Indirect sales channels: ten top management tips

For many companies, a staggering amount of revenue is generated through indirect sales channels - an assertion confirmed by Gartner Group's report that around 60% of the US gross domestic product (GDP) is sold indirectly. So how can businesses manage indirect channels more effectively?

Executives need to develop and maintain strong relationships with channel partners to maximize market share and push back the competition. A recent white paper from Partnerware lists dozens of strategies to help companies become more 'channel-centric', offering advice on implementing a channel management programmes. The ten most useful tips from the paper were:

1. Approach channel management as a mission-critical process that directly impacts overall company performance. Remember that the channel is a unique and autonomous audience, demanding its own set of tactical considerations. By ignoring channel management or simply sweeping it under the "CRM carpet" you risk alienating trusted sales partners and forgoing significant revenue.
2. Companies limit the effectiveness of their channels through apathy and subtle sabotage. Overcoming these 'sales prevention programmes' requires a change of attitude, where the roles and rules governing a channel are clearly understood - and mapped appropriately to the sales process.
3. Don't expect your partners to support your products if they require too much change in the way they do business, or to sell your products if they are not already entrenched in your market.
4. Never forget that the market is glutted with products. Don't inundate the channel with product inventory unless you are prepared to support the products with planned activities and aggressive programmes to pull them through to your end users. Provide solid sales tools and training programmes that will enable your channel partners to create services and downstream revenues surrounding your products.
5. Ask yourself if your product is strategic to the channel's business model. Find out if your partners are emphasizing your products in their selling efforts. Reward them for doing so.
6. Channels switch customers to known product brands more than 60% of the time (drawn from the CMP study The Influence of Channels). Practice simultaneous branding, in which you brand products to both end users and the channel at the same time. Channels must be told why customers will ask for your brand and how it will ease their pain. And be sure to allocate a significant portion of your marketing budget toward the introduction of new products into the channel.
7. Make sure you have a process defined to address channel conflict issues - you can be sure they will arise. Bear in mind that a little channel conflict can sometimes be good as long as you manage it well, and respond to the channels' needs - clearly explaining the reasons behind the decisions being made.
8. Automate channel management to cut costs and make it easy for partners to do business with you. However, be sure that your system can be configured to execute your company's own specific processes (when it comes to automation, one size does not fit all.) Minimise risk with a phased approach, implementing one process at a time, and starting with the processes that can provide the greatest impact.
9. Make sure your channel management systems provider has the expertise and real-world knowledge to help you in the pre-implementation planning and strategy work - before introducing the technology.
10. Achieve long lasting channel relationships by carefully examining your end-to-end process for delivering products to your customers. Make adjustments to compensate for the important role your partners play. Evaluate your channel business proposition, which details the reasons why they should do business with you. If it's not compelling... make changes until it is.

A free copy of the white paper can be obtained from Partnerware's web site.