Let's talk about building and managing effective distribution channelsthird party distribution channels that can help your company to take itself to the top of its market and beat your competition. Many companies, for years, have looked at third party distribution channels as a vehicle for fast acceleration of their sales. There's a plethora of different types of third party distribution channels out there that you can select, develop and manage for sales success. Those range from value added resellers, to system integrators, to manufactures reps, to OEM's, to distributors, and to agents as well as international representatives. All of these types of third party distribution channels are immediately available to many companies and can be deployed for a fraction of the cost of a direct sales force. In addition to that, the cost can be very variable and can be absorbed by the actual sales revenue as it's produced, as opposed to being up front, fixed and unavoidable when you deploy a direct field sales team or inside sales team. One of the biggest mistakes that companies make when they deploy a third party channels however, is to think that the companies that they sign up are going to do the work on their own without any support from you. One of the things that we've seen over and over again as companies spend a huge amount of resource and effort to go start, create, deploy third party system integrated value added reseller networks but they don't provide any resources, any management, any support to them after they come on board. If your company is thinking about deploying those kinds of third party distribution channels one of the hidden costs associated with that which you want to make sure that you factor in, in addition to discounts and commissions that you're going to pay, is the amount of sales support, distribution, product support, technical support that you're going to need to proactively supply to those resellers in order to make sure that they're optimized in their sales performance for you. A lot of companies think that if they can sign up a network of system integrators and resellers they'll go sell on their own. But the fact is, when the distribution channel of the ones that provide active support in the form of lead generation, in the form of sales support, and in the form of technical support training for their reseller, they gain active share from their resellers, so their resellers are thinking about promoting their products verses their competition. All sorts of incentives, rewards and recognition programs are available to be put in place just as you would put in place for your direct fields sales team if you were to have a direct sales force. The rule of thumb that I've found is treat your resellers and third party distributions channels just as if they were your own employees. Understand how to motivate them, how to get to know them, create relationships with them, spend time with them in the field, make sure that they have the resources and support in order to be effective at their job and you can win the distribution channel and get them selling for you. If you think that you're going to get something for nothing from third party distribution channels, you're probably wrong. The fact is, nothing is free in sales and it certainly implies to the notion of third party distribution channels. We'll talk in subsequent articles about how you can actually improve the management you sell through using some basic techniques of channel management. |
