The sales channel is arguably the most important category of influencers
after peer customers. After all, your sales channel partners are the ones
that are talking to your customers and (you hope) selling your products.
The reality is that sales channel management is done badly. Although
there are several exemplary instances, typically our experience tell us that
most firms have a hard time in optimising their channel partners. Even
firms like Microsoft, which derives nearly all of its sales through its indirect
channel, have a remarkably patchy delivery record.
A leading European telecoms company was recently complaining to us
about the poor execution it experiencedwithin its channel partners. Across
13 European countries it numbered 700 separate partner firms, ranging
from top-tier consulting firms to one-man-band reseller agents.What struck
us most was not the ridiculously high number of partners but that the telco
seemed surprised that its approach wasn’t working. The assumption had
been that the more partners it had the more services it would sell.
Partnerships are a clear case where ‘less is more’ applies. You cannot
reasonably manage this number of partner organisations and expect
them all to deliver high returns, without serious investment in management.
For one thing, the chance that one partner’s territory conflicts
with another’s was not only likely, it was all but guaranteed. While some
overlap is inevitable, even desirable, this degree of clash proved counterproductive.
We know firms that don’t know how many partner organisations they
have, because the structure of the channel is too complex, with distributors
selling to intermediaries, who then sell on to smaller firms.
They lose track of who is selling to whom, even though they have licence
agreements in place that should stop the practice of selling on. The
channel operates within a law unto itself. In this respect, the sales channel
is not unlike peer consumers, in that suppliers can often lose control of the
market messages, and thus lose visibility of the sales process.
There are some endemic issues with selling through channel partners:
1. Sales channel partnerships are typically non-exclusive. This means that
you are fighting with other suppliers to gain attention from the partner.
You are in competition with your partner’s other suppliers even before
you get to market.
2. Suppliers and partners are rarely evenly matched in size or importance.
You may think it’s great to have Accenture as a partner, but if you are
regarded as a small-time player with a niche offering, they will bring you
into a deal at their convenience only. Conversely, if you are a major
player you can largely dictate the terms of your partnerships, because
you know the partners’ customers want to buy your products or
services. Understanding who holds the dominant status is critical in
making partnerships work.
3. Partners often see you as a tactical solution. Because you are nonexclusive,
and especially if you are the subservient party, you’ll often
be regarded as a nice-to-have. It often makes sense to focus on partnerships
where size and importance (to the market) are close together.
4. When partnerships are unbalanced you’ll find that your target markets
may be out of kilter. We’ve had clients whose solution is aimed at midtier
firms yet proudly proclaim partnerships with top-tier consultants.
They sold very little. The reverse is also true: high-end goods sold
through commodity channels undermines the value perception of the
product. That’s why Calvin Klein doesn’t want its jeans sold in Tesco.
The best partnerships are those where the parties are more-or-less equal
in stature, and that there is a strategic benefit in the relationship for both
players. Neither party wants to be a nice-to-have player.
How to influence the channel
Margin isn’t it! If you have to discount you haven’t demonstrated the value,
or your product isn’t appropriate to be sold via those channels.
Good ways to influence partner organisations are:
& Make sure your partner is aiming at the same market as you are. The
most common mistake we see is the mismatch between suppliers’ core
markets and that of their partners.
& Require your partners to make an investment in you. If partners put skin
in the game they’re more likely to execute on the partnership. Training
is the obvious investment to promote, but it also includes co-marketing
material and joint proposition development.
& Position your partners as influencers – promote their solutions, competencies
and customers in your own marketing collateral.
& Market your partners into your existing clients. This is you putting skin
in the game. If you’re willing to share your customers then the partner
is more likely to reciprocate. Note that if you can’t easily sell your
partner in to your customers then maybe your offerings don’t fit
together so well.
& Get your partners networked with other influencers in your market.
You’ll have to identify the appropriate person within the partner organisation,
someone that has the gravitas to network successfully in the
influencer community.
& Make sure your success is aligned with your partner’s. If they are
successful it should mean that you are. And the converse is also true.
Competitors as influencers One of the biggest sources of influence on your prospects are your
competitors. Many people react to this news with apathy. They think it’s
pointless to know this information, because they can’t see a way to
influence their competitors. We say, think again. There are at least three
ways you can influence your competitors, and probably more, but keep
things ethical. There’s no excuse for underhand tactics.
Talk to your competitors
The first thing you should do to influence competitors is talk to them. This
may seem a strange approach but it makes perfect sense. Talking to
competitors gives you a chance to discuss general market trends, find
out what the competitor culture is like and to network in the industry. You
may find that you are not competitors at all, or at least not on all fronts.
There may be partnership or referral arrangements that are possible.
One subject always on the agenda when talking to competitors is that of
your mutual competitors. My enemy’s enemy is my friend, and all that. You
can share insight and stories, and swap tips on how to deal with others’
strengths and capabilities.
Most of the top CEOs in an industry meet each other at least once a year,
either privately or at an industry event. What we’re suggesting is that this
practice cascades down the organisational structure. There are plenty of
opportunities to make contact with competitors, at trade shows, media
events, or wherever. It’s hopefully unnecessary to say, but just in case, we
would never encourage gloating or bad-mouthing competitors, or any
such nonsense. Always be professional – and legal – no price fixing or
such things.
Be talked about by your competitors
The second thing you can do to influence competitors is to talk about
them, and to get them to talk about you. As Oscar Wilde said, the only thing
worse than being talked about is not being talked about.
How do you ensure that your competitors talk about you? The answer is
that you get them to worry about you. Remember the rule of influence:
influencers don’t care about you or your products. They care about their
own agenda. This is just as true for competitors as for any other type of
influencer. When you carry messages to prospect customers you’ll talk
about what your product can do for them. But when talking to, or about,
competitors you must change the message. Don’t talk about features and
functions of your product, or pricing or subjects that you’d discuss with
prospects.
The things that will worry competitors include (but are in no way
limited to):
& Your percentage growth year-on-year
& Your expanding client list
& The fact you’ve been commissioned to write a book
& Invitations to speaking engagements
& Awards and prizes
& Quotes in influential journals and media
Pick three, but only three, things that you think would worry a
competitor. In fact, anything that gets them talking about you in a
positive sense (and we mean positive for you, negative for the competitor).
Stuck for things to talk about? What would worry you if you
heard them about your competitors? Use these things as a starting
point.
Now, how do you measure how worried your competitors are? A
powerful indicator of your influence in the market is what your competitors
say about you. You can find this information out by asking your
prospects, or by asking influencers. A key question that influencers like
to ask is, who are your primary competitors? Do your competitors mention
you? What do they say about you?
You want your competitors to talk about you, to acknowledge you as a
competitor. Why? Simply, it acknowledges you as a credible player. Don’t
worry that a competitor will rubbish you in front of a prospect or influencer.
It is generally accepted as poor form and reflects badly on the
detractor.
We’ve also noticed that competitors that are worried about one particular
player start to mirror the language that they use. You’ll see this in
marketing literature, where one company introduces a new concept or
terminology. They may even start blogging on the subject that you introduce.
This is a sign that you’ve got them worried.
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