Fifty-six percent of organizations depend on distributors, resellers, referral partners or other indirect sales companies to expand their market reach.
The research is pretty clear: while there are challenges to closer collaboration, the benefits that can be achieved by partnering with your suppliers — and suppliers with their customers — are enormous. Closer collaboration and communication improves efficiency. Partnerships not only spur innovation, but make it happen faster. Other benefits include faster time to market, improved quality, reduced risk, and enhanced employee satisfaction.
How do you achieve those benefits?
Step #1: Ensure Internal Support is Aligned.
To get more sales from their distributors, most companies think they just need to find better partners. The reality?Truly growing distributor/indirect sales requires most companies to re-look at their internal relationships and processes.
To support distributors effectively, companies need help from many internal team members. Your channel manager can find the perfect partner, but all of that work will be minimized if shipping and logistics consistently late or short-ships products, if customer service is rude or unresponsive, or if marketing fails to provide timely or useful collateral.
In addition, distributors — like all external partners — are very smart. If a company’s internal team isn’t aligned, partners are quick to find the chinks and play departments and individuals off against each other.
Step #2: Find the Right Partners.
Make sure you partner with the right distributors, and that both you and they are crystal clear about why you are partnering. To help ensure a good partnership fit, look first to cultural fit. Recent research indicates that 50% of all company execs admit that their company’s culture — either too much pride in ownership, or a “not invented here” syndrome — hinders partner collaboration.
To better align company cultures, changes in leadership style, company change management processes, and even incentives may be needed. Leaders must espouse and actively promote the value of partnering, as well as encourage skill development and other resources to facilitate active partnering.
Step #3: Create a Partner Support Ecosystem.
This piece involves a 2-pronged approach. First, you must identify your key distributors/indirect channel partners, and focus your energies on them. All too many companies treat all their distributors the same, but all are not equally critical to meeting your company’s objectives. For your strategic distributors, develop metrics and protocols. Devise early warning systems to prevent distributor failures. Be rigorous not only in applying metrics, but also in honestly evaluating the relationship: what is working, and what is not? And make sure both companies are devoting sufficient resources to making the partnership work.
The second part involves making sure you clearly understand what motivates and drives those key distributor partners. Find ways to “walk a mile” in each others’ shoes. Make sure open and honest dialogue is encouraged and exchanged frequently. How do we each feel about the partnership and what we’re getting from it?