Going Indirect—Kickstarting a Channel Sales Program
One of the first hurdles founders cross when scaling their sales motion is reaching customers outside of their company’s direct network. This is where a partner program can be a salesforce multiplier.
Adopting indirect sales does not mean giving up on direct relationships with customers. Instead, the best-performing companies adopt a hybrid model in which account executives and partner managers collaborate to maximize their company’s share of the wallet. This can only be reached through a well-built channel program that addresses the complexities that business partners bring to an existing sales organization. This article dives into the intricacies of kickstarting and scaling channel sales.
Why Channel Sales?
Selling directly to a customer without the help of a partner gives you full control of the customer relationship. However, working with partners can be valuable for startups to expand their reach while assuring a mutually beneficial relationship.
Claroty, one of our portfolio companies that focuses on securing cyber-physical systems, utilizes this approach. As CJ Radford, Global VP for Channel Sales and Alliances, explains: “As a startup, there are challenges getting into well-known companies because you’re an unknown quantity. One of the major benefits of selling with partners is because they’ve built long-term relationships with these customers and have become trusted advisors.”
He sees partners as an extension of their team, supporting Claroty’s market share growth, while earning their own share of wallet within end-customers. To assure engagement, “making it easy to partner with you is key”, says CJ. “Your channel program needs to be structured in a way that supports partners in the things they do best for vendors: fulfill transactions, bring in new business, advance the sales cycle, and provide post-sales support.”
Find the Right Partners
Specialists deeply understand a smaller set of products sold to a smaller market of buyers. These are the partners you want to work with—those who know your ideal customer profile and buying persona and have connections you don’t have. Engage these partners early in your go-to-market strategy because their enablement will be a shorter learning curve as opposed to the heavy training investment a generalist requires.
A best practice for identifying these potential relationships is to ask all of your direct customers what partners they like doing business with. This helps you create a hierarchy in your list of potential partners to target where you already have evidence of a successful partnership.
For Claroty, this meant focusing early efforts on operational technology specialists and technical sales engineers within the partner community, who supported their sales team with opportunities. In their experience, it is imperative to earn mindshare with the sales engineers because they are the closest advisors to sales and drive preference for solutions.
Set Your Partners Up for Success
To resell your product well, your partner needs to learn a new sales motion. At mature organizations, sophisticated enablement programs and proctored certification exams are codified best practices (e.g. Salesforce implementation certified). But a resource-constrained startup will need to use a mix of broadcast (a speaking slot at their Sales Kickoff, or a training in a sales pipeline meeting) and narrowcast (joining a sales call, 1:1 account reviews) enablement tactics.
A simple enablement training program to make your partner successful is the Level 1, 2, and 3 training framework.
Level 1: They simply are aware of the vocabulary needed to describe the new product.
Level 2: They can knowledgeably talk about the new product for 10 minutes.
Level 3: They are the true subject matter expert who can answer tough questions about how the product works.
If everyone in the partner organization is at Level 1, some are at Level 2, and one is at Level 3 in each region, you’ll have enabled a self-sufficient partner.
Get Your Partners to Sell
Even after enabling a partner, getting them to operate at your desired pace can present a challenge. Partners typically have a roster of other products from different vendors already generating revenue, with a salesforce that’s well-acquainted and comfortable with these established offerings. Venturing into the domain of a new, albeit promising, product from a startup may not immediately appeal to them.
So, how can you motivate a partner to sell your product? Many of Next47’s portfolio companies have navigated this by extending leads to new partners, collaboratively working through those leads, and demonstrating demand for their products. This approach not only showcases potential success but also future commissions. Rather than dictate to partners how to sell your solution, understand how they sell and how to sell together.
Some companies have gone the extra mile by dedicating a sales rep to work with partners. The rep conducts account mapping exercises and provides partners with ready-to-execute campaigns to target joint prospects or upsell existing customers.
Regardless of the structure, a significant investment of time and energy is required to elicit a commitment from your partner, aligning both messaging and the sales motion.
Manage Channel Conflict
Conflict creates interest. When you close a deal directly with one of your partner’s customers, this can spur your channel partner to action.
The opposite is also true. When your partner closes a deal with one of your direct customers, you can use that news to create a sense of urgency among your team. Lighting a fire under a partner, or your direct sales team, is easy when you tell them someone else beat them to the punch.
However, as the Channel Program evolves, companies should think carefully about their processes and design them with cooperation in mind, especially when it comes to compensation. Deal registration processes and Partner Relationship Management solutions can be helpful for partner alignment.
Conclusion: Harness Partnerships for Growth
After committing to channel sales, take the time to transition with your partners thoughtfully. Your investors can be trusted thought partners and can connect you with founders who have been through this before. Taking these measures will help you choose the right partners and establish best practices.
At the end of the process, your company will have a strong ecosystem that augments your sales team and unlocks new levels of efficiency, reach, and profitability.