Most companies, depending on the nature of the business, rely on channel partners, dealers, and distributors to serve as a bridge between the respective company and its valuable consumers. It is crucial to improve channel partner engagement to increase channel sales. The truth of the hour is, it is an era of globalization and the link between channel partners, and companies are becoming increasingly important considering the opportunities it brings to companies in terms of opening multiple doors and allowing it to grow heights that would otherwise be quite a task for companies to achieve with its existing operational force. Additionally, a good channel partner, with the expertise they walk in, exposes the companies to realize how much optimization they can introduce to the current way of operations.
We can, therefore, assert that channel partners and distributors or dealers play a very crucial and vital role as advocates of a company and are significant contributors to growth. Phillip L. Peck, director of sales for EagleBurgmann, US validates this with his quote,
"Distribution is the single most viable alternative to complement and supplement a direct sales organization."
This should make it very clear that irrespective of how efficient a company is, it is practically impossible to be self-sufficient and a strong channel partner association is the most viable solution to make up for it.
Having established this, it is rather a disheartening fact to state that the relationship between most companies and channel partners is still very transactional and more like that of a client and a service provider.
Look at it this way, all employees of a company contribute towards the growth and channel partners also contribute towards the growth of the company. When this is the case, isn’t it only fair to treat them as an integral part of the business and not just merely as a service provider?
If you agree with our proposition, then this article has in its ways to improve your relationship with your channel partners and the benefits of doing the same. Read on, pick out inputs you feel are viable, and implement to see for yourself the difference in the impact your channel partners bring to the organization.
The right way of working with your channel partners to build a stable relationship and the impact it will have on the results they deliver.
Once you’ve partnered with a channel partner, the best way to go forward is to onboard your channel partner just like how you onboard an employee into your organization. Once you onboard them, make room for comfort to set in and keep them motivated to deliver the best results.
Here’s in detail everything you need to do when you decide to partner with a channel partner to build a strong and healthy relationship -
It is essential for them to understand your organization and what it stands for, the values, ethical practices, and more because you’re getting them to represent your company in front of potential clients and you do not want to dilute your brand positioning. Taking efforts to do so will ensure your brand identity is in alignment and held high as opposed to making mere functional pitches.
This communication helps to align them with your business goals clearly and objectively. They also get a chance to understand how much you are relying on them with their contribution. Most importantly, communicating future plans and the scope of your partnership with the channel partner to accomplish it is going to plant in the minds of your channel partners the trust that there is potential for the association to be a long-term association and thus gives them an extra push to put in their best efforts.
Sure, they come in with the expertise to sell and the network, but their efforts will lead to fruition only when they deliver the best pitch in terms of the functional benefits your product or service has for the potential buyer.
So, instead of just handing off responsibility to your channel partners, take them through your product or service thoroughly and get them to believe what a value-addition it can be to your consumers. Do not let them build their pitch based on the little knowledge they have of your product or service because you know your product or service best and they do not have to reinvent the wheel to figure out selling points. Training them on this, not only saves them time but ensures higher conversion rates.
Be clear of what your expectations are from your channel partners and put that in writing. Point to note, being clear does not mean being unrealistic. Work out the math if you’re very sure about how much business a channel partner can bring in or just do it on a trial and error basis to find out how much they can deliver and then introduce targets to motivate them further in terms of performance.
Being realistic of the targets you set for them and also putting in the efforts to back your numbers with some rationale is going to make them believe the target is achievable and believing, as we all know is the first step to achieving something. Another sure proven way to push them towards achieving your desired targets is to reward them for it. The world is a fan of incentives, so spend a little time to identify tangible or intangible rewards and announce the same to keep them on their toes to reach the targets you set. So, four things here, find a rationale, set targets, and communicate the targets with the rationale, recognize and reward them on achieving targets.
