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The Ultimate Guide to Channel Sales Strategy for B2B Companies

The Ultimate Guide to Channel Sales Strategy for B2B Companies

Kushal Saini Kakkar
Kushal Saini Kakkar
September 12, 2022
5 min read

Some people say that successful people are not the ones who are gifted but the ones who put in the hard work. 

If that was the case, then every sales rep in the world deserves a promotion. 

But we all know that reality - at least in the business world - is quite contrary. Businesses require the sales teams to deliver results. If the reps close deals, there’s a slice added to the revenue pie, right? And so, you need more leads, more wins, a higher conversion rate - and to make it all possible - a more powerful sales team! 

A smart way to make this happen is: channel sales. 

You get more hands to do the selling and shoot up your conversions and ROI. 

What is a channel Sales Strategy:

You know how sometimes, you wish someone else would do your job, or at least a part of it? Or that you had an extra pair of hands? Or more hours in a day? 

Well, that’s exactly what you get when you use channel sales - more hands on deck. And although there’s no proven way to stretch time yet, your time will go further with more sellers on the job.

Unlike direct sales where the sales teams approach and address the  the end-consumer, channel sales is an indirect approach that utilizes an intermediary to reach consumers. Simply put, when B2B sales teams outsource, it is called indirect sales, or channel sales.

There’s a fairly high chance that you already use some form of channel sales. Research says that 75% of the globe's commerce takes place through channel sales. Many companies engage in a channel sales strategy to make sales through third parties. 

There are several different kinds of third-party channel partners, such as value-added suppliers, affiliated partners, resellers, distributors, wholesalers, independent retailers, agents, influencers, consultants, and other entities that do not directly work with the sales teams or the organization. 

Although channel sales strategy has been seen to increase revenue and lead generation in some organizations, it may or may not be the wise choice for you. Let’s look at some of the pros and cons of a channel sales strategy so that you can weigh how it fits into your context. 

Advantages of the Channel Sales Strategy:

  1. Credibility comes along

When a channel partner with a name in the market, and existing connections with customers endorses a brand, it enhances brand awareness and credibility. You improve your chances because customers are already attentive to this voice and already trust it. Maybe they have had prior experience working with the channel partner that have proven positive. You get to tap into this pre-existing positive sentiment associated with your channel partnerships. 

  1. Mo’ people, mo’ money 

The revenue generated by an army of  salespeople can be achieved at minimal expenditure with a single sales manager or a capable team of salespersons working alongside a channel partners. This means that you can tap into new opportunities, and new markets, and grow your business without investing heavily in expanding your own team. Whether you have a trim sales team or a large network of salespersons, channel sales empowers your existing sales team and helps them do more with their time. This is especially relevant in uncertain times where you might not want to invest in hiring additional resources. Channel sales relationships are commission-based.  

  1. They take your risks 

Channel partners allow you to experiment with fresh products, marketing campaigns, sales pitches, price structures - without having you to make any efforts.

  1. Breathe, dear rep, breathe. 

One of the major attractions of a channel sales strategy is that it allows businesses to streamline the workload of sales teams. Channel partners can deliver trivial customer services such as training and queries, onboarding and deployment, and maybe even day-to-day support. This allows the sales reps the room to breathe and concentrate on aiming to close new deals without having to worry about client retention. 

  1. Tap into new markets 

Channel partners allow you to dive into new pools and geographic areas so that you can rapidly expand your brand's reach. Together, the marketing efforts are also multiplied, as they help you execute your marketing efforts (like webinar registrations, hosting events, email marketing, and handling on-site training). 

Disadvantages of the Channel Sales Strategy:

  1. Wait, who’s in command now?

Because the sales process moves out of your jurisdiction in an indirect sale, the brand's direct salesforce might not have the opportunity to execute any kind of damage control in case a channel partner does not properly carry out his job. 

  1. Their image is your image 

This is the flipside of one of the biggest advantages of channel sales. It was the first we discussed - the positive sentiment associated a well-reputed channel partnership are extended to your brand. But conversely, if you unwittingly collaborate with a channel partner who has a poor reputation or bad customer reviews, then your brand will very likely be tainted by the negative sentiments associated with your partner. Of course, this risk can be minimized by doing thorough research on channel partners, asking for client testimonials and of course, by working with channel partners trusted by your network.

  1. Damn those cuts!

As part of being partners, you are invariably required to share. That means that you earn less on every deal closed because commissions eat into whatever the customer pays. To be fair however, you need to tally this amount up against what it would have cost (in terms of time and capital) to hire and deploy your own team for the job. 

