Cloud computing has been perhaps the greatest catalyst behind companies’ efforts to rapidly scale and move into the digital era. Cloud computing has enabled this transition by spurring an exponential increase in the number of channel partners successfully reselling your products. Although this means greater market reach, many partners lack the resources or incentive structure to report back timely and precise information. As a result, sales executives often have zero visibility into channel partner activity beyond vague reports tallying quarterly sales sums. Armed with little beyond a bare minimum of channel information, it’s nearly impossible for executives to make intelligent decisions about their sales strategy.
The fundamental problem stems from the fact that your company isn’t the only one working with a given channel sales partner and so you can’t issue directives like you would to your own team. Instead, sales leaders coax partners to follow sales strategy and share information by offering commissions and other incentives. However, a lack of channel data makes these indirect efforts difficult to track. It is important that companies solve this problem of channel blindness, considering indirect sales account for a large part of most global businesses’ revenue.
So, how do companies obtain more transparent channel sales data and boost sales performance – two notoriously complex objectives? There is no single holy grail that will help achieve these goals, but following these best practices will equip companies with a much better view of their channel data:
Implement Stronger Channel Data Management (CDM) Processes
Globally, channel partners hold an estimated $1.5 trillion worth of unsold products at any given time. This is an enormous opportunity for sales teams. Acquiring timely, actionable channel data can help sales leaders uncover new ways to boost product sales, translating into hundreds of millions of dollars in additional revenue.
Understanding exactly how, when, where, why and to whom products are sold via indirect sales channels has become a crucial initiative for companies that lack visibility into channel activity. It’s in sales leaders’ best interests to adopt strong CDM processes: companies that do so typically experience a 5 to 10 percent increase in total sales.
Align Strategies to Unlock Opportunities
Timely, decision-grade data from the channel – down to point-of-sale (POS) info – enables companies to evaluate partners by detailed objective benchmarks, such as meeting a certain sales volume over the last six weeks and exceeding volume targets in at least four of those six weeks.
Most channel sales teams already divide their lists of partners into tiers. Sales leaders often dole out rewards to these partners based on the tier to which they belong. However, not all do this accurately and consistently. With more visibility into channel data, however, sales leaders can better align marketing strategies and sales goals with incentive payouts, and then monitor their sales team’s execution against those plans in real time.
Once companies identify key resellers, they can begin to implement programs to motivate partners to cross-sell less popular products. Benchmarking and comparing one partner’s sales data with competitors’ data can reveal additional opportunities for making sales.
Automate Incentive Processes to Lower Costs, Reduce Payment Issues
Cash bonuses are the great equalizer when it comes to sales partner motivation. How well companies are able implement sales credit and commissioning processes will strongly impact their partner programs. But today, many companies rely too heavily on error-prone manual processes. Rather than rely on manual data entry, channel sales organizations should focus on using accurate POS and inventory data from their CDM system to automate payouts. Not only does switching to more automated systems accelerate payments by facilitating claimless processing, but it also reduces the administrative costs of the incentive programs, as well as helping bottom lines by eliminating erroneous or fraudulent claims.
Utilize Rich Customer Data to Improve Lead Generation
Many companies create tailored programs to target specific customer segments based on metrics they’d like to hit. To better achieve those goals, sales teams must identify the segments partners are selling to and effectively leverage that data. Information about individual buyers and resellers can help sales teams identify and raise awareness about strategic customer market segments. Tapping layered sales data also helps create more leads for sales teams, as well as uncover new up-selling and cross-selling opportunities for existing customers.
Improve Conversion Rates and Speed Up Sales Cycles
Effective CDM strategies can also allow sales organizations to focus on new reseller partners, as well as offer early warning signs when partners start to become ineffective. To do this, sales leaders need to set parameters. When certain reseller metrics cross a given threshold, companies can decide if those figures are strong enough to warrant inclusion in a partner program. Or, if those numbers fall below a given threshold, companies can ensure their teams take proper corrective action before a temporary drop in performance becomes irreversible.
CDM strategies can be powerful when they use real-time channel data to identify deals earlier in the sales process. Equipped with that data, sales teams can improve conversion rates by stepping in to offer extra help, such as additional support or special pricing. Real-time channel data, in an effective CDM system, can also speed up sales cycles by supporting companies as they discover potentially impactful leads and route them to the right channel partner, thereby giving them the highest probability to turn potential deals into revenue in the quickest timeframe.
The Holy Grail of Sales Lies in Accurate, Timely Data
Late and inaccurate data from channel partners has left sales leaders in the dark for too long. Because trillions of dollars flow in through indirect sales, channel partners are a critical part of the sales funnel, and companies can no longer afford to turn a blind eye. However, sales organizations leave an enormous amount of money on the table if they chalk this up as a lost cause. With new CDM solutions, sales teams can achieve the visibility they need to uncover new opportunities, react intelligently and sell more products.
Steve LaPedis is vice president of marketing at Zyme, a leader in the emerging channel data management (CDM) space.
