9 Challenges with Partner Sales

After a week in Germany and 100+ different conversations with Sales and Marketing professionals in Berlin and Cologne at DMEA and FIBO, I can conclude that people love to meet people at these events. And they love to talk about their success to anyone who's a potential buyer or partner. But I'm not their typical buyer, why the conversation takes another angle.

Instead we talk about what makes success and I want to understand how hard they need to work when the fairs are over. Sales is never easy, but indirect sales (when the business model includes selling through distributors/partners) is even more challenging. Still, where there are most support to be found from CRM systems and Sales Enablement platforms, is for the "normal" direct sales model.

So, I focus on those who scale through partners, simply since they have more challenges to be identified, understood and solved.

Some say that the indirect Go-to-market model has become even more relevant, and important, in these times when cost efficiency and capital employed matters for most companies. Few small and midsized companies have the resources to hire their own people in 10 or 20 countries.

I don't know if that's true, but it sure make sense to have a strong direct sales model on the home market, and then scale further internationally through partners. Still, everyone I've met who claims the opposite, of course makes that claim based on the challenges that comes with the indirect model.

Pros with the indirect model

Local distributors knows the market, have established networks and placing our offering in their portfolio means a great opportunity. All, as long as we manage to engage their sales organization to promote our products and articulate its value proposition to the customers. It's also possible for any company with a great product to reach more customers faster through multiple partners, potentially making the growth curve steeper.

Cons with the indirect model

But, placing our growth in the hands of people who we do not control (like we do with our own sales organization), with less ability to follow up leading indicators like we're used to through our own CRM systems (no of activities or sales calls, pipeline velocity and more), means we somewhat put our eggs into a black box and hope for the lagging targets to be met.

I have not met many CEO:s or Commercial leaders who claims that all their partners deliver on top, or even as predicted. This would indicate that either predictability is tougher and forecast accuracy is lower, or that our organization simply don't have the capability to optimise the channel outcome. This also becomes clear when asking any of them about how many months it takes for a new partner to hit their curve, where some says "too many", while other are more precise and states somewhere in between 12 and 18 months.

But it seems like many companies have resigned and accepted this as a law of nature, like we have to accept to run any indirect sales model blindfolded until the revenue actually comes. That's like closing our eyes and driving the car in full speed and see what happens, and if lucky the road was actually straight. All because they might not have yet seen any tool that could measure activity and engagement within the distributors organisation.

Very few sales leaders would run their own sales organization without any leading indicators of success...

Leading indicators

Lagging targets is normally measured in the amount of revenue generated from a partner, which of course comes as a result of their abilities and efforts. But what would leading indicators look like in the indirect sales model? Here are five examples:

• Activities to learn about the products, its value proposition and application areas. All learning activities made takes a partner sales rep one step further toward the ability to sell.
• Asking questions, the more questions the more interest and engagement.
• Sharing product material with customers, showcasing demo videos, presentations, specifications and more. More activity means a broader reach.
• Getting end customers to interact with the shared material, aka read, watch or even share further, which ultimately shows interest and traction.
• Quoting our products and especially collaborate in mutual tenders and deals build, which further builds mindshare and relationship.

How to excel in partner sales?

A successful partner model takes more than a great product and skilled people. Just like any direct sales process it also requires a robust process and system support. After attracting and recruiting new partners, you need to enable and further engage them over time.

There might be no silver bullets, simply hard work, but life can be easier if you navigate the challenges. Here's a model in three levels, which could help you assess your existing way of working, or if you are to set up an indirect model, it brings something to hold on to.

1. Content sharing and administration, which includes making sure that every one of your partner's sales reps have access to (and utilise) all trainings, tutorials, product presentations, images, videos, price lists and more. All to make sure they both understand and can articulate the value proposition for your products, just as good as you would do it.
2. Partner engagement, making sure to earn their mindshare and focus so that they choose to sell your products before others. Engagement can somewhat be incentivised with bonuses and sales challenges, but for long-term success this might take building a relationship between your brand and every sales rep on the field. We need to make sure they are just as active as our own salesforce would be.
3. Business Management, running the whole process like a pro means having a robust way-of-working, combined with system support which will connect each partner with your own organization. Knowing that partner sales means cascading through a pyramid of people - from your channel manager, the partners, their sales reps, and all the way to the end customers.

