Lately, watching service providers (vendors, carriers, cloud providers - heretofore referred to as SPs) go to channel has been like watching either a reality tv show or a car crash. The way SPs approach the channel looks unplanned.
MessageBroadcast was in and out of the channel in less than a year. I don't know how you think you will get traction and sales that fast from zero.
Press release after tweet after post about this SP or that SP signing up with a master agency. That's like saying, "Hey, look! We're on Page 2 of Google!" Or we added a dozen SKUs to Ingram's cloud brokerage service catalog! WOOT! That will get us some sales - as they wait by the phone for it to ring.
Your channel strategy has to be a lot like your direct sales strategy. The same principles apply. You wouldn't hire just anyone off the street to sell your services, right?
Then why would you want just anyone to be your channel partner?
The new strategy is to sign up the masters with the hope that the sub-agents will sell their stuff. How? Going back to the Google Page 2 scenario, you are 1 out of 80, 90 or 100+ SPs that a sub-agent can sell. How would the agent know:
- Where is this SPs service a good fit?
- What are the strengths of this SP?
- How is the SP positioned against the competition?
If the master has 5 Hosted VoIP SPs, how do you think the agent (or channel manager of said master) decides who to quote? Sometimes they will quote them all - which is a lot of busy work for the SPs - and results in a useless funnel.
On Amazon, when you search K-Cup, there are 30,753 Results. Yeah. How do you slog through that to find what you really want to buy? You think being in a quote database is much different?
When you hire salespeople, there is an interview process and selection that takes place. We give lip service to when we go channel. More than once, an SP comes up with a channel partner criteria (or profile) that gets replaced with a mirror at a trade show because ROI at a show is determined by the number of people that can fog a mirror, not by the number of qualified partners that you find. At least in my experience.
Then after you hire salespeople, there is an on-boarding and training process, which, again, falls by the wayside in the channel.
Sales - direct or indirect - still requires:
- A story, USP, value prop
- Targeted prospecting
- Sales Trigger (why they buy, WIIFThem, bennies)
- Pricing, Promotions, Competitive Info
One additional item that the Channel needs is adjacency or alignment. Does your business model (and who you target and why) align with the partner's business model? If your service is adjacent to their line of business (and has low sales friction), then it is likely they can and will sell it.
If the service is low cost - like under $200 per month - it isn't likely that a channel partner will sell it UNLESS it is a cheap replacement for something customers already have AND the sale is frictionless. And when I say frictionless, I mean no glitches, one page agreement, automated deployment, etc. (Amazon 1-click sales or Apple iStore is frictionless selling. People expect that now.) At $200 per month - even at 20 points - is $40 per month. How much time must the partner invest to make the $40? What is the likelihood that the $40 sale will adversely affect the customer relationship or derail a one thousand dollar recurring revenue sale to the same customer?
If you do have a sub-$100 item that will sell easily, may I suggest a network marketing style approach? Become the Amway of conferencing or whathaveyou.
I have worked with a lot of SPs and helped a number of channel programs, these are the basic elements. Don't treat the channel as if you are Talk Fusion (and anyone is a prospective partner and customer). Pretend as if real money is involved and choose your partners carefully (along with some planning).
Interesting note: back in the day (circa 2000) BellSouth required live classes for partners to take to get pay on a service. Want to sell Frame Relay? Take the class. Pass the exam. Get the cert. Some SPs have that today, notably Alteva. But Comcast is adding a certificate program to sell its services (a big win for the TCA).