Stay in Tune with Your Channels

By Walter Rogers

In recent years, as economic instability lengthened sales cycles and depressed markets, companies have increasingly relied on channel partners to help grow business and drive revenue. Today, many companies are relying heavily on the channel to represent their interests, not only in the US but around the world.

However, even though channel sales have now become critical for driving the overall growth and success of many companies, some of them continue to experience disappointment and frustration with their channel partner relationships. Selling through a sales team that is not directly under your control presents significant challenges. Managing these relationships remotely – often across the ocean and cross-culturally as well – only further complicates the process.

If selling through the channel is a critical part of your business strategy, remember these important tips to help manage the relationship in a way that will benefit both parties.

1. Start by choosing the right partners – Maybe this should be obvious, but it is often overlooked. There may be many people out there who would like to do business with you, but they are not all equal. Choose partners who already have well-established customer bases and great relationships with those customers. Channel partners must be financially sound; if they aren‘t, you could have big problems later. Look for a professional and tenured management team. Most of all, look for people who will work to help you be successful instead of only caring about achieving success for themselves. Above all, you want to avoid partnering with people who will end up competing against you at the same time they are supposed to be working with you.
    
2. Develop and deploy an effective training plan – Even though you might choose a partner because they have already demonstrated the ability to sell effectively, that doesn‘t mean they can sell your products effectively. At the very least, you must invest some time and energy into product orientation, product messaging, how to run demos, etc. But it should go beyond that; you and the partner should agree on how the products will be sold, including the strategy around the sales approach you believe will be most effective. For instance, many technology companies have been working through channel partners for years, and for most of that time the focus was on selling "boxes" of technology. These sales were transactional in nature and driven by price. However, recently, most technology companies are moving towards selling services around their technology, and this type of selling requires a more consultative approach. In many cases, channel partners are unfamiliar with consultative selling and either ignore or resist requests to change their sales approach. For this reason, companies would be wise to invest in training programs and tools that make it quick and easy for their channel partners to acquire the right selling skills to get the job done.
    
3. Clearly define and agree on the objectives that underlie the relationship – To a certain extent, in a channel partner relationship you become the "sales manager" and the channel partner becomes the "sales rep." From that perspective, it is your job to define the goals and objectives that will be used to measure success. Certainly, the partner will have input into this process, and the partner will rightfully have expectations of you, too. However, every aspect of the process from performance to reimbursement to processing returns to marketing responsibilities must all be clearly defined. It is vital that both sides understand clearly what is expected of the other, and how success will be measured. One thing that should not be overlooked here is making sure that the partner has a well-defined business case and the strategy and resources to deliver on it.
    
4. Monitor and measure performance – "Out of sight, out of mind" is the biggest obstacle to the success of channel relationships. Whether the partner is in the next state or across the ocean, the fact that they are operating independently creates countless opportunities for confusion and disappointment. The only protection against this is to create a specific set of KPIs built against a defined delivery and performance schedule, and rigorously track them. Continually communicate expectations and follow up with all necessary tools and support to produce success. However, it is urgent that you note even the slightest deviation from the agreed upon KPIs, and engage the partner immediately to identify areas for coaching and input that will help things stay on track. A small problem today will escalate into a giant problem tomorrow, if you don‘t monitor, measure, and follow up. Getting your channel partner established on the CRM you are using can make this process much easier.
    
5. Know when to walk away – As in any relationship between a sales manager and a sales rep, there may come a time when it becomes clear that the sales rep is just not going to be able to meet the requirements of the job. The rep may be a great person, but for whatever reason they are not able to deliver the results you need, even after good training and repeated coaching. At that point, it is in everyone‘s best interest to terminate the relationship. The same can be said of relationships with channel partners. The relationship takes some time to build, and even more time to evaluate and try to develop the potential everyone hoped to achieve. However, if it becomes clear that the ROI is just not there, don‘t hesitate to walk away. There are other potential partners out there who can help you achieve your goals, and you need to find them and start developing them as soon as you can.

Action Items:

•  Have you and your channel partner agreed on a clear set of KPIs?
   
• Do you have a strategy for training channel partners to sell your products effectively?
   
• Describe the process you use to monitor and measure channel performance.
   
• Explain the criteria you use to help you identify the optimal channel partner candidate.

Walter Rogers is the President and CEO of Baker Communications. Baker Communications is a sales training and development company specializing in helping client companies increase their sales and management effectiveness. He can be reached at 713-627-7700.

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