  1. Healthy sales, unhealthy competition?

You want your sales team motivated and you definitely want to keep a healthy amount of pressure going, but you don’t want sales reps feeling insecure about their jobs. You also don't want unhealthy competition creeping into the relationship between sales reps and channel partners, where they try to pull the carpet from under each other’s feet and so on. Have a clear system of demarcation of territories to steer clear of such a situation. 

  1. Sluggish feedback cycle

Indirect sales slow the feedback cycle as the channel partner - being an intermediary - may sometimes need to carry information to and fro. Of course, this intermediation commonly leads to Chinese whispers (where information gets lost in transition), biased interpretation, or inaccurate feedback. 

As you might have noticed, the benefits of a channel sales strategy are quite compelling, and its disadvantages can be easily avoided or efficiently side-stepped. 

Ready to give it a shot? Well, you want to put some effort into finding the right channel sales partners. What attributes should you look for? 

What Makes for a Worthy Channel Sales Partner?

Channel sales partners not only make your product more accessible but also serve it the same target audience that they already appeal to with their existing strategy. Especially, because you only pay for deals struck, you might be tempted to employ a whole army of channel sales partners, or just about every channel partner who you happen to come across. But you’ve heard the saying about too many chefs right? Same story here: too many channel partners spoil the sales strategy. 

Instead, handpick a small selection of partners. Keeping your standards high will pay off. 

Here is a checklist that you can use:

Complementing the product 

A good channel partner must aim to bridge the gap between the organization's services and its consumers. If your product is software for business, it might not make sense to join forces with a channel partner reputed for gaming stations, even though they operate in the tech domain. 

Goal alignment 

If you want to work with premium customers and do not believe in rate-cutting but your channel partner believes in volume-based selling, your professional relationship is going to be an incredibly bumpy ride. Some channel partners bring in business by overpromising; this might be in direct conflict for a brand that prioritizes customer satisfaction. A coherence of goals and values is imperative. 

Leading technical expertise

A channel partner won't magically know what one requires of them. You would need to sit down with them to offer your product/service training. But how much you need to spend time on the training will depend on their expertise. You might want to work with someone who already has their basics in place (which would be the case if they operate in the same space). 

Is the Channel Sales Model for You?

Embracing a partner for channel sales can be quite the tough call to make especially with the risks of damage to brand reputation and authority. So prior to leveraging one, ask yourself these questions:

  • Do you have sufficient resources to control the growth you are expecting?
  • Is your sales process competent enough to accommodate channel partners?
  • Are you willing to put the brand's reputation in the hands of your potential partners?

If you wish to incorporate channel sales as your marketing strategy over direct sales tactic, then you should to consider the following factors:

Company's maturity and scale

It makes complete sense for a small or new business owner to invest in channel sales strategies to scale their growth and revenue instead of spending more money on sales teams. 

Maturity of the products

Since indirect sales are unfavorable to the cause of receiving feedback from consumers and making improvements, you probably should walk down the direct sales route in case the product is in its early stages. 

Maturity of the sales process 

How are you to give a channel partner the crash course on your services and sales process if you still haven't structured it all down? 

Before choosing to utilize a channel sales strategy, you might want to understand vital aspects like the different sales process stages, involved customer stakeholders, average deal closing time, and buying triggers. 

Company Location 

If the company's offices are scattered, that would require employees at every office site. In such a case, instead of investing in several sales teams, it would make more sense in pursuing the channel sales strategy.

Now if you're feeling confident to pursue a channel sales strategy, then let's get down on how to create one.

Did you know that 72% of channel partners cannot connect with buyers' challenges and needs? With no influence over channel sales, it can be quite challenging to motivate your partners. If a channel partner hits a wall or does not live up to the sales quota, then you would require resources to give them the confidence to make sales. You need to be able to back them up with referrals, tips on improving messaging and call scripts, email templates, case studies, white papers, competitor comparisons, and product selling points to boost their morale. 

Wingman can help you do that, and more.

Wingman's AI-powered analytics can help you to offer support to your channel partners in real-time. With Wingman’s sales intelligence and automation platform, you can onboard your sales channel partners and auto-record their sales calls with your potential customers. Using that data, you not only get rich insights into their sales process and buyers’ journeys but also get complete visibility into all of your deal pipelines. 

Not only this, Wingman provides your sales reps and channel partners with live assistance to improve CX on call and optimize your sales cycle. By integrating your CRM with Wingman, you can provide your sales teams with a single source of truth to push more deals down the sales funnel. It provides you the right insights, metrics, and opportunities - at the right time - to help adjust your messaging, close more deals, and increase your win rates!

Channel sales is just what you need when you’re breaking into a new market or looking to expand your sales network. In today’s context, its a great way to navigate an uncertain market because you’ll have more hands on deck without investing up-front. You pay only for sales made and therefore get the most bang for your buck. Kick-start your channel-sales-journey with your wingman by your side, book a demo now!

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