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July 24, 2016

Why Channel Sales Might Be Hazardous To Your Business

Sam Lloyd

Channel Sales Dangers

Don’t rely on channel partners to do all the work

Education and training are a must

Be strategic and avoid conflicts between sales channels

Hello friends, your favorite lead generation firm Klicker here. We got a question for you. What is a sales channel? The sales channel definition is simple – it is a way of bringing products to your target market.  The common sales channel examples include retail, e-commerce, franchising, direct sales, and channel sales. These are, basically, the methods that are being used to push the product to the market. This article is intended to explore channel sales and implications you might experience when building a channel.

So what is channel sales? Channel sales model means selling your product or service through an outside partner. When there is a third party involved the general expectation is that the sales process will be slower. This is not always the case. Channel sales can help you fuel rapid business growth and optimize costs. By outsourcing sales operations you can get access to additional resources and expand your contact database. But there are also some downsides to channel sales that can’t be ignored:

You have to build your own sales funnel.

Even though you’re handing over the whole sales process to someone else, it doesn’t mean that you can stop working. You need to show and teach partners how to sell your product. The easiest way to do so is to first sell your product through direct sales model. Once you understand your target market and adjust your sales funnel according to received feedback, you can explain and teach the sales process to your outside partners.

It takes time.

Building productive relationships with channel partners will require some patience. Resellers have many products and services to sell and some of them bring more cash than others. This explains why you might not see much progress at the beginning – your partners will simply be more inclined to sell other, established and revenue generating, products. You will have to convince them to shift focus to your product and make them believe that if they invest more time now they can reap greater benefits later.

You still have to put in the hours.

With so many products and services to sell, resellers always choose the easiest option, and, unfortunately, creating demand for your product is not one of them. More often than not, your channel partner would choose to sell products that are already in demand so that they can minimize time needed for sale. Be ready to provide them with prospects and even send the hot leads their way.

You have to take on a mentor role.

While resellers are usually skilled at selling, it does not mean that they know all the specifics of selling your product. Educating them on the features, benefits and handling objections will become part of your job. You will also need to produce all the training materials and schedule time for one-on-one training to onboard new reseller’s team members.

You can’t let go of control.

Not only resellers don’t do marketing well, but they can actually damage your brand’s image. To avoid any brand tampering, you will have to create all the marketing material for your channel partners and monitor the usage. Ideally, you would want resellers to conduct their own promotional activities such as webinars, events and social media posts using provided brand materials.

You have to commit.

Once you start selling through channel partners you have to stop direct sales, due to a serious conflict that may arise now that your partner sees you as a competitor. Competition is not something resellers take lightly and they can either refuse to sell your product or switch attention to more loyal partners. In order to take advantage of channel sales method, you have to give up the temptation to make direct sales and embrace the long term vision of gaining visibility through your partner’s network.

You have to hire the right people.

Transitioning from direct sales to channel sales is not an easy process. Direct sales people usually have a hard time doing channel sales. This is due to the fact that they have to switch between controlling and results driven role to more of a support and training role. You need to hire people who understand the long term effects of channel sales and are able to commit to building channels sales model.

You don’t have much choice.

Some channels seem to be made just for you – they sell similar products to your target buyers. However, if you have an innovative product it can be hard to find a channel that suits your needs and creating a new one is almost impossible due to the time and cost constrains. In the end, if you are start up trying to sell an innovative product, direct sales might be your only option.

By this point, you might be wondering: so what are channel sales advantages? Channel sales business models are a great way to build a business. They bring increased productivity and extended the geographical reach of your business. However, when building a channel business, the definition of goals and priorities is the key to channel success. You have to take a moment to think about your product, your marketing strategy, and available resources and see if channel sales model really fits your business.

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