June 26, 2008
Part 2: What is your plan?
Building a channel requires a long term commitment. You need to know where you are starting from and most of all, where you want to go. Pending that, you will be able to prepare for some of the key issues you will need to address on the way. Continuity and consistency are key to a solid relationshipHave you thought through and documented short, medium and long-term plans?
- Will you move directly to a full indirect model? (no more end user invoicing).
- Do you plan to make that move in the coming years
Is your sales compensation policy compatible with indirect sales model
Your direct sales staff must not lose-out if a customer buys from a channel partner. Otherwise they will play against your channel and your partners will walk away
Your channel partners must not see your direct sales force as the enemy
Have you thought through your total pricing and discount policy
Benchmark it against your competition’s
Do you have a pricing and discount policy that will encourage your new partners to reduce your own costs (that is why you share part of your margin with them)
Build a realistic value proposition that your Account Managers will be able to defend in front of a seasoned reseller principal
“Right-size” your channel recruitment strategy:
Don’t go berserk and recruit every partner you can find
How many partners can you handle, should you recruit a distributor?
Should you recruit one or several distributors?
June 18, 2008
Can you tick all the boxes before jumping into the channel?
In the last 10 years, waning ICT growth in the enterprise segment has forced most actors to re-examine their routes to market in order to make sure their products and services are available where their prospective customers expect to find them and where the real growth is. Without necessarily taking a “bottom-up” approach, the whole ICT industry has come to the conclusion that it would only be able to access certain segments via an indirect channel. This is because average size companies are buying a lot of ICT products and services but they rely on their channel partners to act as an outsourced ICT department. Certain major IT manufacturers have recently made their “coming out”, confirming a strategy they weren’t necessarily admitting to in the recent past.
This short series is built from experience and attempts to list a number of areas you need to have thought about before you jump into the channel.
Part 1: Do you have a strategy?
For a start-up business, this is a founding decision and you will be building your whole business model on your route to market strategy. But if you are already selling direct, you need to make sure this fundamental move is not going to unbalance your whole business, resulting in a potential collapse of your overall sales and often causing frustration within your own organisation and amongst your newfound partners and existing customers.
- Why are you making this move?
- Can you give your prospective partners a good reason for the change?
- Does everyone in the company understand the reasons?
- What is your vision?
- Your new partners will be reassured to see that you actually have one
- Working with partners requires long term investments on both sides
- If your potential partners don’t trust you they won’t play
Coming soon: What is your plan?