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[October 3, 2003]

Customer Catcher™

By Martin Wales


Sales 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 the following:

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 activities.

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.

Complexity
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?

Poor Training
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.

Quick Release
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.

Impotent Incentives
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.

Part 2


Like what you've read? Go to past Customer Catcher columns.






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