THE NEW SALES CHANNEL

Channels “partners” have been a part of sales ever since sales have existed. Channels are a high impact route to market, they enable us to connect with customers we can’t easily connect with. They provide capabilities, amplifying our offerings, enabling our channel partners and us to create greater value to the customer. They may provided deeper expertise in certain areas than we can, consequently, driving higher levels of success.

We put in place programs to attract channel partners (or if we are a channel, to attract the companies developing the products/solutions) getting them to sell our products. We train them, we provide marketing programs, content. We create contests and SPiFs to entice the partner sales people. We drive marketing programs to keep these partners supplied with leads.

Many organizations go to market exclusively through channel partners. Most other organizations have some part of their strategy that leverage partners.

Over time, we’ve seen a lot of different channel relationships, we talk about one step, two step relationships. We apply labels to different channel business models, for example distribution, VADs, VARs, Resellers, Manufacturer’s Reps, Integrators, even partners that handle ePurchases.

The dominant model has been a “sell through model.” That is the partner takes our products to the end customer, selling the products to the customer. They get a margin or commission for the sale or that product. In many cases, we may never have a direct relationship with the customer, our success is based on the partner’s relationship with the customer.

Sometimes we have challenges in managing these relationships. Often, two different partners may be pursuing the same end customer. Or some of our direct sales people may be trying to sell directly to the partner’s customer. This concept is called channel conflict/contention. We put in place processes to try go minimize or manage conflict, we have partners “register deals.” Over time, we recognize a certain amount of conflict may always exist-and some of that is healthy.

For many startups, or early stage companies, channels may be critical. These companies may not have the funding to invest in go-to-market, the way they should, or they don’t have the customer access they need. Channels (though mostly specialized), can be critical partners to the success of these companies.

Channels are a critical part of any organization’s growth and go to market/customer strategies.

But in the past few years we’ve seen a new type of selling relationship become critical. A new type of channel partner. We are still in the very early stages understanding and exploiting these relationships, but they will become as important as our more traditional sell through relationships.

These relationships are characterized by the concept of “sell with.” That is we will have to be agile in collaborating with other companies, working with them to solve a customer’s problem.

Some form of this has existed for years, but mostly driven by customers. Each of us has been in a sales situation, where the customer says, “We’re going to use this integrator….. Could you work with them……” And then there are those consultants….. Actually two months ago, a client CRO asked me to participate in a vendor meeting. He introduced me, “Dave is working with us in driving a lot of our change efforts. Can you work with Dave to make sure your solution fits with what we are trying to achieve?” Even though we were on a Teams call, I could see the look on their faces—I’ve been in their seats too many times.

Sometimes, a “strategic partner” may engage us to work on something with them. It may be as simple as passing a lead on something they won’t go after directly. Or it’s to be in a secondary role while they drive the process, occasionally saying, “We’re aligned and working with them…”

But more and more I’m seeing the need for very sophisticated “sell with relationships.” Relationships where we work with another organization, where we have aligned interests and we need each other to succeed. So many of the challenges our customers face, so many of the things they are trying to achieve go beyond what any one organization or solution provider can do. We cannot, by ourselves, with the customer address the complete problem—yet that’s what the customer is solving for–the complete problem, not the part we can address.

To create the greatest value for the customer and to achieve success for our own organizations and partners, we have to learn how to sell with others. We will have to learn how to, and teach our customers, how a number of us can work together, driven by shared interests and a goal of shared success.

While, inevitably, we will formalize these “sell with” channel programs, just as we have formalized our “sell through” programs, I suspect success will require more agility and nimbleness. I forsee the development of a network of informal relationships, where we assemble the right team, working with the customer, “swarming” a problem.

For years, I’ve spoken and written about the principles of successful strategic partnerships. As a lapsed engineer/physicist, I tried to reduce it to a formula:

This stands for:

-       Shared resources

-       Shared risk

-       Shared rewards

-       Shared vision

-       Shared values

In our research on the most powerful strategic partnerships, we’ve seen the partners carefully balance and align around the se elements, working together to create Shared Success. (It should be noted that “shared” may not mean “equal”.)

As we look at selling with relationships, the same critical success factors are at play, but now we must balance this equation with the customer and their interests, our interests, and those of the partners we are selling with.

-       customerthink