Channel sales present a challenge for several industries, but it’s a particular concern for manufacturers. For instance, the added layer between your organization and your end-user means you have less access to understand their behaviors and needs and track associated KPIs. Additionally, some organizations struggle to clearly define the difference between channel customers and the end-user. Furthermore, some manufacturers fail to nurture relationships with indirect channel sellers to provide the skills and resources they need to effectively sell your solution.
To effectively leverage distributors and resellers, you must clearly define your channels, enable your channel sellers, find the right sellers and partners and minimize channel conflict. Let’s explore the key success factors for manufacturers to maximize sales through indirect channels.
Clearly Define Your Channels
While indirect channel partners purchase your product from you, they are not your product’s end-user, a distinction some manufacturers struggle to understand in relationship management. To maximize sales through indirect channels, you must clearly define a value chain from distributors to your end-user. Some manufacturers label their indirect sellers as customers, leading them to lose sight of the end-user’s challenges and how your product addresses them. The end-user must be your main focus during the product planning process, service agreements and when you train indirect sellers how to address the needs of each of their buying influences.
Enable Indirect Channels
Your indirect channel partners likely sell multiple product lines. Consequently, once you have defined your channels, you must enable your distributors and resellers to sell more of your product by leveraging your expertise in the industry, your brand authority as the manufacturer and your access to information about the end-user. By empowering your indirect sellers to thoroughly understand these aspects of channel sales, it’s more likely that their confidence in your product and your ability to support them will lead them to choose you over a competitor. These details go beyond spec sheets and technical product benefits. Ideally, they address the unique pain points of each buying influence indirect sellers are likely to encounter.
Additionally, your channel managers are an important factor in nurturing the relationship with indirect channel sellers. As a sales leader, you must coach your channel managers on how to build credibility with them, which could include bringing in an expert to discuss the external forces that impact your product, the supply chain, your sales channels and the end-users. This could be an expert who shares insights about changing government regulations that may impact energy consumption. Then your channel manager can discuss how you altered your product to comply with the new regulations.
Once they have built that credibility, they can leverage it to provide unique insights about specific techniques, playbooks and tailoring messaging to each buying influence. Usually, this requires your channel managers to provide training and coaching to indirect sellers on the challenges facing the end-user, how your solution solves those challenges and how your product meets the end-user’s long-term needs. As the manufacturer, your industry expertise and deep understanding of the end-user allows you to provide these insights to your channel partners so they can maximize their success.
Find the Right Sellers
As mentioned above, channel managers and direct sellers both need to build credibility, provide perspective and effectively communicate how your solutions solve the needs of individual buying influences. However, there are different skills required for success in each role beyond the hunter versus farmer mindset.
Channel managers focus more on coaching than selling. Those who engage with indirect sellers need to be more like sales managers, guiding and enabling channel sellers on these techniques:
- Prospect to constantly fill their pipeline
- Nurture relationships to move opportunities through the buyer’s journey
- Identify the different buying influences
- Handle objections
- Negotiate and finalize contracts
The first step to finding the right sellers for this role is to identify and measure seller traits that directly correlate to successful performance in channel sales. Next, you can leverage assessments to find the skills your current indirect sellers lack to focus your coaching in those areas. Additionally, there are certain assessments you can use during the hiring process to find new sellers who have the skills needed to be successful in that role.
Find the Right Partners
Leveraging indirect channels means building a strong partnership to provide end-users solutions that address their needs. Consequently, it’s important to find the right partners to build strong relationships. While distributors have options in terms of what products to sell, many still want to grow their book-of-business with manufacturers and seek opportunities to scale performance together. One way to find the right indirect channel partners is to create a formal partner selection process that requires third-party sellers to meet certain benchmarks to qualify. These guidelines set quality standards for external relationships, ensuring that these channel partners align with your goals.
Once you’ve found the right partner, you must match them with the right channel manager, who will work closely with these indirect sellers, sharing insights and coaching them on specific messaging techniques. Additionally, the channel manager is responsible for proactively identifying potential conflicts and addressing them in advance. For instance, channel managers must stay ahead of potential third party supply chain issues or possible supplier recalls before they become a serious issue that negatively affect the reputation of both companies.
Avoid Channel Conflict
Effective channel management means navigating delicate scenarios around power dynamics, as sometimes a manufacturer and the channel seller they partner with can both be billion dollar companies or they may operate in a vertical with significant consolidation. One key is to keep consistent pricing strategies across all equivalent channels to mitigate pricing wars. Also, you must consider if your indirect sellers experience more success in a certain territory or region. For instance, if one of your indirect channels achieves significant revenue in Europe, you may focus on nurturing them in that market while your direct sellers focus their efforts elsewhere.
Additionally, manufacturers who leverage both direct sellers and indirect channels must navigate potential conflicts regarding overlapping prospects and customers. To ensure these conflicts don’t escalate and complicate your relationship with indirect sellers, you must provide honest and open communication about your direct selling strategies. This also includes training indirect partners on effective strategies that your direct sellers use and how to address the pain points of each buying influence among your end-users.
Many manufacturers choose to leverage indirect channels because of the efficient distribution methods, reduced sales costs and the ability to expand the reach of your business. To maximize sales through distributors and resellers you must clearly define your channels, enable indirect channel distributors, find the right sellers and partners, and avoid conflict. This allows you to leverage the economies of your indirect channels to meet the needs of your end-users.
If you’re struggling with channel management, learn how our Channel Management training helps businesses turn channel strategies into a competitive advantage through aligning team members, identifying areas for improvement and increasing customer satisfaction.