The extended sales enterprise: channeling better results

For organizations that rely primarily or entirely on an indirect sales force via the channel, resellers, distributors, alliances or partners, the de-centralized nature of sales management presents increased challenges in overall productivity.

These obstacles represent both internal visibility into and control over channel performance, as well as external-facing support and enablement for both indirect selling partners and the end customers themselves.

There is a question of whether solutions and approaches are robust enough to maximize revenue within a larger, dispersed selling ecosystem. Instead, there may be additional ways in which the channel can be empowered by the original vendor, OEM or producer to deliver substantial, accurately forecasted sales results.

Why use a channel? The simplest answer to this question is: it’s all about money, and Figure 1 below ratifies the rationales reported by survey respondents regarding their channel deployment goals.

In the pursuit of ever more top-line sales and bottom-line profits, producers are reaching out to prospective and current customers through the indirect sales processes they hope will grow their business as effectively as possible.

The most popular partner-centric goals in Figure 1 can be easily linked to frequently deployed elements of indirect sales models:

– Growing revenue more rapidly through marketing and sales lead management practices that distribute potential buyers to partners who are paid only when that revenue is recognized – Gaining market share against competitors by swaying channel sellers to more frequently represent the solution, through an attractive and efficient partner portal – Improve the sales margin and up-sell potential of customers by enabling channel partners to manage renewals and product registrations

Channel barriers In the pursuit of these goals, however, stand a series of challenges that OEMs or producers face in running a streamlined indirect selling model; if sitting back and letting my partners do all the work was an easy formula to pursue successfully, none of us would ever purchase consumer goods or business solutions directly from the actual provider.

These barriers are summarized in Figure 2, in which the two predominant issues limiting channel sales success, as reported by companies that deploy indirect sellers, are intricately intertwined.

More than four in 10 of these companies tell us that they haven’t earned enough mindshare among their partner network, and that the key abilities within their channel to adequately market and sell their solution are insufficient.

If it possible to mitigate the negative impact of both challenges with a single strategy, then perhaps we will find that gaining mind share and partner support can be earned by producers who empower those same sellers withbetter tools, content, training and overall infrastructure to more efficiently sell for both parties involved.

The additional challenges showcased in Figure 2 may also be more easily overcome within a more substantial partner relationship, in which more aggressively supported indirect sellers add more producer revenue, and do so within a model allowing better visibility up and down the hierarchy.

Peter Ostrow is research director, sales effectiveness at Aberdeen Group