Many sales organizations today are combining a direct sales force with an indirect channel partner, an outside person or organization who sells products and/or services on your company’s behalf. If you’re considering working with a channel partner, or if you already are, this blog series will explain how to effectively equip your channel partner managers and train your channel partner sales force.
Let’s start with some universal truths about channel partnering. While indirect selling can be cheaper and more effective than a direct sales model, there are less-obvious challenges in using this approach. Here are a few:
- Channel partners never create demand for the manufacturers’ products and services; that is the responsibility of the manufacturer. The only exception is an original equipment manufacturer partner, who behaves more like an end user than an indirect reselling partner.
- Channel partners are in business for themselves, promoting their own offerings, services and value.
- An indirect channel model is not necessarily cheaper than a direct sales model if discount points, lead generation programs, special promotions, training and other incentives are factored into the cost.
- Channel partners will compete with your direct sales force for large accounts if their domains of activity are not properly framed and focused by market, geography, industry or specialty.
A critical element in helping mitigate headaches caused by factors like the ones listed above is to use an effective coverage model. A good model will ensure that your company has streamlined the matching of its transaction size with the size of the entity you want to see covered by channel partners versus your direct sales force.
Here is an example of a simple coverage model.
Using this model, your organization should also consider addressing the following matters:
- Mapping geography coverage
- Industry or segment-specific coverage
- Specialty skills or offering coverage
We won’t address all of these points in this series, but suffice it to say that these are paramount to any healthy channel-mapping model.
After reading this post, has your perception of channel partnering changed? If you have or are currently working with an indirect channel partner, what has your experience been? Next week we will dissect the common challenges that affect all sales teams, whether direct or indirect. Stay tuned!