Walk through any marketing, sales, channel management or customer services office and you’ll see the results of how companies strive to get more accomplished with less. From the packed wall calendars of projects and programs to Outlook calendars of sales and channel reps working as hard as they can to keep resellers productive and profitable, there’s definitely a new intensity alive.
Quotas are up and budgets are down, and channel programs are often caught in the middle. Instead of seeing this as an excuse the best companies view it as a crucible that tests their true skills of making channel programs work.
Partnerships: Produce or Be Gone
The days of trading logos and partnerships that don’t produce a dime in revenue are over. In their place, this new intensity of selling and true partnerships is all about getting real results, not pumped up measures of meetings, conference calls or sales calls that don’t deliver results.
The Successful Are Different: They Only Reward Results
Whether it is as simple as a marketing campaign to as complex as a new product introduction, companies getting results today are doing several things differently than the rest.
- Instead of being lulled into a false sense of security, these top performing companies only track metrics that lead to results. One distributor of high-tech electronics has a real-time dashboard of channel sales reps and the percentage of calls that lead to a sale, average sales size, time of call, gross margin contribution (dollars and %), and call frequency of account. This helps channel managers to see trending in profitability throughout the month and they know at any point in time where they are against their quota.
- Embrace competition and nurture it to get the best from your channels. One manufacturer of networking components uses their Partner Intranet site to post the daily results of sales on the hottest-selling products in units (as pricing is confidential across their partner base). This has lead to exceptional levels of competition. Sales reps, being the introverts they are, like to attach their names to the deals that push them ahead of other resellers. This is part of the new intensity that is out there.
- Realizing pricing is the last weapon of choice to win deals but the best one to automate. Tempting as it may be when sales activity hits a wall, dropping price can kill your company. From the simulations I’ve participated in and run for my graduate students in an MBA program I teach in, without exception every semester a team will decide to becoming the low price leader with no investment in lean manufacturing, supply chain or aggressive R&D. They purely go after price. Result: the longest one team last was seven quarters and they were out of business. Instead consider how Epson, Seagate, and others in high tech, and how Putnam Investments, TR Rowe Price and Fidelity manage financial services transactions. Both of these industries rely on price exception management and in the case of Seagate, they have an exceptional special pricing request process. Managing pricing intelligently and aggressively is key to making every channel management dollar count.
- Sales Programs Are the New King of Marketing Spend. Of the manufacturers spoken with including those producing and selling home networking, components and computer systems products, many are diverting their advertising dollars into sales for recruitment, sales effectiveness and sales tools. This is easy to track the ROI of and many manufacturers are using a phased “pay as you go” approach to make sure the dollars invested pay off. Sales is the new king of marketing spend now, and advertising spend is way down as a result.
- Online media and social network spend doubling in many manufacturers. A VP of Channel Programs with a local manufacturer of networking products told me that online media and social networks received a 34% increase in budget while spending on print media was completely cut. He explained that they get more sales leads from Facebook and Twitter and they can track it more effectively than they ever got from print media.
- The catalyst of this new selling intensity in channels is all about doing whatever it takes to save existing customers. When I asked a student of mine, who is a Sales & Marketing VP for a local manufacturer what the top priority was in this area, specifically going after new accounts of saving existing ones, he told me they dedicate nearly 40% of their marketing budget to attracting existing customers to existing products. “It is the heart of our retrench strategy” he said in class last week. Sales get a bonus multiplier for getting an existing customer to source three new product lines, he said.
- Bonuses only get paid when customers are delighted and show it in survey results. One services company that specializes in CRM implementations and outsourcing business process improvement projects only pays their consultants if the customer satisfaction surveys come back with a 95% score or higher. With work done in New York, Los Angeles, Atlanta, Bangalore, and Chennai this metric has made global collaboration work. It has brought intensity to the process of making the customers’ problems their own. The result is that this small outsourcer who has revenues just over $100 million has over 70 referenceable clients.
Bottom line: Making every dollar count in your channel management strategies has to be anchored in nothing but results, and there must be an intensity to achieve despite higher quotas and shrinking budgets. Looking at these constraints as a crucible and not a crutch pervades those companies getting to their channel selling goals.
Flickr attribution: http://www.flickr.com/photos/79434558@N00/751221191/