Drive more revenue by managing these 9 challenges

With above three levels in mind, let's take a look at the challenges they bring.

Content Sharing and administration

1. Distribution of content through the indirect model is time consuming and inefficient. One reason is that it means cascading, through multiple tiers. Normally, every time an update of anything is made, emails are to be sent to notify the main contact with each partner, who in their turn are to share the updates to each sales rep, who in their turn hopefully use it in the communication with customers.
2. Most companies still email material upon demand, but some share a global drive with their partners. Sharing one common drive (or having a login to a global partner site) means everyone needs to spend time on searching for whatever they need, every time they need anything. Just like the old saying "time kills deals" we see here that with partners "time kills engagement". This is why many experience that only 2 - 4 percent of their partners actually logs in to their current partner portal. Instead they call their contact within your organization and ask ad-hoc when they are in need for some assets.
3. Many struggles with version control and compliance, or brand alignment – making sure that the right information is used at all time, by everyone. Coming back to #1 above we see that updating content, and communicating the changes through the channel, is one of the most time consuming parts for marketeers. And still old versions are used out there, which in some industries (like Medtech/Healthcare) represents a critical risk factor.

Partner engagement

1. Many distributors sell parallel brands, which means competing for time and focus. We need to stand out from the others to earn mindshare, in a game where partner reps have the easiest path selling what they know best and have had earlier traction with. We all know change means friction and sales reps don't like friction.
2. Reducing that friction is one of the most important things and most certainly one of the key critical things in a partner model. This means in some way being always available, providing access to training, relevant product material, as well as to product expertise who help building trust and knowledge. As a member of the "Netflix world" we have gotten used to having access to all we need "one-click-away". This is why many larger and established vendors provide a Partner portal to their distributors or resellers.
3. Everyone wants active partners, but like mentioned earlier there might be no current ways of knowing how active they are except by calling them all to check in, ask and trust they know what's happening out in their organisation. Monitoring engagement through activity, getting KPI:s for partner engagement and reach, is vital. If marketing don’t know what content is used, they can't evolve and become even better and if channel managers don’t know which partners who are active or not, they spend endless of calls that might, or might not, end up in further uncertainty.

Business Management

1. If we take one step further up to the C-suite perspective, we know indirect sales model means selling through multiple tiers, but also in multiple parallel sales cycles. First we are to sell our idea, or product, to a new partner in the "Attract & Recruit phase". Then we need to sell the value proposition to their sales organization making them "hooked" on our product(s) in the "Onboarding phase". There after they can drive the cascade of sales process on the field for us, and we keep on enable them to keep on brining in revenue. I would stress that there most companies lack a consistent interface for the "Partner journey". And, there are less datapoints than what we normally gather in a direct sales model, which makes partner success less predictable.
2. No matter which type of partners we have, what tier they are on, or what we call them, the core here is "Partnership". The means we are connected and collaborate for success. Some interact more than others in key opportunities and tenders, like selling strategic deals to the energy sector, or like all tenders in the public sector. Activities like Q&A, mutual review of RFP and tender documents and more are often scattered through emails, calls and meetings. Best case the CRM is involved, but when two parties collaborate and store data into their respective CRM-systems, it becomes hard to get the full picture. Inside a company we always aim to have common grounds, but in the partner model most companies have no common place for their collaboration.
3. Finally, being one step removed from the end-customers means lack of insights. Having no common ground (or system) for the collaboration, no leading indicators of success (activity and engagement) top up the challenges. This hurts the ability to forecast the business, and we are back to where we started with the need to wait until revenue actually comes, to know if a partner will bring success or not.

If you have a pure distributor model, or have a part of your revenue comes through indirect sales (or if you're evaluating adding a partner model to your go-to-market strategy), it would be interesting to hear your reflection about it all. How mature is your model today? Which challenges hurts the most? Please feel free to reach out to me on [email protected] at any time for a conversation.

PS. If you would like to learn more about how SP_CE helps companies in 32 countries solving the challenges (all from scale-up Medtech companies like Swiss B-rayz, to global leaders in consumer electronics like Creative Labs), our team is always there for you. DS.