70%+ of ALL products across all 26 verticals are sold through partners today, and in technology 90% of products are predicted by Gartner and Forrester to be sold via partners by 2026. If you don’t have a good understanding of the channel and a strong channel strategy, chances are, you may soon be irrelevant or extinct.
Sales is a tough role at the best of times but selling through partners presents some extraordinary challenges. Channel managers have big targets to hit with no power to hire or fire the salespeople upon whom they depend to meet their quota. They don’t determine pay or conditions and rarely determine who gets hired in their sales team. Their performance is measured and dependent on the performance of others.
All they have is influence.
Sure, they can offer (MDF) marketing development funds and SPIFs (sales performance incentive funds) but the research on offering financial incentives is very clear, they almost never create lasting performance improvement. Any improvements are usually short-lived if they have any impact at all (see Alfie Kohn, “Punished by Rewards”). I know, I know. Many of you will ridicule that suggestion, but EVERY study proves this point and you can argue with the facts, but you will still be wrong.
Great channel managers understand who they are working with. They get under the surface to discover the intrinsic motivation and personal goals of the owners, leaders and salespeople with whom they partner. They find ways to empower their partners’ salespeople to achieve their personal goals and in doing so, achieve their corporate goals. Excellent channel managers have more in common with general managers than salespeople and channel chiefs have a profile closer to that of a CEO than sales managers or directors. Both require good financial and business acumen and a strong ability to plan activity and manage resources, but they know how to get the best out of other people.
Average channel managers call up each month and say, “What have you got for me?” and spend their lives being seen as hinderance not a help or being seen as a resource to be exploited for money, technical resource or leads, NOT as a partner.
Partnership is best defined as helping each other to perform consistently better. If you look at your partnerships, can you honestly say that is what happens? If so, congratulations, you are among the top 2%. If your partnerships aren’t working, the first port of call is the mirror.
Good channel managers are excellent communicators. The best among them understand that their partners are their best customers. The worst see partners as merely a means to get hit quota and blame them for their own failure to understand the role and the way partnerships actually work.
Effective channel managers earn trust, earn the right to train their partners’ salespeople to sell as if they are their own. They are ambitious and driven and seek out like-minded partners with whom they agree goals, co-develop territory plans, growth and account plans, pursuit plans, they midwife deals and pass on skills. They are excellent at analyzing and deciding which pursuits to go after and which to drop early. They value process, they’re disciplined, organized, highly self-aware and read the situation accurately. They take action in order to drive results and adapt to the current environment and conditions but keep an eye on the future.
The best channel chiefs go further in that they help their channel managers and their partners solve problems, establish a cadence of accountability not based on the carrot and stick but one built on understanding the personal drivers of their dispersed and diverse teams. They have strategic vision and clarity, so they know when and whom to delegate well, pushing decisions down the chain of command. By doing this they tap into every person’s intrinsic motivation and help them perform to their best. They systematize, develop processes and tools to ensure clarity and efficiency in the partnership sales process, they encourage constructive conflict to ensure everyone’s ideas heard and views respected but they’re not afraid to make decisions and, because they’ve earned trust and loyalty, their decisions are respected and carried. Ultimately, the best leaders understand they are accountable for the final result and they know that they depend on others to deliver them.
Bad channel managers often blame extrinsic factors (so often, their partners) for their poor performance. Bad channel chiefs (often Direct Sales directors with a channel component to their role) blame the channel for many of their woes, underfund, under train and undervalue their partners forgetting what you project out gets reflected back. Many partners suffer from vendor fatigue because of the way they are treated the poor levels of understanding and continuity caused by the poor quality and high turnover in channel management roles. The lack of trust earned between vendor and partners is a simmering resentment that is reflected in performance where channel sales are seen as the ginger, ugly stepsister of direct selling and too often has been the place failed direct salespeople have been sent to die.