As your daily work duties become so enveloped by channel management, it’s difficult to take a step back and really analyze whether or not your business is doing everything as efficiently as possible. By looking to other companies and seeing how they’re handling the same situations, you’re able to gain valuable insight that helps alleviate some of the strain of your own trials and errors.
Software and technology companies are some of the most successful entities of our time. Even if you’re operating in a completely different industry, channel managers are able to learn a lot from the way these organizations handle their business, especially channel sales.
Use the following tips to help optimize your own company’s sales channel:
Think like the top salesperson
Many leading tech companies are realizing that the salespeople pulling new partners into the channel are actually generating much more revenue than the direct salespeople. Some are even reporting that up to 80% of their revenue is coming from partners, while as little as 20% is from the direct sources.
As a Channel Chief, you are likely the top salesperson – so you need to start thinking like one. This means you have to be considering all the fundamentals of selling with regard to channel optimization:
Whom am I picking as my partners to represent me as my salesforce?
Do I have enough partners to meet business objectives?
Are my partner account managers doing an effective job of building out practice areas that align with strategic interests with our partners?
Are channel incentives driving partner behavior or reflecting partner behavior?
Adopt this mentality to ensure that your programs are enabling you to operate with efficiency and scale so that you can attract, retain, and keep your best partners.
Identify and resolve channel conflict
Recently, a large software firm was looking to resolve channel conflict. The team noticed that their direct sales reps were getting involved in partner-led sales activities without the partners’ permission, thereby generating bad will with the partners. The end solution was to ensure a very clear set of rules of engagement that clearly mapped out when the company would take leadership on an account and when a partner should have that leadership.
Having this clear set of rules for channel managers, those working within the channels and direct sales reps help to improve channel optimization. Bottom line: Partner satisfaction and account revenue both increased for the software firm as the rules of engagement were adopted – and the same could happen for your company, too.
Define and segment partners
Revisiting your partners and analyzing their effectiveness for your company should be a top priority in channel optimization, a fact that one large, cloud-based storage company learned not long ago.
The company initially believed it was managing about 10,000 partners and trying to support them all. After some more careful, detailed analysis using the PERC scoring method, the company realized that it only had about 3,000 partners who really mattered. When this organization did another level of drill-down within those 3,000 partners, it was determined that there were really only 142 partners who were likely to generate their needed growth.
By reallocating their account management resources to concentrate on those 142, the company not only saw a better ROI on their partner account manager resources, but also realized an improved ability to hit their corporate revenue objectives.
Making sure you that have the right mix of partners and that they’re being managed effectively is an effort worth investing your time in. Learn the lessons from these successful technology companies and put the tips into practice within your own channel.
Effective channel management doesn’t just improve your standing with partners; it delivers the business results you need to outperform the competition.