Revenues are flat or falling? “Let’s sign up partners and distributors!” says the sales director.
In rough times like in new market penetration, distributors, value added resellers (VARs), partners, agents and channel partnerships are a normal sales director suggestion.
Unfortunately, too many B2B companies invest without preparation in the magical world of channels. They more or less consciously ignore that channels can make or break your sales revenue goals and overlook the work required to acquire quality partners versus a quantity of them.
Strong channels bring mindshare and sales. Weak ones will kill you.
Still, if well prepared and orchestrated, what we call in the marketing lingo “distribution” or indirect sales, brings high value and get your sales going.
Going direct or not?
If you can go direct, well don’t excuse yourself and go! But for many markets and types of products and service, going through channels is the only way. For many, it’s a strategic choice and for some, tactical. It’s a question of context and business objectives.
Depending on your situation, consider these in weighting your options.
A lot of end customers like to buy from resellers
Depending of your B2B industry, for end customers, or if you prefer, end-users, it’s convenient to buy from a source that offers:
- A one-stop shop to purchase a variety of products and services
- Tech support, especially for complicated stuff
- Logistics, read an easy way to order, get an invoice and delivery of merchandise
- An easy way of doing business (SMB versus Mr Big Corporate)
- Face-to-face contact
Faster time to market
Often, the benefit of resellers, partners, agents and so on is their reach in various market segments. Such client relationship will accelerate your sale.
But beware of over distribution. More distribution doesn’t always equal more revenue… Keep in mind that an external sales force require as much support and education than your own. You have limited resources and time. Don’t spread too much.
Customer relationship ownership is not yours
Choosing to go with a partner means that the client ownership is not yours. Partners will then have power over you. Partners are independent businesses with their own agendas. Act as a partner, bring value, provide support, share leads through a CRM system and communicate tightly. Remind them also than it’s a two way street.
Choose your partner wisely and don’t lose time
A real partner will put serious efforts in the relationship. You must too. The first 6 months are therefore critical to go from say 0% to 10% of your partner’s revenue. If it doesn’t work, make it work or get out of this relationship, fast!
Partnership means accountability
Bravo, you signed up new partners. Do you expect them to train themselves and create sales material for you? You look for a partner, right? Be one.
On the flip side, partnership means accountability. Do quarterly meetings with sales objectives and continuous investment to help you both grow.
Should you choose to go through indirect sales model, remember, it takes two to tango. A distribution partnership through channel partners, VARs, agents and so on holds to value, support, business objectives and communication. Just like a life partner, be very selective, clear and communicate, communicate and communicate.
If you look for a partner, start being one for them. Then see if it works. If it doesn’t, don’t stick around. Be quick. It’s strictly business.
Good luck with your distribution. Get in touch with me to discuss how we can help.