It’s called Channel Management for a reason. Your job is to “manage”
Having been in and around indirect distribution sales for almost 40 years, the same themes keep coming up. I’ve worked with nearly 400 clients, and taught channel excellence to 60,000 students over the years. I taught them, but frankly, they taught me as well.
Through all of that, I have found that there are 7 simple rules that companies need to follow to succeed at indirect sales. Do these well, and you’ll be more successful than 90% of the companies out there.
- Rule #1 – Focus on High-Quality IP Transfer
The IP transfer starts with your onboarding program, sequenced out carefully over weeks or even months. IP for us is not just product information, but sales and operations training. It includes expectations – written policies and procedures, yes, but also all the unwritten expectations that every organization has.
In many ways, the IP transfer defines the relationship. This is really the first time your new partner will interact with you, and they will be comparing how you do this with how other suppliers interface with them. Done well, your partners stay top of mind and never “die on the job.”
- Rule #2 – Move the Cost of Business to the Channel
This sounds draconian, but it’s not. You do this by concentrating on operations efficiency during the onboarding process.
If you are recruiting properly you already know that today’s new breed of Distributors are increasingly aware of the need to manage and maintain their own business models, and prefer to have more control. While leads are always welcome, they want to influence and even drive demand creation so they can properly position their own unique value proposition.
Companies that do it this way spend a lot of time making sure this is done correctly. It sustains enthusiasm, and really changes the whole channel manager function from bird-dogging and hands on support throughout the partner’s sales cycle, to a focus on strategic sales support, communication, and training. This puts less time and stress on you, the supplier, and your cost of sales decreases because you’re no longer involved in every step of the sales cycle but remain available to support when supplier involvement will be most impactful.
- Rule #3 – The Business Plan is Not Optional
Enough said. Start simple, and build it as you grow and the relationship evolves.
Most companies with channels have some sort of business plan – the issue here making sure the plan focuses on influence and results. You can’t just shove a catalog at partners with sales targets – you’ll disappear!
Instead, you need to carefully define WHICH/WHO are the resources within the distributor that influence the results. If you have extremely large companies as your partners you will be more successful if you position the business plan at the regional or even local level. Contact me, I’ll show you how to do it.
- Rule #4 – You Have the Right to Expect the Partner Execute Performance Agreements (see rule #3)
Your channel partner has agreed to market your brand. By giving them access to your brand, the value of the partner’s business has increased.
But the partner must remember it’s not only about the rights to the brand, but the responsibilities that go with it. The business plan should include a number of specific and measurable marketing, investment, sales, and behavioral agreements that BOTH parties have agreed to. There are some samples on our website: www.globalocityservices.com
It’s absolutely critical to monitor the partner’s activities during the first 180 days. Stay close to them, and make it very clear you expect them to execute on all the specific activities you’ve agreed to. Activities that are clearly and specifically defined, and aren’t monitored with specific action plans signal that it’s all optional. And you’ll never stay top of mind once that attitude sets in.
- Rule #5 – Maintain Communication Transparency
This is the one that is most often violated. If you only have 4 or 5 distributors or partners, communication is not such a big problem. But if you have a substantial number, managing communications and staying top of mind is very challenging.
For example, if you have production or shipment delays, you need to be proactive in letting them know, keeping them regularly apprised of the situation. If you are discontinuing a product line, you need let them know well in advance.
Similarly (see Rule #4), missing business review or other agreed deadlines consistently sends a bad message.
- Rule #6 – Emphasize High Frequency Communications
Utilize multiple platforms. Today we’ve fallen into the email trap – so easy to just respond via email.
But emails that come only when targets are slipping, or that just urge more sales get repetitive and are tuned out. Instead, utilize multiple communication platforms and provide useful information from different sources. Plan out a thoughtful sequence of information. Communications should come from marketing, product R & D — this is a problem when distributors are siloed off into the channel management group.
Also beware, tho, that emails may come to the partner from different directions and are very confusing when they don’t seem to fit together. Changes in management result in changes in messaging and focus – your distributors can’t keep up! And you need to stress that everyone supporting the partners is a team, so that everyone is included when new policies are issued, or priorities changes.
- Rule #7 – Always Acknowledge Good Performance
Find ways, invent ways, to recognize positive achievements.
Even if your organization isn’t very good about recognizing performance, make it a point as channel manager to find ways to build your influence with your partners. There are lots of ways you can do this that don’t cost a lot.
Small things, like a simple thank you copied to senior management, recognition in the company newsletter or website, a certificate, a local newspaper ad, a thank you letter from senior management, or an award at a partner conference (even if it’s a new award never given before!), go a long way to helping you stay top of mind.
Could I think of more rules? Sure. But the truth is that if you follow these 7 and persist, your indirect sales channels will thrive.
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