There are core challenges common to all companies that sell through two tier distribution. While there are many, the four below are some of the toughest to overcome.
Scalable and Effective Management of a Partner Network
It is very difficult to recruit, develop and maintain a good relationship with a large partner network. Technology is a must to cost-effectively get your partners the tools necessary to sell, service and support your products. Automation and on demand access to resources are key to scalability and cost-effective management.
Developing a Relationship with End Users
If you sell through the channel, it is very difficult to find out who your customers are. This gets more difficult as products move down the cost and complexity curve (think mainframes vs. mice). However, you must find a way to develop a relationship to effectively up-sell, resell and retain these customers. Moreover, you have to do this in a way that supports and complements the relationship the partner has with the end user. If not, you risk losing partners and many future customers in the process.
Staying Top of Mind with Partners
Partners rarely, if ever, build a business around a single product. How do you find ways to keep your solutions top of mind with your partner network? If you are a large company, you can probably spend your way out of this problem. If you are not, you need to get much more creative. Having effective communication with partners, motivating them with spiffs and providing better sales tools keeps your company and products on their preferred recommendation list.
Preventing Channel Conflict
It is critical when working with partners that you develop processes to prevent or at least minimize channel conflict. Conflict can exist between partners or between different segments of partners like VARs, OEMs and direct marketers. It can also exist where your company has both a partner network and a direct sales team.
Have you experienced any of these core issues in your channel organization, and how have you dealt with them? What are some of your other core issues in selling through the channel?