So Someone Else Has Caught Your Eye?
Principal, Lucrum Partners
An increasing number of emerging growth B2B CEOs are considering ditching their internal sales teams in favor of partnerships, or channel partners. Yes, the secret is out.
But why? The B2B sales talent market is challenging, and CEOs are frustrated with missed revenue opportunities due to open headcount, high seller turnover and the ramp up time for new sellers.
Dear CEO, Not so fast.
Channel partners are not a new path to market, but CEOs who are new to partnerships need to consider the following three key elements of an effective partner program
Warning: You have to earn your stripes.
Strong third-party relationships can drive efficient revenue growth. While true, developing trusted relationships isn't an overnight exercise. The CEO must commit to executive relationship management with the partner. The CEO's partner management team is the conduit for gaining an understanding of each partner’s stakeholders personal and professional interests. They must show the partners that they will work hard for the partner's success.
Partners buy results, and a CEO must be clear eyed on how partners measure success of their vendor partnerships. The company must understand that partners have existing products and service distribution relationships, some of which can go back a lifetime. Any new relationship must be built on the "+1" value a firm can bring to the partner. Does your product/service close a gap in offerings or capabilities for the partner? Does your solution enable a partner to open a new market or expand their current markets? Does your offering add upside revenue to the partner, or are you trying to displace or shift revenue the partner is currently receiving?
2. Sales support
Warning: Channel Partners will never have the same level of expertise of an internal B2B sales team.
Partners often have a large "catalog" of solutions created by multiple distribution agreements with brands. Partners have competing priorities and their sales teams can naturally take the path of least resistance. The brands that make it easy to sell and support their offerings will have an easier time creating mindshare with the partners sellers.
Make it easy! Channel partners require product training as well as marketing and enablement support. Partners may require technical sales support from the company to participate in sales calls or proposal development. Marketing will need to support the partnership with developing co-created combined value prop messaging, co-created content, and even support the partners' SKOs (sales kickoff meetings) and event/conference investments. Partners should have a robust and ample tool kit with a focus technology enabled product demonstrations and virtual sales rooms
3. Performance management
Warning. Channel Partners can not be managed like direct sellers.
Metrics like daily sales calls or number of weekly meetings with buyers are no longer managed by the brand. One pitfall that organizations fall into is thinking they can manage the performance and priorities of third party sellers as they would with direct employees.
Instead, ensure there is mutual benefit before signing a channel partner. The benefit to the partner must be aligned to the partners strategic initiatives. The partnership should kick off with a structed business outcomes plan, including business review dates. The plan should be clear on executive relationship mapping and development, alignment of objectives, and provide clarity on how the partnership strengths will be leveraged and how identified gaps will be addressed. Spiffs and contests will be managed by the partner, so its important that all parties are clear on how the market development/sales incentive funding will be passed through the partner's sales leadership organization.
CEOs have a lot to consider before displacing their own B2B sales team with a partner strategy. Perhaps the best bet is to take it slow, supplement the current B2B team with one strategic channel partner, and closely monitor the performance impact against the initial assumptions.
If you are a CEO contemplating adding a channel strategy, our team at Lucrum Partners can help. email@example.com