It doesn’t exist. There isn’t a silver bullet in sales. That is unless you create something so awesome that consumers just want it, like a $35,000 Tesla automobile. That’s called innovation and creating a blue ocean. Most of the companies in our sector just swim in the red ocean of hyper-competition with similar sets of services.
The average sales rep turnover is 34 percent! That is one-third of the sales force every year. Only two-thirds of sales reps are making plan each year. Is it any wonder that Accenture (News - Alert) says 80 percent of technology revenue is generated through indirect sales channels?
This year $70 billion in discounts and incentives are forecast to be spent in the channel.
This is all good news for channel partners. The revenue the channel generates is now very significant to the bottom line of many vendors. The problem most channel programs face is how to effectively and efficiently utilize that $70 billion for better revenue faster. This means that the customers will be profitable and sales will close faster.
Currently, there is a SPIFF battle heating up in the hosted VoIP space, where the effective commissions with spiffs is approaching 40 percent. I have seen up to 6X MRR for VoIP spiffs. It appears that providers are either trying to buy market share or are trying to purchase attention from the channel. In a sea of sameness, contests and incentives are an age-old method in sales.
A channel manager called me about his frustration. As a direct rep he was solely responsible for his revenue and was able to turn it on when he needed to break quota. As a channel manager, that just isn’t possible. You are selling through your partners, who are doing most of the prospecting, proposing, and recommending – without you. That is the burr in the saddle for many. Channel managers tell me that they close more sales when they can get in front of the prospective customer with the partner, but that it rarely occurs.
As the channel philosophy once again changes – we went from agent to master Agent to VAR to now VAD – providers are constantly in search of that one puzzle piece that will result in huge sales. The new puzzle piece is to go to hardware distributors (VADs) like Ingram Micro (News - Alert) to get in their catalog. That would work if there was demand for your company’s services. Without the demand, it doesn’t work that well. The silver bullet is demand, which can be manufactured with innovation or exceptional customer care.
Peter Radizeski is president of Tampa, Fla., telecom consulting firm RAD-INFO (News - Alert) Inc. (www.rad-info.net).
Edited by Alicia Young