Sales Organizations Must Tighten Ties With Channel Partners

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Sales organizations that maintain close relationships with their channel partners and help them succeed throughout sales cycles can expect an increase to their bottom lines, according to research from CSO Insights, a division of the Miller Heiman Group.

In its 2016 Channel Sales Optimization study, the firm found that companies that assist partners in generating new leads and coaching can expect to meet more than 90 percent of their channel revenue goals.

Jim Dickie, one of the authors of the report and a research fellow at CSO Insights, notes that the benefits are especially noticeable in the hi-tech, medical product, and manufacturing industries. “In the B2B world, it’s a way to increase your reach without increasing your cost,” Dickie says.

For instance, partners can be useful in an increasingly global economy, as they might cover geographies that are out of a company’s scope. Further, they might have vertical expertise that the core sales force lacks. Channel partners can also potentially add value through services and products that make for a stronger package deal than a company can offer on its own.

The revenue these channels can generate is not insignificant, either, with 27.8 percent of the firms surveyed stating that 75 percent of their revenue comes from channel partners.

But all that being said, “you’ve got to support the channel partners, because [they] are different from your salespeople,” Dickie points out. Salespeople require solid training, collateral, and technology to sell, but if they don’t get assistance, they’ll figure out how to sell regardless because they want to keep their jobs. “If you don’t give [channel partners] the training or the support they need, they’ll go sell something else that’s easier to sell.” They are a volunteer sales force, and sales leaders must remember that.

“The more you support the channels, the more they perform,” Dickie says. “So if you’re not getting the results you want, you’ve got to look in the mirror, because it’s probably something you’re not doing that’s keeping your channel partners from pushing your product into the marketplace.”

According to Dickie, companies should consider implementing training that goes beyond simply educating partners on their products and helps them understand how to sell them. They must first enforce and then reinforce the training, in the same way they would for members of their internal teams.

They should also use technology. An alarming fact is that 46.9 percent of companies said they did not have access to partner relationship management (PRM) technology. Furthermore, while 80 percent of those surveyed had CRM systems in place, only 25 percent installed PRM as part of their larger CRM technology stack. Such a system can allow firms to extend to their partners functionality in areas such as opportunity, forecast, content, and lead management and generation.

Fortunately, says Dickie, CRM vendors are addressing these gaps. “The Salesforces and the Microsofts of the world are realizing that there are a lot of these channel partners out there,” he says. Such vendors are starting to figure out how to ensure partners have access to licenses on the same platform, or how to integrate a company’s core systems with those of the partners. “I think both of those are big things that CRM vendors are addressing in a pretty vigorous way,” he says.

Vendors are also getting better at addressing the real nature of relationships between partners and core sales organizations and realizing that they must meet their needs for ease of use and restricted or protected settings. “Both parties want to share some information back and forth, but they clearly don’t want to share everything,” Dickie says. “Channel partners don’t want the vendors that they’re representing to see everything that’s in their pipeline, just the deals that are in the pipeline that relate to that partner.”

Conversely, companies that sell through channels realize that all channel partners are not created equal. Those that are actively selling and making a noticeable impact should be granted more services, support, and marketing dollars, but certain information should be hidden from everyone else.

And “it’s not a question of getting as many channel partners as we want, it’s a question of how do we get as many good channel partners as we can,” Dickie says. He notes that companies with partner networks already in place that are looking to assess which of their offsite sellers to support should start segmenting between those that are great and those that are just average. They should look not just at the dollar volume that the partner is generating, but also the costs associated. For instance, if a partner is taking up presale support time or processing orders incorrectly, necessitating follow-up services, these factors should be considered. 

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