Channels Fail At The Source: How To Make Your Distribution Network Stronger
“The fish stinks from the head down.”
Does this old saying apply to your distribution and sales channels? All too
often, companies with distribution, reseller and VAR channels blame their
channel members without much personal introspection. You might hear, “It’s
the inability of all the ‘Mom and Pops,’ or small-time operations, to sell
that is responsible for this quarter’s bad sales numbers,” or, “They
couldn’t sell their way out of a paper bag.” The finger-pointing and excuses
are endless and almost cliché.
IS THERE LINT IN YOUR BELLY BUTTON?
Let’s stop -- right now. What are you really doing to help those who, in
the end, are ultimately responsible for your own company’s success? Take
personal accountability with some good ol’ belly-button gazing and ask
yourself a few questions. Whether you’re a hardware maker or software
development company, you may have been slightly guilty of at least one of
High Speed Recruiting
Quickly building up a channel of any Resellers willing to sell your
product implants a handicap into your channel from the beginning. This is
especially prevalent among start-ups. You want to get as many Resellers or
dealers as you can to get your first sales and possibly to impress your
investors immediately. This is a false sense of success based on the sheer
volume of dealer agreements signed and the weakness is soon evident from
poor sales performance.
Recruiting VARs that don’t have the appropriate technical expertise or
infrastructure leads to dissatisfying end-user experiences. Those same end
users are going to be calling the manufacturer in the end and tying up
resources. Doesn’t this seem to be negating the whole “Value Add” game?
Select only resellers who can add value for you, as the manufacturer, and
for the customers who buy from them.
Expensive Start-up Programs
It is not attractive for a VAR or reseller to even consider carrying
a new product that is going to cost them more money and time in their minds.
Presidents and owners know that adding a new service or product line
requires money, resources and time that can only be taken from their current
Many software publishers and hardware manufacturers charge fees for their
training and other items, like an “in-house” system. And, that’s before
travel costs and lost business and opportunity because techs are pulled off
duty. In addition, existing clients of the resellers now may suffer too. In
limited cases, VARs may even become defocused enough from their current core
business and reduce selling your ‘cash cow’ line.
Channel development programs with too many definitions, rules,
regulations and specifications stop sales dead in their tracks. Complexity
increases your ramp-up time and frustrates all parties concerned. Beware of
making your reseller program so complex that more time is spent in
administration than selling.
The worst cases generally involve the classification system of channel
resellers. Platinum, Gold and Silver, or Premier, Professional and Partner
levels were all dependant on product lines carried, volumes sold and
certification programs taken, etc. etc. etc.
Eagles, Turkeys or Ducks? Whatever. Simplicity is the best strategy here.
Sounds simple, doesn’t it?
Who does your training? You couldn’t be one of those companies who
just tells the sales people to handle it all, could you? If you’re small and
just growing, perhaps this is your only option, as long as you support the
sales reps with excellent training tools and curriculum materials. Allowing
sales reps to develop or edit their own is a recipe for eventual misfortune.
There must be very few people in the industry who aren’t aware of the
‘Version 1 Syndrome.’ Pathetically, it can go on forever through subsequent
versions too, e.g. Release 1 of Version 5. Rather than invest in Quality
Assurance (Q&A), software publishers let the channel and the customers help
debug the software and point out next version features more than necessary
or simple wisdom would suggest.
Equally unimpressive are sales incentives that are weak. You can’t call them
incentives if nobody ever gets them. The most obvious mistake made here is
rewarding ONLY the top performers. The more team members you reward, the
greater your overall sales momentum will be. In my experience with sales in
the trenches, nothing was better than cash. Enough cameras and TVs already.