RELYING ON THE INDIRECT channel is an appropriate strategy for enhancing sales. However, many service providers unknowingly poison their own efforts by making decisions that are detrimental to sustainable programs.
Here are 10 common mistakes to avoid.
- Setting Unrealistic Time-to-Success Expectations. Executives who are next to channel management often are frustrated by a lack of initial revenue generation. It is not at all unusual for a new program to take a minimum of 18 months to reach a level of traction sufficient to sustain itself, so channel managers should be patient.
- Limiting Partner Recruitment. Successful programs constantly recruit new types of channel partners in order to sell new services or reach new verticals or market segments. This is especially important when selling new managed services, such as VoIP, hosted services, applications or network monitoring services. Traditional voice-oriented channel partners, including master agents, often cannot drive demand for such services in large part because the customers are looking to other types of partners for these capabilities.
- Recruiting Too Many Partners. Never measure a programs success by the number of partners signed into it. Productive partners are what matters most. Signing up every partner with a pulse creates cost and management burdens. Instead, channel managers should specify the partner profile, identify partners that match the profile and focus recruiting efforts accordingly.
- Delaying Investment in Proper Tools. In an attempt to control costs, many novice channel program executives make the mistake of not investing in technology portals or commissioning systems to support indirect partners. Channel partners require complete access to portals that facilitate presales activity and also give them direct access to carrier systems that enable them to submit orders; manage moves, adds and changes; enter trouble tickets; and monitor provisioning status. Investing in systems that enable partners to be self-sufficient results in a tighter relationship between the provider and its partners.
- Fueling Channel Conflict. In general, more carriers aim to minimize channel conflict and allow teaming between direct and indirect sales organizations. However, some programs maintain a first in gets the deal mentality even though the first to claim a deal may not be the best suited to manage the opportunity. In addition, excluding channel partners from segments such as enterprise or government accounts without establishing rules to enable teaming only minimizes the opportunities for the carrier to close sales.
- Applying Inconsistent Pricing Policies. Companies often create different pricing, promotions and support for products and services sold by its channels. Dont do this since partners will not appreciate losing a deal to another channel that competes against them unfairly.
- Requiring Exclusivity. Exclusivity is antithetical to a competitive market and such requirements force partners to create workarounds, costly subsidiaries or other ways of gaming the system. Carriers want to maximize distribution for their services, but exclusivity often does not equate to increased sales because it excludes opportunities for some partners to engage with the carrier and increases the likelihood that these opportunities will go to competitors.
- Communicating Ineffectively. Success with partners is often a factor of mindshare. In order to remain top of mind, channel managers need to communicate constantly through frequent e-mails, conference calls, Webinars and site visits.
- Overlooking Partner Enablement and Retention. Contract signing is not the basis of a provider-partner relationship; it simply marks the point when the hard work starts. Partners must be enabled to be successful through proper on-boarding and training. Then, they must be properly engaged to pursue sales opportunities by going along with them on sales calls, so the partner can see how to properly sell the providers value proposition. Finally, they must be retained through proper ongoing management, which includes proactive support, responsiveness and accountability, as well as accurate commission payments and competitive product and service offerings. Channel management needs to be an advocate for the partner with their internal organization.
- Operating in a Vacuum. Your partners are a great source of competitive information. Partner summits and advisory councils are excellent ways to get partner agreement on the direction of the program and how the company might better compete in the marketplace for partner and customer loyalty.
Michael Fair is co-founder of MarketRace, a consulting firm providing strategic sales channel advisory services, introductions to prospective channel partners, and delivery of channel programs in fulfillment of the new channel strategy.