Channel SalesIncentivizing your channel partners the right way
Often companies have to rely on outside or indirect sales channels to reach certain customers more efficiently. Indirect channel sales can be attractive because it reduces fixed costs of sales including salaries and sales related overhead.
However, using indirect Channel Sales has drawbacks and challenges:
- The sales reps work for another company (Value Added Reseller (VAR) or distributor) and answer to managers within that company.
- The channel partner’s sale management has their own revenue numbers to meet. These drive sales priorities that may be different from yours. After all, you are competing with other manufacturers for the attention of that channel partner’s salesforce. Depending on what incentives you provide, you might get a lot of attention or little or none.
As many of our clients have informed us, getting and keeping the attention of a channel partner is neither easy nor cheap.
A typical incentive is to provide the channel partner with “marketing funds” to use as they see fit. How efficiently the channel partner uses this fund to generate sales is debatable. The channel partner typically throws that fund into their promotional campaigns to market to all of their customers promoting all of the products and services they sell.
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The Right Channel Incentive
An effective alternative is to provide the Lead Generation service directly to the channel partner as an incentive.
This approach has the added advantage that you know your funds are spent to generate leads specifically for your products and services. Not only does it produce leads for your products and services, but it also aligns your sales objectives with your channel partner’s. Providing high quality leads that close faster and at a higher rate enables your channel partner to meet their own sales objectives, while it moves more of your products and services.
Channel Sales reps will increasingly present your products and services first as they have better leads for them, following in their sales managers will also begin to allocate more resources to selling your products and services. In the end, the financial incentives of both your company and your channel partner are closely aligned.
While it is very difficult for a company to know what its channel partner did with the marketing funds it provided, it is relatively straightforward to measure the results of providing a Lead Generation service. As a customer, SOMAmetrics will provide you with detailed data and reports that clearly demonstrate how many leads were provided to your channel partner(s) and how many were accepted.
If the channel partner is willing to share pipeline information, you can even obtain true ROI measurements in terms of sales pipeline built or revenues produced directly from the Lead Generation Program.
How it Works
As indicated above, your company would assign an experienced SOMAmetrics Business Development Professional (BDR) to your channel partner’s sales representative. The pairing is typically one-to-one, enabling a full pipeline of leads for your products and services, thereby significantly motivating the channel sales rep to represent your company.
You have the ability to determine both the ratio per channel sales rep as well as the total number of SOMAmetrics BDR’s you wish to allocate to a given channel sales partner.
As SOMAmetrics employs only experienced inside sales and business development professionals, a minimal amount of product training is required to get started.
Two additional factors are the compelling messages that gets the BDR quick access to a decision maker and the qualifying criteria for determining if this lead is qualified or not. Both of these critical pieces of information should come from the channels sales partner for better alignment. It is highly recommended that the SOMAmetrics BDR have access to your channel sales partners sales representative as early and as often as possible to establish a strong relationship with a faster knowledge transfer.
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