4 Ways to Recognize and Avoid an Underperforming Channel Partner Program

Inherent in a distributor sales force model is a lack of communication and understanding between separate entities on the status of their leads and sales pipelines.

Manufacturers send leads to their distributors, but rarely get feedback on what happens with those leads, the opportunities they represent, forecasted sales, or the pipeline as a whole.

In fact, our manufacturer clients report that they only hear back on 10 to 20 percent of their leads. Was the lead contacted by the distributor? How long did it take? Did an opportunity or sale result? These are questions that often go unanswered. That’s largely because manufacturers don’t have an effective process or the right tools in place to facilitate two-way communication.

It’s not something to ignore.

Up to 80 percent of the leads passed to sales fall through the cracks, according to the American Marketing Association. Depending on the product, that is thousands to millions of dollars in lost sales each week. Additionally, Gartner Research reports that 43 percent of sales go to the company that follows up first on the lead. So it’s imperative that distributors know which leads they’ve received, and then act quickly, or both parties risk losing even more.

How do you know if your channel business is leaving money on the table? Here are the 4 most common red flags, and steps you can take to improve channel performance.

1. Leads are not contacted fast enough

Sales managers know that speed-to-contact rates are a proven performance indicator. Faster speed-to-contact rates lead to higher conversion, which is why most companies should aim to speed up the lead capture and distribution process. Now, more than ever, prospects demand a quick response.

The problem that channel sellers face is the disconnect (and often slowdown) between their lead capture process, which may include reformatting or lead qualification, and the time it takes for the appropriate distributor to receive the lead and follow-up.

If speed-to-contact is a concern for your organization, be intentional about how you share leads and how those leads are received and organized. The best case scenario is an integrated system that allows you to quickly and easily capture and share leads so that your partners have the opportunity to follow-up with prospects faster.

2. Leads are poorly qualified

One manufacturer told me recently that the No. 1 complaint he hears from outside sales reps is lead quality. “For every 100 leads we receive, only a handful are worth following up,” he recounted.

If your incoming sales leads are missing critical contact details as well as valuable market details, such as SIC code/description, company size, website, address, etc., your distributors are either wasting valuable time trying to collect these details or are not as prepared as they should be with a potential customer.   

Lead scoring should give distributors the information they need to personalize their sales pitch to customers. The scores also determine which nurture campaigns to place your leads in and the best time for channel partners to engage with those leads. And the more you are able to prioritize quality leads over cold leads, the faster you and your channel partners will see conversion rates increase.

3. Your pipeline is fuzzy

Does your current system give you an accurate, real-time picture of your sales pipeline, as well as future sales projections? What’s your cost of customer acquisition, and your conversation rates by distributor? It’s difficult to measure, plan and improve sales without tools that deliver this kind of business-critical information.

The good news is that you don’t need to spend more on generating new leads. Rather, focus on maximizing the revenue potential that already exists among your current leads.

A software program that automates the lead capture and distribution process can help manufacturers clearly understand what is happening with their leads. Manufacturers can confirm that leads are being followed up by distributors and identify how quickly that happens. The lead generator can also see the opportunities and sales projections in the pipeline.

Such information can then inform data-driven decisions that increase revenue, whether it’s promoting a high-performer, offering additional support to a sales rep or determining the most effective leads sources.

4. Distributor engagement is lukewarm

The nature of the relationship between manufacturers and distributors creates a significant engagement hurdle. Manufacturers have tried to solve this problem with CRM (Customer Relationship Management) programs, but CRMs have proven inadequate, if downright un-useful for the channel seller. Why?

Because distributors — who routinely partner with multiple manufacturers — don’t want to learn how to use 20 different systems and keep track of 20 different login details. It’s a huge hassle, so they just don’t use it.

The key to better distributor engagement — and therefore increased productivity — is to simplify the feedback process. Look for software products that eliminate the login process for distributors entirely. Instead, the solution should present the distributor with the data they need via a secure, encrypted Web interface. This allows distributors to quickly and easily provide feedback on leads without the hassle of responding to individual emails or learning several CRMs.

Spotty feedback about sales leads and sporadic communication with distributors has long been the norm for many manufacturers. But given the technology now available, there’s no reason it needs to stay that way. Organizations that address these four problem areas — contact rates, lead quality, pipeline visibility, and distributor engagement — yield worthwhile results, including 20 percent increased revenue and up to 300 percent increased distributor engagement.

