not be willing to invest in the digital marketing platforms and content required to rank highly in search engines and offer needed online support for the buyer journey. Even if they are willing to build a robust online presence, your products may not be featured or even accurately represented.
The truth is, high value channel partner relationships are rarely easy to find and still harder to grow. Relationships that work are built on a solid foundation of trust and alignment of goals and processes. Start with understanding your own requirements for a good partner, then apply those standards in the vetting process. Some things to look for include:
If you want your channel partners to perform as well as Cisco's, some strategic thinking may be in order. Your best partners may well be your best chance to grow revenues and reach your goals, but they will need to be with you on that quest. The more you can do to help them with both sales and marketing, the faster they can increase revenues from selling your products. Your best partners will embrace your offer to help and participate themselves in getting the word out, improving sales performance and developing great client relationships. Your "other" partners? Well, maybe it's time to move on.