The first time I saw a real mountain was during a summer vacation with my parents. We loaded up our Mercury Meteor and after endless hours of driving across the wasteland of Kansas, we final crossed the border into Colorado. A few hours later, we were rolling into Denver and the magnificent Flatiron range of the Rocky Mountains stretched out like a postcard across the entire horizon behind the city skyline.
The next day we were well beyond the front range, and real mountains were everywhere. I kept asking my dad to stop the car so I could just “run over to that mountain” and climb up to the top.
The mountains looked like they were that close. Climbing a mountain looked like it might take an hour or so. Surely you could just run across that meadow, climb up the hill and then head right on up to the top of the mountain.
It wasn’t until I actually did climb a mountain that I understood just how deceiving that magnificent view was. That meadow was actually about three miles wide. The “hill” on the other side was actually several hills, and crossing them would entail a full-day hike. Once you positioned yourself on the mountain proper, that easy route to the top disappeared about 100 yards up the trail, and a sign informed you that the summit was 15 miles up trail.
In many ways, managing multiple sales channels is like climbing that mountain—it looks easy until you really get into the process, and then the challenges and difficulties become all too apparent.
I don’t know how many times I’ve heard marketing folks declare during a midyear progress meeting that the sales numbers for that year can still be made, we just need to open up an indirect channel. If you currently manage a multi-channel operation, you know how naïve this statement sounds.
Like that seductive mountain standing in razor-sharp definition in the clear, clean air, the sales success view is distorted by deceptive simplicity. All of those little bumps and ditches you may see off in the distance are in reality boulders and canyons between you and success.
You Need Channel Sales Management
If you manage multiple sales channels as a way to boost revenue to your top line, or if you are trying to fix an under-performing sales channel, it might be tempting to just start pushing buttons and see what happens. But, managing multi-channels is a strategic process that requires a strategic-level outlook and plan.
Like the mountain mirage, managing multiple channels or fixing underperforming channels requires more effort, knowledge and expertise than might be readily apparent. Here’s what you need to do the job.
Effective channel management doesn’t just happen. There are specific elements that need to be present, and these need to be carefully considered, evaluated and re-evaluated over the lifetime of your channel management program. Keep these things in mind from the start, and your channel management program will be well served.
- Goals – Successful selling and deliberate goal-setting work together very well. Goals are needed for your overall program and individually for specific channels or verticals and product lines. Attainment of goals is important from the standpoint of having a milestone to define success with. You can’t claim success if you can’t establish a metric to tell you what success looks like.
- Policies – A large part of running a multi-channel organization involves handling conflict and friction. Consistently applied, published policies are essential to demonstrating the impartial nature of your operation. Things like commission splits, national account representation and other everyday sales matters must be decided prior to the fact, or someone will end up feeling abused.
- Products – Who sells what and to whom is important as well. Pay attention to what channels sell and don’t sell. This information will inform your decisions about future territory assignments. Match specific products and product groups to those partners that are best equipped to handle them and the markets to which they are aimed. New product rollouts and availability should be preceded by training, collateral distribution and sales support materials.
- Sales/Marketing Programs – Compensation plans, incentive plans, territory plans, market segmentation and special campaigns should be well understood and in place prior to starting any sales activity with a partner. These are the things that, when mishandled, will blow up a sales organization.
Effective Channel Management
Those are the basic elements of a channel management program. But what about making it effective? How do you move beyond the basics to establish an exemplary program? Matt Heinz, of Heinz Marketing, offers some suggestions on effective channel sales development that I feel are right on target.
First off, at the risk of being redundant, establish goals—clear, attainable and market-sensitive goals. Even if you are not requiring specific performance levels on a month-to-month basis, you will want to establish metrics for overall performance that can be used for future planning.
Gather the basic marketing data needed to understand the markets you are addressing. This would include market-sizing by vertical, geographical divisions and other segments that logically define your overall market. Look for specific annual revenue levels and establish a small, medium and large tier for your segments. In some cases, you will want to assign specific tiers to different resellers.
You’ve likely run a direct sales organization, so it should come as no surprise that the same performance metrics apply to each channel. You will want to track production of leads, both market- and sales-qualified leads, along with actually sales numbers and revenue production numbers from each channel. You should be able to draw comparisons between the various channels active in your group.
Like any other sales channel, your indirect channels will need the basic tools required to sell your product.
These include collateral, consistent supportive messaging, campaign materials and other resources. Demo facilities, white papers and other late cycle tools will be expected as well. These should be easy to find and equally accessible to all channels addressing a particular market. Don’t treat the indirect side of your business like a stepchild; give them the same tools as your direct channel.
Compensation is Always on the Mind of People Who Sell
Regardless of your confidentiality requirements, the field will talk and compare notes. Be consistent, fair and honest in all matters related to compensation plans.
Recruiting new partners to sell your products is a sales job in itself. It helps to understand what potential partners look for when it comes to taking on a new line or vendor.
Partners Like to be In On the Ground Floor
When it comes to new products, partners like to be in on the ground floor. Where does your company fall on the maturity curve? If you are past peak, you should be able to show your product in a light that makes it more attractive. Are your sales for that product building? Are you seeing activity in markets previously ignored?
Your new partners will want to be able to show your product to an audience that’s receptive and understanding of how the product will help them. If this is a stretch or if the case is difficult to prove or explain, you can’t expect your partners to spend much time on your solution. Provide clear examples of how the product will be of benefit to your new customers.
Of course, nobody works for free. Be sure your pricing is reasonable for the market and to show your partner how they can expect a specific margin for their efforts. Some products go to market with a completely artificial list price. Make sure you plan to either share that discount burden or offset it with a net price that takes the street price into account.
Addressing these three things openly and honestly will drive trust on the part of your entire sales organization and serve as a great foundation for your future success. Serve your direct and partner sales organization with passion, honesty and dedication, and they will reward you with loyalty and revenue.
Sales is a people-to-people business. Being direct or indirect should not remove the value of one-on-one contact and support.