The Shortcut to Channel Sales

Quick way to channel sales (hint: there isn’t one)

Startups often turn to a channel sales strategy either as a standalone sales approach, or as part of a multichannel effort to complement the direct sales channel. Those who take the “boots on the ground” approach advocated in a previous blog (link) will take steps to ensure that their channel partners are the best and the brightest, well-trained and ready for the mission. Now that the effort has been expended, expectations are high. Perhaps too high! Where’s the revenue? Why are we not seeing results?

Immediate sales results, even from the best-prepared channel, are the exception rather than the norm. The reality is that reaping the rewards of the channel is a long-term proposition. It’s best to set expectations with senior management early on, so that there are no surprises. In order to explain this, consider breaking the expectations into phases, and giving management an idea of how long each phase might take.

Phase I –Channel Strategy

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This is the phase in which you determine what markets you are going after, and what types of partners you will need - in terms of expertise, coverage, and alignment of the partners’ marketing and go-to-market strategies with your goals. During Phase I will you determine how much, when and how to invest in the channel, through a combination of training, marketing support, technical support, channel management, and the like. In Phase I you will develop a full profile of the ideal channel partners. This is the most appropriate time to set expectations about when those investments will begin to bear fruit.

Phase II – Channel Infrastructure

During this phase, you will build the infrastructure for channel build-out. Here you hire the channel managers, develop the channel compensation plans and objectives, put in place the training programs and information assets that will address both sales and technical aspects, define and institute marketing programs that are geared specifically toward the channel, define the processes to support the channel, and ensure a full set of channel-ready tools. While not everything needs to be in place, everything should have been thought through carefully. Clearly, in Phase II you cannot expect to derive channel revenue.

Phase III – Recruitment

This phase involves recruiting the right partners, and the right number of partners.  Using the profile developed in Phase I, you will develop a target list that matches the profile in terms of the type of products and solutions they offer, their expertise and technical ability to sell and support your product. By this time, most if not all of the assets defined in Phase II should be in place, since the infrastructure is a key recruiting requirement. Some companies try to short-circuit this phase, by deciding to just go after all the partners of a major vendor, such as Cisco. This is a bad idea – not all partners are created equal. Some just happen to carry that vendor’s products, but they are not the partner’s key practice.

Phase IV – Channel Enablement

This phase involves working with the channel partners to make sure they are trained and fully understand the value proposition. Technical training of the pre-sales and support teams takes place during this phase as well. The channel partners are provided with sales materials and are theoretically ready to hit the ground running. So are revenues just around the corner?

Phase V – Channel Business Planning

Not so fast – first the channel manager must work with the partner to develop a joint business plan. This will include a go-to-market strategy with clearly identified target accounts, the programs needed by their sales team to go after those accounts, measurable goals for the first year, required resources and investments, and expected milestones. The first three months of the plan need to be spelled out in great detail, in order to facilitate the activities in Phase VI.

Phase VI – Channel Sales Assistance

This is where the hard work really begins. During Phase VI, the channel manager will work with the channel partner to begin prospecting based on the go-to-market plan. Here the channel sales manager plays a hands-on role with the channel sales team, helping them prospect, cold call, doing joint sales calls, coaching, mentoring etc. The channel sales manager will be a constant presence with the channel team during the first three months – it’s not unusual to have their own office at the partner site. Most successful companies require hand-holding the partner sales team for six months.

So in reality it can be a six to twelve month proposition before the startups sees its first dollar from a channel partner. It’s important to set the expectations properly, educate management as to what happens in each phase of channel development, and smooth the way to a steady, predictable revenue stream.