 

2018 Channel Survey Results: A Strong Need for Better Channel Engagement

We recently conducted a survey of more than 4,475 manufacturing sales and marketing professionals and the message was clear: They need more engagement and feedback from their channel partners on sales leads.

Here is a key stat that we uncovered: 60% of companies do not get feedback from their channel partners on leads and opportunities. The big question is, as a sales or marketing manager, how are you supposed to make any data-driven decisions when you don’t even know what is happening with leads or channel partners?

The good news is, 70% of companies believe that with the right process and software to communicate and collaborate with channel partners on leads and opportunities that they can increase revenue by up to 20%.

That’s really exciting!

Here is an info-graphic highlighting some of the challenges and the solutions.

Here’s What Effective Channel Engagement Looks Like

Sales managers understand that channel partner engagement is the lifeblood of successful indirect sales. The more effective your channel partner engagement program, the easier it is for your distributors to do their job of selling and servicing your products every day.

Market fluctuations and rapidly changing customer needs, however, have created an increasingly challenging environment for manufacturers. Meeting these challenges requires strong partner relationships. A company with disengaged channel partners will be poorly positioned to outmaneuver their competitors. Open dialogue and strong partnerships foster the collaboration and innovation necessary for success. That’s why effective communication is such an important element of channel management.

But the nature of the indirect sales model — you may be doing business with resellers around the globe — complicates this effort. Beyond geography, partners and resellers typically work with multiple suppliers making it even more important that your engagement plan stands out and builds partner loyalty.

Once established, a good engagement strategy has numerous benefits, including:

  • Improved productivity and distribution numbers,
  • Increased sales and commission numbers for dealers,
  • More successful advertising and marketing campaigns, and
  • Improved customer service along the entire channel.

All organizations these days are dealing with an overwhelming amount of information on a regular basis. Whether that information gets to the right person at the right time, without being perceived as burdensome, is the difference between effective channel communication and wasting your time (and theirs).

When creating and executing a partner engagement plan, there are a few key communication tips to keep in mind:

Be timely.  To be effective, communications can’t be burdensome. Communications that are too frequent can get lost in the shuffle or leave the partner feeling overloaded. If the communications are not seen as helpful and supportive, they become useless. Consider adopting mobile-friendly communication tools that provide easy access to relevant information.

Be relevant.  One of the key communication mistakes is caused by sending “blanket” information addressed to the entire sales network. It’s then left to the individual partners and their individual departments to sift through the information, looking for anything relevant to them. To be effective, communications must be contextual.  It should provide contextual information to the channel partner by deal stage, product line, customer type, or geography. The criteria doesn’t matter as much as being able to segment and supply information based on their individual needs.

Strike a balance.  Sending information too early only adds to the overload that your partners may be experiencing. The longer the information sits before it becomes relevant, the greater the chance that it will be forgotten or misplaced. Alternatively, information that is sent too late is useless to your dealers. A careful balancing act is required. The more effective your overall communication strategy, the easier the balancing act becomes.

A distributor lead management software system improves your ability to execute targeted and helpful communications with your channel partners. With a lead management system designed specifically for distributor engagement, channel partners will have instant access to timely, context-based product information at their fingertips. As a result, your channel partners will feel informed, supported, and valued — the critical link to building strong partner engagement.

6 KPIs That Every Channel-Based Business Should Track

Business leaders today rely on data in order to make calculated, smart decisions for their organizations. To stay ahead of the competition and constantly changing business environments, seasonal trends or economic indicators are no longer good enough — particularly with the technology tools available today.

Data is the new currency of the digital age. Whether your company was born a digital native or not, every business needs to empower tracking and analytics systems and processes to ensure you’re meeting customer needs and not leaving money on the table.

Leveraging data provides insights that help you answer a host of key performance questions, which business owners and managers can turn into decisions and actions that can increase revenue.

You can manage what you can’t measure

One of the leading challenges faced by companies that sell through channel partners is pipeline visibility. Tracking and analysis of key performance indicators (KPIs), not to mention marketing effectiveness, is mere guesswork when a considerable chunk of your sales leads are handed off to outside distributors or reps outside the four walls of your business.

