DRIVING HIGHER CHANNEL PERFORMANCE:

BE INTENTIONAL

In the 2019 World-Class Sales Practices Study conducted by CSO Insights (the independent research division of Miller Heiman Group), more than two-thirds (69.4%) of participants said they leverage a third-party channel to drive revenue. Many sales leaders see adding a third-party channel as a way to improve sales performance without the overhead of hiring, onboarding and developing additional in-house sales staff. However, almost half of the participants of the World-Class Sales Practices Study said their partner programs failed to meet expectations.

There are many reasons why organizations choose to go to market through a channel: to increase revenues, scale more rapidly, fill market and territory gaps, create bundled products/services, etc. With so many different goals, there are many ways to measure channel program success.

Program Management

The study focused to determine whether there was any correlation between perception of program success and three key performance metrics: channel revenue attainment, partner quota attainment and depth of partner relationships. Here, we uncovered two key findings.

1.      Respondents from organizations that met or exceeded partner program goals reported higher channel revenue attainment as well as a greater percentage of partners making goal.

2.      Respondents from organizations with successful partner programs also reported deeper relationships with their channel partners than those with less successful programs.

More than half of these respondents said their channel partners saw them as Consultants, Strategic Contributors, or Trusted Partners. In contrast, organizations with channel programs that fell short of expectations were more likely to be seen as Preferred Vendors or Approved Suppliers.

Partner programs provide a structured way to manage channel performance while also supporting partners. Program management practices focus on many elements, such as partner selection, marketing, incentive programs, performance management and accreditation. In this study, we looked at four in particular

Program Management Practices:

·        We effectively communicate requirements and success metrics to partners.

·        We effectively use technology to share information on customers and prospects.

·        We select an appropriate number of qualified partners to succeed in each market.

·        Our incentive programs effectively drive desired partner behaviors and investments.

As per study the participants who were effectively communicating requirements and success metrics to partners, almost two-thirds indicated they could do better. The 35% that said they did this well saw a 19-percentage-point improvement in partner performance compared to those who did not do this well.

Organizations that successfully used technology with partners scored 24 percentage points higher in “partners making goal” than those that did not.

Channel Management

Channel management focuses on how effective a company’s channel sales organization is at managing partner relationships and performance.

Channel Management Practices:

·        Our channel managers develop and execute effective partnership plans.

·        Our channel managers effectively analyze territories to identify coverage gaps.

·        Our channel managers effectively influence partners to invest in activities that drive results.

·        Our channel managers conduct effective business conversations with our partners’ executives.

Partner plans, like strategic account plans, clearly document the what and how of goal achievement. Organizations that were effective at partnership planning, “partners achieving goal” rose by 20 percentage points, and their average channel revenue attainment went up by nine percentage points.

Partner planning is simply a sales methodology that focuses on partners, so formalizing partner planning and training channel managers on how to leverage partner planning effectively can lead to higher channel performance.

Enablement and Support

Channel partners require support resources (e.g., channel managers, marketing, finance, legal and IT). Less than one-quarter of study respondents said they support and enable either their internal or external channel personnel effectively.

Enablement and Support Practices:

·        Our enablement programs provide channel managers with the content, coaching and training to be successful.

·        Our enablement programs provide partners with the content, coaching and training to be successful.

·        Our organization provides sufficient support to the indirect channel to achieve its goals.

·        We have effective, formal training for the resources who work with the channel.

When Channel Partners enable their channel managers effectively with content, training and coaching, the percentage of partners making goal rose 17 percentage points.

Partner Enablement

Respondents who said their organizations enabled partners effectively saw a 20-percentage-point gain, on average, in the percent of partners making goal. As channel managers are the sales managers for your channel, expecting them to design, create and deliver all of the enablement services required for channel partner success.

Despite the challenges associated with channel sales, selling through channels remains a viable go-to-market route that can help organizations reach their goals. However, as our research shows, a poorly planned or executed channel strategy program can be a drag on overall channel performance.