How Do I Build an Indirect Channel Program? A New Whitepaper
How Do I Build an Indirect Channel Program? A New Whitepaper:from Sales Force Effectiveness Blog
It’s a question every Chief Sales Officer or VP of Sales has asked themselves.
Indirect Sales Channels offer a compelling opportunity for any company. Young companies love using channel partners to gain fast access to markets without tying up capital, their most precious resource. Large companies looking to control costs use channel partners for their maturing products. Look no further than Michael Dell as an example--realizing that the home computing market had shifted from direct sales (Dell’s previous forte) to retail shops, he quickly signed on channel partners including Wal-Mart.
However, in order to establish an effective Channel Management program, we advocate a rigorous approach. Far too many companies conduct Channel Management as an Ad-Hoc program, where Channel Partners are recruited, contracts are individually negotiated, and partners are judged solely on revenue. This is an inefficient and unscalable practice. Costs associated with these “Chaos” programs are up to 61% higher than their top tier competitors, who have taken the time to establish formal criteria and programs to enable their Channel Partner’s success.
Maybe as a manager you’re thinking, “We already have a solid channel management program”. If you’re nodding your head, ask yourself these questions:
Within the last 2 years have you:
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Conducted a thorough review of how the end user purchases your product?
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Reviewed the structure and benefits of your Channel Partner program?
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Changed your structured tier levels and requirements for Channel Partners?
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Updated your product, technical, and sales training resources for Channel Partners?
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Terminated unprofitable Channel partner relationships?
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Conducted a study to determine your most profitable partner relationships?
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Determined how what share of revenue the top 20% of your channel partners produce?
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Analyzed your Channel Partner turnover and reasoning behind departure?
The Five Components are:
- Sales Strategy: Alignment to the Customer
- A Defined Partner Selection Process
- A Partner Focused Recruitment Package
- Adherence to a Channel Governance Process
- Comprehensive Channel Enablement Content
Channel Managers, what is the #1 piece of advice you would give to anyone starting from scratch on a channel management program? I'd be interested to hear your comments below.
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