And without a clear understanding of key sales performance data and metrics, sales leaders can’t measure what is working and what isn’t working in order to grow their businesses.

You’re essentially throwing money at marketing and demand generation and crossing your fingers that something will stick. Or, you may be relying on past indicators that have already taken place — sales numbers or gross margin, for example. Yes, these are helpful but they won’t give you the complete picture. Regardless if sales are up or down this quarter or year-over-year, you want to be able to answer the questions of why it happened and how.

How to bring visibility to your sales pipeline

The first step to bringing visibility to your sales pipeline is to identify your sales KPIs. These should provide visibility into current sales activity that will impact future productivity. Tracking these indicators now will allow you to identify gaps and make future adjustments. KPIs for channel-based businesses might include:

  • Lead contact rates — How many leads are being contacted versus assigned by distributor
  • Lead contact speed — How long does it take a sales lead to be contacted once it’s assigned or accepted
  • Lead-to-opportunity conversion rates — What percentages of leads convert to opportunities in your pipeline
  • Sales cycle time — How much time does it take for a lead to become a sale
  • Close or conversion rates — What percentage of leads convert to customers by distributor
  • Channel pipeline revenue value — what is the total $ from the opportunities being managed by your channel partners and distributors.

Next, you need to engage with each of your channel partners to collect this data. The best way to do this is through regular, ongoing feedback. If your channel partners have the ability to quickly and easily provide feedback on the status of every lead they are assigned and at every stage of the customer journey, you’ll be ready to analyze your next move with clear, actionable data.

For example, you might discover that the speed-to-contact rate for Distributor A is 24 hours. And since you know that speed matters — faster speed to contact rates lead to higher conversion rates — you can then work with your partner to reduce that rate.

With actionable intel into which partners or regions or processes have room for improvement, you can put a strategy in place to move your business — and your relationship with your distributors and channel partners — in the right direction.

It all starts with putting tools in place to collect and connect all of your data in one spot. With this solid data foundation, you can gather insights, visualizations, and metrics that maximize the potential of every sales lead and support overall revenue growth.

How to Accelerate Speed to Contact and Win More Business

Imagine you want to buy a car on a Saturday. You go to dealership A and the salesperson says he’ll call you in 24 to 48 hours. Meanwhile, you go to dealership B, test drive the car you want, ink the deal, and drive home.  When the salesperson from dealership A gets around to calling you on Monday morning to talk about the car, the opportunity has passed. The difference? A slow response time.

Slow lead response times is one of the challenges faced by manufacturers that sell via a distributor network — both in terms of how much times it takes to sort through and share a qualified lead with the right channel partner, and how much time it takes that channel partner to make initial contact.

And unlike our dealership scenario — in which sales leads and salespeople exist under the same roof — channel sellers have understandable hurdles. Namely, the partner responsible for contacting a sales lead operates in a totally separate time and place.

Because there are more steps in the process, delays happen.

It’s a reoccurring frustration that we hear time and again from manufacturers in the indirect sales space: the time it takes to capture, share and contact leads can drag on for hours or even days.

Too often this time gap turns an opportunity cold before it has a chance to begin.

A Harvard Business Review study of 2,200 American companies found that those who attempted to reach leads within an hour were nearly seven times likelier to have meaningful conversations with decision makers than those who waited 60 minutes or longer.

And the consequences of slow contact times can have a real impact on revenue — since we know that the first company to follow up with the lead more often wins the business.

Therefore, an easy way to maximize the revenue potential of every lead — and to outpace your competitors — is to increase your time-to-contact rates.

Here’s how to add speed to your lead-sharing process:

Step 1: Automate lead capture & distribution

The key to selling with speed — and thus maximizing the revenue potential of every lead — is to automate the lead capture and distribution process. This removes the manual labor that often bottlenecks. Using a software platform with automated lead capture and distribution capabilities, the lead is shared with the appropriate partner instantly. Your channel partner can then make contact within your specified window, when connection and conversion potential is highest.

Step 2: Track. Adjust. Optimize

Do you know the exact time-to-contact rate for every opportunity in your sales pipeline across your distributor network? Without this information, it’s impossible to set expectations or tweak procedures. You’re essentially flying blind — hoping that leads are being contacted quickly, but not really sure where or when it’s happening. By contrast, when the status of every sales lead in your pipeline is clearly visible in real-time, you can not only see if and when the lead was contacted, but you can make adjustments as you go.

