In a recent blog interview, Braham Shnider from Channel Enablers makes some good points as to why running the channel is harder than direct selling —and from my own experience I couldn’t agree more. 

I’ve personally run direct sales, channel sales, and combinations of the two. With direct sales, I controlled the resources and could hire, fire, promote and most importantly, compensate as needed.  In addition, I had real-time data on how we were performing in every region and could make timely adjustments as needed (add coverage, change resources, redeploy, etc.).  Finally, I could put significant pressure on the reps to deliver at quarter-end.  Unfortunately, the channel just didn’t share the same sense of urgency.

But running the channel doesn’t have to be more difficult. As more timely and accurate data has become available, channel managers are now finding they can address some of the same challenges faced by their direct sales peers.  

Performance-based incentive programs are one of the keys to establishing more of a “direct sales” driven approach.  Another approach is peer rankings.  Ranking partners based on their performance vs. an unnamed peer group is a powerful motivator—just as comparing a sales reps performance to their peers is critical to getting the most out of a sales team.  Timely scorecards, containing metrics such as actual performance vs. peer averages and year-over-year growth vs. peers, used as part of a periodic partner performance review can significantly influence performance—just as performance ranking does for direct sales.

 Future posts will discuss more examples of direct-selling best practices being applied to the channel.

In a recent interview, Meaghan Kelly, Vice President of Channel Strategy and SMB at HP, provided a great perspective about the sheer magnitude of the SMB marketplace and why the channel is the only way to reach it: 

“Globally 95 percent of all private companies have fewer than 500 employees. Well over half of the world’s employed individuals work in the SMB sector.  In the U.S. alone, there are 12.5 million small businesses and most of them don’t have the appropriate IT knowledge, expertise or infrastructure and are looking at trusted advisors to help manage their IT… For HP products in the U.S., SMBs represent a $57 billion opportunity.  We have 20 percent market share and want to get a big slice of the other 80 percent.”

We believe the only way to find these “trusted advisors” to small business—the VARs who truly reach the SMB market—is to understand your channel partners’ actual sales history all the way through to the end-customer.  Instead of relying on what the channel partner says they do, look at what their sales history tells you. Find the partners who have been successful reaching the other 95 percent instead of recruiting the partners who are selling to the same 5 percent that your direct sales team is selling to.  You can only do this by collecting POS data that includes the end-customer data and then processing it to identify every customer that was sold to— not just the clients that are on your strategic account list.