If you’re a technology manufacturer, odds are you either sell your products direct or you sell via distributors and resellers, a.k.a the Channel. As Mike Nikolich points out elsewhere in this issue in My Two Cents, a lot of people have predicted the channel would diminish in importance, but guess what – it’s still rocking and relevant. It can be easy to look at the channel as your revenue stream, and focus on the money. How much product are our top channel partners selling this month?
However, shrewd companies do a lot more care and nurturing of channel partners and even invite them to participate in PR opportunities. A great example is Cisco®, which is supporting the channel by making professional resources (such as Tech Image) their channel partners couldn’t ordinarily access on their own available to those partners to dramatically increase awareness of technology implementations. Another great example is NEC Display Solutions, which finds great case studies via its channel partners. But more about PR later.
Having lived through a few channel programs myself, the truth is effective channel strategy is relatively easy to outline, but extremely hard to stick to. For example, making a commitment to sell through the channel is easy, but passing up a big direct sale is hard. The problem with wavering is that your channel partners have memories like elephants and once they become skeptics, the well is poisoned and they’ll walk away.
Here are a few keys to priming the channel to help your resellers become more effective and stay that way. First, set out to be a great channel partner and try to look at most of your business decisions through the eyes of a channel partner. If management wants to do something that will likely irritate the channel, voice your concern and make a case. Remember, it takes years of commitment to build a great channel program and reap the rewards, but only a few bad moves to wreck your channel program.
Look at your sales force and try to minimize conflict with channel partners, possibly by turning your sales team into a channel support mechanism. Review your sales incentive plans to make sure you are encouraging direct employees to help steer business through channel partners. I’ve seen cases where direct sales people are actually competing with the company’s own channel partners on a deal. Don’t berate the salesperson because this is a management issue, and a fix usually requires reworking both internal comp plans and channel incentives. If you must still retain a direct sales program, try to put product differentiation in place so channel partners have a good story about the extra value they bring to the table. Or, you can use a pricing plan that allows customers to purchase direct, but at a premium. That is often enough to maintain channel integrity.
In this day and age you also have to keep the long tail of the Internet in mind. The Internet has removed many of the old geographical/territory boundaries that once occured naturally. It's sort of self-regulating for services -- it's unlikely a buyer in Cleveland is going to look to a channel partner in Orlando for consultative services. But for products it can be a genuine concern, creating conflicts between channel partners as well between partners and your own sales force. After all, UPS, FedEx and others ship everywhere. If you have products that will be sold on the Internet you'll need to look carefully at how you're managing territorial issues.
One way to go is to look at your competitors and assess their channel programs. Are they doing SPIFFs, rebates, contests or other promos? Have they set up communities or forums where partners can share ideas? Are they communicating with the channel through blogs, Facebook, Twitter and other social media? What elements of those programs do your channel partners like?
Ask and they’ll tell you. Channel salespeople are very quick to study a program, decide if it has potential for them, and then figure out a system they can use to maximize earnings. If they like the incentives and rewards in your program, they’ll get creative, so it is always interesting to see if the desired results occur from your perspective. Channel salespeople are also likely to gravitate to the top programs and it’s important to learn what the competition is doing to tempt them. As you design the program, a tiered or percentage uplift program is important so that all sizes of reseller are able to see growth targets that are achievable.
Create a formal once-a-month newsletter to communicate updates on programs, products, prices, promos and selling tools. Try to assign an administrator to channel communications and make sure the newsletter is carefully proofread and published consistently. The same goes for social media efforts. Forums and communities have to be moderated, and sometimes discussions have to be started. Blogs and Facebook pages have to be populated, Twitter streams need to be updated constantly. The good news is, social media channels allow you to adjust quickly to changing market conditions and communicate on the fly. The bad news is they require constant care and feeding by someone who understands the value of social media as well as the topics being covered.
Share expertise with channel partners, via training events, buddy sales calls, and selling tips and tools. Keep it simple, memorable and focused. Face time at your channel partners and incentives are a good combination.
Once you have all these processes clicking, start asking partners about successes they are having, and look for opportunities to publicize those wins. A reprint of an editorial article about a user install is one of the great sources of ideas for the channel. For example, if your channel partners read about a complex installation in Sound & Video Contractor and the article describes the business challenge and how your products or services were used, more resellers get ideas about how to approach similar business opportunities.
Cisco has found that Channel partners are often lean and mean business machines that don’t have the marketing or PR resources Cisco has. One approach is to help channel partners out by writing “customer win” press releases with a quote from the channel partner. Try pitching editors on story ideas based on cutting-edge work your partners are doing. When you are preparing to make an announcement (e.g. product or new incentives), pre-brief two close partners and coach them on key messages and how to conduct a successful media interview prior to the announcement. Then you’ll be ready to pitch editors at CRN or other publications written for the channel because you can offer resellers’ perspectives in an interview. One added benefit of pre-briefing is you might get unexpected suggestions on how to improve the announcement or underlying program, and you can fine tune your plans.
Now, rinse and repeat. If you always remember to do the right thing by your channel, you’ll understand your business better, make some lasting friendships, and also – yes – you’ll be able to get back to counting the money.
About the Author: Lawren Markle is media relations manager for Tech Image, and is based in Altadena, California. He can be reached at Lawren.Markle@techimage.com
