Applying Customer Focused Principles to Channels

In the same way that many direct salespeople lead with offerings, many channel managers—that is, the people in the organization who are responsible for recruiting and supporting channels—are guilty of taking the same approach. We believe, though, that the principles of Customer Focused Selling can be applied to channels, and we'd like to discuss how the methodology could be used to empower business partners to see how they can increase top-line revenue. We believe that recruiting of VARs can be distilled to business goals, and therefore to conversations.

Calling at high levels is critical when recruiting business partners. The decision to add to or modify the list of companies a reseller represents can cost significant resources and money. The majority of VARs are relatively small organizations. Whenever possible, calling on the owner of the business minimizes red tape, allows early qualification, and shortens the sales cycle. To gain mindshare and be in alignment with the buyer, the initial effort is to convince the business owner that he or she can improve bottom-line results by representing your company and offerings. This is critical when attempting to recruit VARs representing multiple companies. Here is a sample Targeted Conversation menu for the owner of a VAR selling software and services:

• Improve margins

• Make good technology bets

• Improve return on investment of relationships with vendors

• Match offerings with their core competencies and customer base

• Optimize the mix of services and offerings

In an initial call, an attempt should be made to cause a business owner who isn't looking to change (the list of companies the business represents) to consider adding your company to the list. (By now, we assume that you recognize much of this language and approach.) We suggest approaching VARs feeling it is necessary to displace an existing vendor on a VAR's list—presumably the one that is making the smallest bottom-line contribution. VAR owners have a finite capacity as relates to the number of manufacturers they can represent. From the VAR's perspective, optimization of these companies will lead to the best bottom-line result. So your job is to demonstrate that your company belongs in that optimized picture.

Examples of characteristics the owner of a VAR could find attractive about a company and its offerings include:

1. A "hot" market space (e.g., e-commerce in 1998 or customer relationship management in 1999)

2. A unique offering that few, if any, other vendors have

3. An offering that is complementary to existing offerings used by their client base

4. An offering that is a good candidate for add-on business with their customer set

5. A product with a high degree of accompanying services (SAP, PeopleSoft, and so on) if their focus is on professional services

6. Attractive margins or commission structure

A channel manager recruiting business partners should attempt to determine which characteristics represent their strengths, and create a menu of potential goals and Success Stories that will most effectively position the company. By doing a diagnosis first, ideally the business owner can be brought to a vision about the benefits of establishing a relationship.

Once you have gotten the attention of an owner who believes he or she can improve business results by joining forces with you, the next step is to provide an idea of how the owner will be successful. Especially for offerings with a mild to high degree of complexity, support of the channels is important. Once again, consider making a list of what you have available to offer partners. Here is a partial list:

1. Brand recognition

2. Advertising campaigns and promotions

3. Local sales staff available for making joint calls

4. Education and training for both your partners and their customers

5. Sales support

6. Lead generation

7. web site or intranet to address frequently asked questions (FAQs)

8. Marketing programs and support (local and national)

9. Local technical support

10. 24/7 hotline

11. Quick turnaround of orders placed

12. Willingness to offer exclusive territories

In the same way that salespeople tend to spew opinions, many channel managers tell potential partners how great the support is going to be. But many VARs are "burn victims"; they remember that while past relationships sounded attractive while they were being sold, they ultimately turned out to be a series of broken promises and misset expectations. Getting your proposed support down to the level of usage scenarios will be helpful in making sure both parties are on the same page.

Once the buyers believe that they can improve their business results and understand what support will be available, the last area to discuss is the usage of the actual offerings. This will require resources from both parties. As usual, many such recruiting attempts begin with a product "spray and pray." Yes, products ultimately have to come to the fore—but only after you've gained mindshare regarding the value of doing business, and have helped define the support that the partner will need (and that you can provide).