Your channel partners, dealers, or distributors have to be comfortable to walk up to you and communicate anything they wish to with regards to your business. This, unfortunately, is easier to put on paper than done considering the client and service provider hierarchy that dominates the relationship. You need to know that you need them, just as much as they need you and if your attitude is moving on to another channel partner, then let me remind you, you’re going to be on a constant run.
Every channel partner will want to have a say, they are human beings after all, and you need to establish a pathway to ease any sort of communication to build a stronger relationship. When you do this, you’re not only making them more comfortable to discuss the rights and wrongs openly but also increases the possibilities of having great ideas bounced off. Having an open and conversational relationship is like giving them the power of voice and in exchange for additional support and goodwill to grow your business.
No curve is always exponential. There are going to be ups and downs and the business your channel partners are going to bring is is also going to have its own ups and downs. The first reaction to this situation after a few months of downfall is to fire for no reason or explanation. The only reason given to the channel partners, it’s not working out, but ever care to understand what went wrong? Well, maybe you should figure out the root cause of declining business.
Buy them for their word and if it is because of a variable outside their control, understand. Fix things from the business end and let there be scope for errors. Nothing can bring you more loyalty than empathizing with your channel partners during a downfall. Not saying ignore the downfall but examine, understand, listen, and think of bouncing back instead of just blaming your channel partner for it.
After all, that this article has had to say if your employees need motivation, then don’t you think your channel partners need them too? Just like an employee, a motivated channel partner has far many more reasons to give a higher turnover than a non-motivated channel partner.
And so far, we’ve only spoken about your firing them out of business, but what about a channel partner denying to do business with you. That would be sad, wouldn’t it? Repeating, you need to treat your channel partners like your employees, and all conditions apply here as well. By motivating your channel partners, their loyalty increases, their urge to perform better increases, and under such circumstances, there is a better chance of growth for your business.
However, do not mistake motivation for rewards and recognition. While incentives might be a part of the motivation, that’s not all. Motivation could be simply placing trust in them and giving them the freedom to make individual decisions, making them the boss of their territories, etc. You can motivate them by being available to provide the support they might need. Motivation can be in the form of empathy and example set by your company breaking the barriers and conversing like equals.
It can be something as simple as quick responses to queries and quick fixes. It can come from the interest you take in your channel partners and how much you invest in them. Not merely in terms of money, but also how much you invest in the relationship.
Lastly, motivation can be a result of the incentives you layout for them, which can be the bonus you pay them, the gifts you send out to them on special occasions, or the incentives you give them on achieving their targets. The latest trend here is gifting people’s experiences instead of tangible and perishable gifts. The best part is there is no need for you to break your head too much about providing motivation which involves monetary incentives. Some companies automate the entire experience. XOXOday is one such company. All you need to worry about is the behavioral motivation and set in place a system to facilitate rewards and, and you’re good to go.
Now that we know how to build strong channel partner relations, let’s learn 5 ideas to increase channel sales.
Working in channel sales has been akin to herding cats. B2B sales are difficult enough as is, yet when navigating through indirect sales channels, there are many moving parts. In essence, you’re relying on another person, team, or company to sell your product or service. Surinder Brar is a channel expert who created a worldwide channel sales program and managed partner strategy for Cisco. He explains; “vendors often think of channels as merely an extension of their sales force and expect them to behave accordingly — this is fundamentally wrong. The channel isn’t part of your own organization, and you can’t expect the same behavior or performance.”
So how can you create a cohesive ecosystem with your channel sales partners? Let’s tackle 5 strategies to bolster your channel sales performance and ultimately, increase your channel sales.
When working with channel sales you need to ensure your partners have the proper tools they need to be most effective. Whether that collateral is sales kits for resellers/distributors or marketing material geared towards the end-user, collateral needs to be available and disseminated throughout channel sales partners.
Marketing Collateral- Marketing teams bring in the leads for channel sales. For manufacturers and vendors, marketing collateral not only builds awareness for their product/service but also allows them to control the message of their brand.
