We have a question for you. Does your channel partner business proposition drive bias for your products and services within your channel partner community?
When asked to design an indirect sales model, a key element of the discovery process is analyzing the business proposition that’s being offered to the sales channel. Essentially, we seek to understand why a channel partner would invest in selling and supporting a vendor’s product or service and what compels the channel partner to continuously bias customers to that vendor’s offering.
In many cases, we’ve found that when channel revenues are flat or declining, the channel’s bias toward one vendor’s product or service is low. This is because the vendor’s primary focus is on immediate financial considerations, like gross margin and/or providing rebates.
Meanwhile, other considerations are neglected, such as the level of resource and commitment needed to make your offering part of the channel partner’s product portfolio to their customers; key factors like product positioning; and a vendor’s brand value and the level of investment (both direct and indirect) needed to successfully sell and support the vendor’s products.
Consider how the following factors impact a channel partner’s motivation to actively sell and support your products.
- Product positioning – How does your product fit within the channel partner’s current portfolio of products and services?
- Is it mainstream with their current product offering?
- Is it reflex and generally sold to the end user when they select another vendor’s service or request products?
- Is it an orphan and offered on a one-off basis when requested by the customer?
Have they made the appropriate investment in sales, service, development, and consultative capabilities, which directly support the sales, support, and service offerings in your product category
- Your brand value to the channel partner – Does your brand provide incremental value to their business through increased revenues, potential new customers, entry into desirable new verticals or product categories, or elevated the perceived value of the channel partner in the eyes of potential customers or within their market?
- Level of investment required from the channel partner – What is the perceived risk associated with moving resources away from current brands? What are the hard dollar costs associated with obtaining certifications and trainings or capital expenditures on additional infrastructure? Will your offering offset the opportunity cost associated with diverting their attention from current offerings?
- Channel conflict and your relationship with the channel – Are you over distributed? How is your company perceived within the channel? Are there any perceived channel conflicts that might dilute the partners’ level of bias for your products and services toward your target market? Do they feel they will have to compete with you directly for the same customer?
Misalignment on any of these business proposition components can lead to “low wallet share” with key partners and potentially your entire sales channel. Make sure you take a step back, analyze the personas of the partners with “high wallet share,” actively recruit and on-board partners with like personas, and quickly divorce yourself from the ones who do not.
Check out how we were able to help a global technology manufacturer with its need for additional partner support to reinforce channel supply sales efforts and drive OEM supplies growth. Read the case study, Channel Partner Support Increasing Sales and Growing Market Share.
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Let us determine the appropriate strategy for your company via a MarketSource assessment. MarketSource sales experts will work with you to define your challenges and design a turnkey solution that produces results in the areas of gaining new customers, launching new products, growing market share, optimizing sales expense or maximizing a mature product.
Our sales teams deliver more than $6 billion in revenue for many of the most iconic brands in the world and a diverse mix of forward-thinking small- and medium-sized businesses. You can learn more about this topic and MarketSource’s proprietary process, empowered people and proven performance by contacting us today.