As this year winds down and sales executives begin the postmortem of 2016, the two questions everyone will ask are:
1. Did we achieve our targets this year or not?
2. What can we do better in 2017?
With the same reliability as daffodils, the perennial ideas and strategies will be suggested: “let’s get a new sales tool,” “let’s hire more sales people,” “we need better leads from marketing,” “we need a new sales technique.” While these are all good topics to address and will likely yield incremental improvements, in the end it is likely that none will be the game changer you were hoping for.
Waiting in suspense for me to unveil the solution? The magic bullet that you hadn’t thought of? The truth is, you probably have thought of it because it’s not fundamentally new. It’s the Indirect Channel.
But not your parents’ Indirect Channel – I’m talking about the Indirect Channel of 2017 – the Indirect Channel on steroids.
Let see if I can predict some of your reservations:
Is there really that much upside to channel sales vs. direct sales?
Accenture estimates that the indirect channel drives 80% of business revenue. Over the last decade, the indirect channel has been the primary driver of sales growth. We have clients that have seen an almost immediate impact on their revenue with the deployment of a modern, contemporary and well-structured channel program. Analyst group Frost & Sullivan estimates that businesses see an average increase of $9m in channel revenue in the first year after deploying a best-in-class Partner Portal.
Building a direct team is prohibitive to scaling your business. It’s expensive and time intensive, with a substantial lag between effort and effect. If you didn’t start building your team for Q1 2017 growth in October of this year, you are already behind the game. The indirect channel provides a plug and play scenario with an immediate impact on sales, once you have your program up and running.
I’m not sure where to begin…
It’s not as hard as you may think. With the recent developments in PRM software (Partner Relationship Management), you can be ready to support a channel program in as few as 30 days. Channel Tech has come a long way in the last few years. PRM now represents to the channel what CRM represents to direct sales. Gartner has recently released research supporting PRM’s rapid growth and adoption among industry leaders.
What does this mean for my sales headcount?
Obviously, this is a case by case scenario, but with a world-class PRM and an excellent Sales Director, the indirect sales model can be much less costly than trying to build a direct team. Forrester predicts that, on average, businesses will see a $10 reduction in labor costs for every $1 invested in a world-class PRM. Where else do you see that return?
As you plan your 2017 sales goals, consider investing in or employing an indirect channel. If you want any tips or advice on the best place to start, one of our channel experts would be happy to offer advice on best practices and offer some expert tips. You can reach one of them here: https://www.impartner.com/contact/.