Sales Collateral- Sales training tools can accelerate growth, as well as ensure your partners in channel sales can accurately communicate the value proposition of a product/service. These types of collateral can include; competitive datasheets, interactive webinars, sales scripts, customer testimonials, spec sheets, or case studies.
The proper marketing and sales collateral will significantly aid in building your channel sales partnership.
With channel sales, incentive programs are common ground. Obviously, your partners will optimize their performance when incentivized with high-value rewards. While most channel sales partners have rewards and incentive programs already in place, it is surprising how often they can be unstructured and therefore ineffective. Incentive programs for channel sales need to have clearly outlined metrics. This means an explicit expectation of sales and revenue yield for each channel, which should be backed up by proper research. There needs to be an accurate evaluation of the potential for each sales channel; IE- number of prospective customers, size of customers, revenue potential, etc, in order to establish incentive programs. Furthermore, how will your rewards system fit in with month-to-month or quarterly activity for channel sales partners? It is paramount to the success of a rewards program to ensure logistics, reporting, and analytics, are not only set up properly but also understood by all partners in channel sales. It can be very helpful to turn to a third-party company to administer and manage your channel sales performance services. Xoxoday offers a channel performance program that will oversee every step of the process, with proven results.
Have you heard of the issue of too many cooks in the kitchen? That is a common problem when it comes to channel sales. The root of that issue can be combated with proper communication. Cross-channel communication can be difficult, there are many factors at play; consistency, availability, frequency, or even confusion on point of contact. There are multiple stakeholders in channel sales, and while they all generally want the same thing, different organizations represent different perspectives. Therefore the messaging isn’t consistent at each stage of the channel. Just like rewards/incentive programs, communication breakdown should be crystal clear within your channels. Partners should know who they can contact for specific issues. Beyond that, those contracts should be available for all communication.
To take it one step further encourage cross-channel communication. If you’re a manufacturer or vendor, why not offer to call your distributor's prospects? it is important to outline this is just a means of help, not a way to take away business. Helping your channel sales partners close deals and answer client questions can go a long way. Communication also includes technical support for products and services. If you want your channel sales partnerships to be successful, the lines of communication need to be open and consistent.
Cross-promotion and networking with channel sales partners are an integral part of the process. Channel sales are a collaborative effort, a rising tide lifts all boats, therefore a partner’s success equates to your success. This can include cross-promotion of your partner’s marketing and campaigns via social media, as well as connecting on LinkedIn. Networking is an inevitable aspect of channel sales, if you’re connected on social media and lay the groundwork for an authentic relationship, partnerships will strengthen. Interconnected channel sales strategies will provide a solid foundation for your working relationship.
When organizations want to increase their channel sales they often look to increase their partners, however, it’s important to remember quality over quantity. Focus on bolstering the relationships you already have, before going out to attract new ones. How can you make current partners more effective at selling the product? Enterprise sales channels can learn from McDonald’s model. When a McDonald’s employee has a captive customer in front of them, they ask; “Would you like fries with that?” or “Would you like to supersize?” Those incremental sales equate to huge year-end profits. Apply the McDonalds method to your current channel partners. Ask yourself; how can you build a stronger partnership? What can you upsell?
Channel sales relationships are strategic investments that require time and effort, and captive audiences are much easier to sell to than cold leads.
Increasing sales with indirect channel sales partners is not an easy task, however with the proper time and attention, and solid groundwork- it can happen. To recap our 5 strategies… Provide all stakeholders with the appropriate collateral, whether it be sales or marketing. Make sure your rewards system is clearly laid out and consider utilizing a third party company to establish and manage your channel sales incentive program. Ensure that you have an easy-to-understand chain of command, and lines of communication are always open. Remember that cross-promotion of channel partners equates to everyone’s success. Focus on cultivating the relationships you have with your current partners, before tackling new channels. If you follow these steps you will drive more channel sales in no time!