In my last post, I explored the causes of “channel laziness,” a common side effect of high-tech manufacturers’ efforts to create indirect sales channels to reach small- or mid-market businesses. Unfortunately, some manufacturers that leverage partners to reach customers who are difficult to cover through direct channels struggle to achieve desired channel productivity levels due to partner over-reliance on the support provided to them. In effect, partners become lazy, unwilling to invest in the resources and competencies that are required to play their intended role in manufacturers’ go-to-market strategies.
Here’s how tech vendors can break out of the channel laziness cycle:
- Make sure you have the right partners. Objectively assess whether your channel partners are investing in the right sales, marketing and technical capabilities to grow their business. Channel partners who invest to develop industry and solution expertise and digital marketing capabilities are better positioned to acquire new customer relationships. Monitor partners’ digital marketing activities, such as changes to their website or social media marketing to see which partners are developing thought leadership and executing effective marketing strategies. Similarly, partners who are investing in sales and technical talent management stand a better chance of winning over new buyers inside and outside customer IT organizations. Evaluate the profile of partners’ new hires. Are they building the skills that customers value?
- Improve the visibility of your partner’s role in the sales process. Unfortunately, most vendors' CRM systems don’t provide sufficient clarity about the roles that sales reps and partners play in the sales process. Consequently, efforts to determine the value that partners provide often turn into "he said, she said" debates. Tracking rep and partner activity at each point in the sales process is a best practice, but upgrading CRM systems and driving compliance with reporting processes often are easier said than done.
One simple way to break through the noise and better understand the value that partners are providing is to capture the voice of the end customer. Conduct a brief survey after each sale to determine the sources of information that buyers considered at each stage in their journey and the factors that most influenced their decisions. While this approach may not yield perfect visibility into rep and partner roles, it will certainly provide valuable insights regarding customer needs and preferences.
- Clarify expectations for the role that partners will play, and reward the right behaviors. Make it clear to partners that their role is to be demand creators as well as demand capturers. The days of the passive order taker who can justify his existence by being a gatekeeper to entrenched customer relationships are gone. Channel partners aren't there to just close sales when provided warm leads; manufacturers that seek accelerated growth should expect more. Implement an incentive structure that compensates partners differently based on the value that they provide before and after sales. For example, partners who generate their own leads and take the time to register opportunities in a deal registration system should be rewarded with additional margin.
Restructure partner programs to provide partners with options given their business model or strategy. Some partners always will be “farmers,” nurturing their relationships with existing clients, which can play a valuable role. Meanwhile, some partners are “hunters,” hunting to grow market share and cross-selling to expand their customer relationships, and they also should be rewarded. Hunters should be provided incentives that are valued given their growth strategy. For example, hunters will value co-op and market development funds that can offset their demand generation costs. Farmers who aren't investing in marketing will not take advantage of this benefit.
Breaking the channel laziness cycle means taking a fresh look at your channel and assessing whether your channel partners are in good shape and will be able to run the marathon that you plan to run over the next few years. Just like exercise, overcoming laziness requires that you take the first step and develop the right habits.
BLOG POST: Three Common Causes of Channel Laziness