For example, you notice a distributor is on average taking four hours to make contact with the sales leads you share, and you want see if a time-to-contact of 60 minutes or less has an impact on conversion rates. With a lead management software platform, you can easily identify, monitor, make adjustments, and track the results.

Maximize sales

Slow contact rates limit your ability to leverage sales leads to their full advantage. But the good news is that by improving on this one simple metric can have significant impact on your revenue stream. No need to increase your marketing budget, or spend more on advertising.

Simply take steps to ensure that your channel partners having access to and are contacting shared leads faster, and before your competition does.

Manufacturers: How to share more valuable leads with your channel partners

In a typical B2B or B2C environment, an internal marketing department provides leads — ideally qualified ones — to its counterpart down the hall in the sales department. It’s well known and certainly well documented that the process of sales and marketing alignment is both a challenge and a great source of opportunity. Just try Googling “sales and marketing alignment.” The result is 1.3 million hits. In general, sales folks complain about lead quality and marketers tender to criticize the sales team for poor follow-up.

According to Marketo, alignment between marketing and sales is potentially today’s largest opportunity for improving business performance. When marketing and sales teams unite, they dramatically improve marketing ROI, sales productivity, and, most importantly, top-line growth.

For manufacturers that work with distribution partners, marketing and sales teams face a greater divide — mainly due to the fact that they are not really on the same team.  And communication between these two separate entities during lead generation, handoff and nurturing processes doesn’t take place under the same roof.

Manufacturers generate the leads and pass them off to distributors. Distributors are then responsible for following up and nurturing the lead through the sales funnel. But because systems and process can vary dramatically from partner to partner — and your distributors likely work with numerous manufacturers, including your competitors — the potential for a lead-sharing disconnect is high.

What’s the current status of the lead? Did follow-up take place? When? Was it a quality lead, or does it need more context?

These are critical questions, and the answers can have a serious financial impact on your bottom line.  

A 2017 study by Aberdeen Group revealed that companies that optimize the sales and marketing relationship grow revenue 32 percent faster over those that don’t.

Here are three important steps you can take now to better align your marketing and sales efforts, and to get the most out of the leads you share with channel partners and distributors.

1. Qualify

Just collecting business cards at trade shows or email addresses from some other source is not enough. Qualifying leads requires contextual information to make the leads more actionable for your distributors. Even adding industry, location, or company size by employees or revenue goes a long way toward ensuring your sales partners have access to context.

2. Organize

Be intentional and methodical about how you share leads and how those leads are received and organized. The best case scenario is an integrated system that allows you to easily share leads, and receive feedback on the quality or urgency of a lead.

3. Adjust

Once you have a system established that allows for sales feedback to be easily created and shared, incorporate that information into both your lead generation program as well as revenue expectations and forecasts.  This closed loop information flow is essential, and allows you to continually tune and improve your lead sharing and qualifying process.

Incorporating these three fact-finding steps into your distributors sales model will result in higher win rates, fewer wasted leads and easier deal closing, as well as a happier relationship with your channel partners.

The good news is that they can be implemented with little disruption and, with the right channel lead management software platform, results can be seen in as little as 30 days.

Distributors: 3 fail-proof strategies to improve sales alignment with manufacturing partners

If you’re a distributor that partners with manufacturers, odds are that a few of them generate and share sales leads with you.

This indirect sales distribution model has numerous benefits for both you and the manufacturer.

You obtain sales leads at little or no marketing expense, and the manufacturer enjoys expanded market share without the time and expense of hiring and training sales force.

Win-win, right?

What should be a symbiotic relationship with a manufacturer, however, can rapidly devolves into something much more chaotic, and much less lucrative.

Distributor-manufacturer relationships frequently struggle to operate within a defined process. Lead qualification criteria, two-way flow of information, and proactive engagement are often woefully lacking, which leads to end-of-quarter sales numbers that are less attractive than they could be.

Common communication-based hurdles like these create serious inefficiencies that can have a serious financial impact. When information for everything from lead status to lead quality isn’t easily seen as it happens by everyone involved — potential sales inevitably fall through the cracks and revenue gets left on the table.

Here are 3 ways to achieve better sales alignment with your manufacturers.

