• June 1, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

How to Trust and Have Funnel

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It's not easy being segmented. Avaya is an IP communications front-runner that found this out in 2004 when it launched eDemand, a new strategy to push more business to channel partners and reduce conflict with its own direct sales efforts. The sticking point--one common to segmented sales structures--was trust. "Avaya was having a difficult time collecting funnel information from partners," says Gregg Kalman, director of global channel strategies and operations. "They worried we'd use their own information to compete against them." Another issue was partners' lack of regard for leads received from Avaya. "When we gave client executives qualified leads, they would let them go stale or would give them based on personal relationships." With limited trust and no systematic means of enforcing it, the strategy was bogging down. The answer was channel management. "Two people inside Avaya were looking separately and in parallel for the solution," Kalman says. "I was looking for deal registration to help our partners go hunting. [A colleague] was trying to find a fair means of lead distribution with feedback. We both hit upon BlueRoads." "BlueRoads is all about closing the loop from campaign to cash," says Kathleen Hayes, vice president of marketing for the on-demand channel-management provider. "[Avaya was] looking at channel management from two viewpoints. They asked how we could proactively get individual sales reps to register leads and how to push leads to others. We helped them bridge the trust gap with privacy-protected deal registration." The secret to building trust in deal registration is to guarantee that the data shared will not be used against the sharer. BlueRoads acts as a trusted third party, delivering deal information only as needed by the user. The partner enters all the specifics of the lead, but Avaya can view only those fields that identify the lead, its characteristics, and value, until it is signed off on and agreed that the partner owns it. To sweeten the pot, the partner of record becomes eligible for discounts and rebates. "The system made partners comfortable that we would play by our own rules of engagement," Kalman says. Lead distribution, which both Kalman and Hayes agree is "almost the opposite" of deal registration, requires a different approach. BlueRoads fosters competition for leads by letting interested sellers pull the ones they want based on their ability to pursue them, removing them from circulation. But if the lead isn't acted on within a short time (five days or so) it is returned to the pool. This prevents cherry picking and ensures that every lead gets the attention it deserves. One of BlueRoads' advantages is its speed of deployment, and that speed is evident in the benefits Avaya reaped. BlueRoads deployed to Avaya and its partners using a staggered release, starting with lead distribution in June 2005. The entire process took six weeks, and within 30 days Avaya was seeing ROI. A partner closed the first lead using the new system--a win--in just 14 days. By 20 days after the rollout, the channel sales pipeline had increased 650 percent. At the one-month mark, Avaya had already surpassed its 12-month pipeline goal by 275 percent, due to an 842 percent increase in user adoption by partners. Kalman is thrilled with the improved performance. "Open sharing of information is a result of trust that allows us to build a healthy joint approach to the market. Because BlueRoads is viewed as a trusted third party, partners were willing to register hundreds of opportunities in the eDemand program." The Payoff By getting its internal salespeople and channel partners onto BlueRoads, Avaya:
  • increased its channel sales pipeline 650 percent in 20 days;
  • exceeded the year's pipeline goals by 275 percent in 30 days;
  • improved partner adoption of the eDemand program by 842 percent;
  • can register and track thousands of leads; and
  • strengthened partnerships through mutual trust.
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