Indirect sales to grow your business?
Do you want to grow your business quickly, with little risk and less investment? Implementing an indirect strategy is recognized as the quickest and least risky way to grow sales.
An unavoidable phenomenon
Today, over 60% of company sales are generated by distribution networks (resellers, integrators, hosting providers, consulting firms, wholesalers, etc.). All market leaders have structured an indirect approach, whether in hardware or software. It's also the most appropriate solution for SaaS solution publishers who want to expand rapidly in order to reach their financial break-even point.
The advantages of an indirect sales network
In the words of IBM's chairman: "it allows us to be present where the customer buys". A distribution network will thus enable you to significantly improve your sales coverage rate: attacking international markets, enriching your offerings with business skills, meeting complex customer needs and, last but not least, providing the local service so eagerly awaited by customers.
Direct or indirect?
These 2 "routes to market" are not mutually exclusive. Direct sales generally target the upper end of the market, with high average sales baskets. Sales partner networks, on the other hand, will address the rest of the market, while also being able to collaborate with direct sales organizations. The leverage provided by indirect sales is a major argument in favor of addressing a high-volume market: a single sales resource can manage dozens of sales representatives, and thus achieve very high sales productivity.
Over 60% failure rate!
While indirect mode is unavoidable, it is also a source of considerable frustration. Over 60% of sales partners fail to meet the expectations and sales targets set by their suppliers. And on closer inspection, most of the blame falls on publishers or manufacturers who have failed to structure the implementation of their partner networks: opportunistic sales approach, no methodology for recruiting or developing partners, no dedicated team, no alignment of the company behind its sales partners.
A corporate project
Implementing an indirect strategy cannot be improvised. Without a strong commitment from top management, there's no chance of success! In fact, an analysis of partnership best practices shows that the best software publishers and manufacturers on the market have all aligned their various departments (from R&D to support and marketing) to really help their commercial partners. They have implemented best practices through a methodology, dedicated resources to recruit, develop and manage their partner ecosystem, invested in management tools (such as PRM - Partner Relationship Management) and structured their internal and external processes.
What questions should you ask yourself to ensure the success of your indirect sales strategy?
Does senior management have the will to set up a new sales channel?
This commitment needs to be translated into "ad hoc" investment.
Is the company's vision and ambition clearly expressed?
Be aware that your partners will be taking risks by choosing you. So you need to reassure them of your willingness to work with them on a long-term basis, by clearly setting out your vision and ambition for joint development.
Is your gotomarket clear enough to avoid channel conflicts?
You need to take great care to ensure that the different channels work together (especially the direct sales force and reseller partners). This requires precise definition of the territories allocated to each type of distribution channel, and compliance with operating rules.
What is the profile of the resellers, integrators or other partners you wish to recruit?
Your objective is to have a network of competent, committed and involved partners. To achieve this, you need to define the recruitment criteria for your future partners in advance. And don't forget: the best partner is the one who considers you strategic to their own development!
Are your solutions channel-ready?
Do your offerings match partner expectations? Partners will judge you on 4 criteria: the robustness of your offerings, the notion of "easy to do business with", the reputation of your products and, above all, the profit and margin prospects they will generate with their own services, which they will bill to your joint customers.
What is the financial impact of implementing an indirect strategy?
Compared with a direct, non-scalable approach, and thanks to the leverage effect, the ROI of an indirect strategy is quickly demonstrated. However, a minimum investment is required from the outset: a dedicated sales manager, a good value proposition to recruit the best partners, a partner portal or even a PRM, a start-up plan (the famous 100 days) to successfully launch new partners. AND the implementation of business plans for each strategic partner.
What resistance is there internally?
Traditionally, you'll have to deal with some resistance within your organization. Don't forget that the success of an indirect strategy depends on the alignment of your company's various departments. A simple message to pass on: "consider resellers, integrators and consultants as a natural extension of our direct sales force"!
Conclusion
Indirect sales are an essential development opportunity for any ambitious company. But this "routes to market" cannot be improvised. The key to success lies above all in the determination of top management to structure and implement a set of partnership best practices.
The expert contributors are authors independent of the appvizer editorial team. Their comments and positions are their own.
Article translated from French