1. Define the process, and then standardize it. Think in terms of both how leads are shared from a single manufacturer as well as how you aggregate and organize them across multiple manufacturers. The key to prioritizing follow-up and tracking progress is a single view of all potential sales leads, regardless of the source.

2.  Determine your shared lead qualification process. Getting this right can be as straightforward as identifying certain industries, roles, or even contact information. Lead qualification can be further improved by enhancing generated leads with additional contextual information like zip code, SIC code, company size and other information that helps you better prioritize and engage the best leads.

3.  Maintain a two-way flow of information. Critical to manufacturer/distributor sales alignment is regular and routine feedback on the quality, status, and other action items on every shared lead. Without this closed-loop process in place, leads more easily enter  no man’s land, where pipeline visibility is nearly impossible.

But I work with dozens of manufacturers — all of which have different processes and systems for lead sharing and follow-up?

Exactly.

The way to bring multiple entities into a single process is to adopt a shared platform. This enables distributors and their manufacturing partners to rapidly and easily share leads and to communicate about lead status and quality.

This proactive engagement approach helps distributors sell more — much more, in fact. You might have heard that portals can bridge this gap, but in reality the opposite is true. A portal or similar “static” destination that requires a log-in typically suffers from underutilization and outdated information. It’s just one more burdensome task to add to the daily laundry list.

By contrast, a push-based notification system that leverages email is a rapid and easy way to communicate the acceptance of a lead or the creation of an opportunity. With it, you can build a hassle-free, and optimized, sales process where everyone benefits.

SaaS companies: 5 platform must-haves that maximize channel sales revenue

When we think about companies that sell via channel partners, we often think of traditional industrial manufacturers who create a product and then sell that product through distributors or independent sales reps.

It’s not uncommon, however, for Software as a Service (SaaS) companies to operate using a similar model — partnering with value added resellers and other types of channel partners to sell their “product.”

For SaaS companies, leveraging an indirect sales force can be an effective model to both scale your business and to help you expand globally.

The indirect sales pipeline challenge

But no matter if you make tractors or software — the challenges all types of businesses face engaging with channel sales partners are the same. Poor pipeline visibility, disparate lead management systems, little or no communications on lead quality — all stand in the way of maximizing channel revenue.

Since you are not working from the same system, once a sales lead leaves the “four walls” of your business, you’re essentially flying blind — in the dark about the status of the lead, and crossing your fingers that you’ll hit your monthly or quarterly performance metrics.

A shared platform eliminates visibility issues

Whether your indirect sales partners are distributors located in your time zone or value-added resellers (VARS) located across the globe — the key to optimizing your relationship is a common system of communication.

On a shared platform, you can easily track pipeline activities for internal reporting as well as external channel enablement initiatives. You can also create a mechanism for direct partner feedback so you know exactly how “closeable” shared leads really are.

5 platform must-haves

Here are 5 platform requirements SaaS companies should consider when looking to bolster their channel sales efforts. Your platform should:

  1. Integrate into your current workflow
  2. Hide any complexity from your channel partner
  3. Deliver contextual information at the right time
  4. Integrate seamlessly with existing systems
  5. Provide accurate performance data in real-time

Time to value before the end of the quarter

SaaS companies undergoing rapid expansion and growth can benefit from leveraging channel sales partners, since it’s a faster and more economic approach than setting up a whole new shop in a whole new country.

When time-to-deployment is a critical factor, be wary of a large-scale, multi-month systems deployment and on-boarding program.

For companies that want to see a meaningful revenue impact this quarter, look for a platform that can go to work, and produce results, in less than 30 days.

In a channel sales environment, tracking every sales lead is critical to maximizing revenue. Does your current solution make the most of every lead in your sales pipeline?

Take the Guesswork Out of Channel Revenue Forecasting

Do you find yourself guessing what the revenue contribution from your channel partners will be at the end of the month or quarter?

Do you look at historical performance and “hope” it continues or even increases over time?

For companies that sell through channel partners, separation between financial forecasting and a channel partners’ actual performance has long been difficult to align.

Why does accurate forecasting and deal tracking matter?

Traditionally in the indirect sales model, the time lapse between what you hope will happen and what actually happens can have significant costs associated with it. You might be saddled with too much inventory and forced to incur the associated carrying costs for an anticipated demand that doesn’t materialize . Or, you might experience lost sales because low inventory prevents you from fulfilling an unexpected sale.

When visibility is limited across your channel partner network, the result is an information gap that strains  financial reporting and forecasting, not to mention the operational impact of running an efficient channel-revenue business.

Stop flying blind

Closing this information gap is a critical step to better understanding and managing the channel sales process.

To take the guesswork out of channel revenue requires clear and timely pipeline visibility. When leads are shares with distributors, do you they fall into a black hole? Or, are they easily tracked during every step of the buyer’s journey?

Enabling revenue-related information to flow back and forth seamlessly between a company and its channel partners requires an integrated approach.  In the past, integration has been complicated  by the fact that distributors and channel partners are working from different systems, making it impossible to actively share and update the status of a deal in both directions (from manufacturer to channel partner and from channel partner back to manufacturer).

But the ability to do this is absolutely key to accurate and timely forecasting and opportunity tracking mentioned above.

How to anticipate your needs

Channel revenue visibility allows you to anticipate your needs — whether that be inventory, revenue planning or revenue estimates for shareholders. To do this requires a shared platform that provides a unified view of distributor performance as it happens. Rather than hope or guess at what is taking place among your partners, a connected network of channel partners communicating easily via the same platform around deal status, action items, and opportunity tracking allows you to accurately track, manage and plan.

Armed with deal tracking data in real-time, you’ll know instantly:

  1. whether you need to ramp up inventory or pull back,
  2. if you are on course to meet quarterly revenue targets, and
  3. whether your future revenue estimates are accurate

The bottom line is that you can’t improve what you can’t see. And the ability to quickly respond to needs, demands or changes generates revenue and saves time.

See how the LeadMethod platform creates connections that increase revenue visibility across the partner network.

How to Create a High Performing Channel Sales Engine

This is the second in a two-part blog series that explores the differences between passive and active channel engagement, and provide tips on how to create a high-functioning, outcome-driven channel sales engine. If you missed our first blog that explains the characteristics of a passive approach, check it out here.

6 Steps to Active Channel Engagement

Is all engagement created equal?

When it comes to channel enablement — pushing for high performance and better revenue outcomes — the answer is no.

In one corner is the passive approach. Notoriously inefficient in the channel sales environment, passive engagement is often marked by miscommunication, incomplete or old data, and technology that isn’t built for the unique requirements of channel sellers.

You can read if you fall into the passive camp here.  

By contrast, active channel engagement is distinguished by efficient, two-way flow of real-time information utilizing technology purpose-built for companies that sell through distributors or partners. Brands that adopt active engagement strategies are better able to adjust to market dynamics and customer needs, and experience immediate revenue gains from existing leads and opportunities.

Redefining Channel Sales

Active channel engagement is an approach that leverages pro-active and contextual engagement to truly enable the channel and maximize revenue potential. It’s the link that provides critical information flows between the manufacturer and channel partner based on the same view of the data.

Here are six critical elements that define an active channel engagement approach:

  • Unified view
    A unified view of all lead and opportunity details so that both manufacturer and distributor see the same updates and points of need.
  • Alignment
    Push-based notifications that align with current workflow providing information to the right person at the right time consistent with a “next best action” approach to sales enablement.
  • Continuous feedback
    Closed-loop feedback and status reporting that builds an information bridge between a manufacturer and all their distributors so that details on lead quality, deal status, training and education needs are clearly actionable.
  • Contextual
    In-context sales content and materials provided at the system level and positioned at the right deal stage and right product offering allowing for continuous training and knowledge transfer while providing a single publish and distribute interface for the manufacturer.
  • Visibility
    Visibility to leading indicators of channel performance like lead scores, follow up times, and deal stage conversion rates as a single view that both manufacturer and distributor can use to manage the channel.
  • Create a high-performance sales engine
    When active channel engagement strategies are implemented, the result is immediate revenue gains — generated from existing lead and opportunities as well as from cost reductions. Longer-term, the channel is able to reach its revenue potential, and better adjust to changes in market dynamics or customer needs.

Adopting an active channel engagement approach is essential to maximizing revenue and return on investment from channel activities. By establishing and integrating engagement, feedback, sales enablement, and nurture processes, manufacturers become better aligned with distributors and create a high performance channel sales engine.

Want more expert Channel Engagement advice? Drop us a line.