What is a indirect sales channel ?
CHANNEL AS A SERVICE
The service aimed at B2B SaaS Companies to scale their sales revenue.
www.channelasservice.com
• Started out in IT at Sun Microsystems then Oracle
• Built global startup eco system - Sun Startup Essentials
• Built largest Big Data global event - Big Data Week
• Built channel at DataSift then Zendesk (pre IPO and post)
• Left to explore working in the real world
• Loves SaaS and the Channel.
WHO IS STEWART?
Party Animal
Likes Flowery attire
Fashion advisor
CREDIBILITY BULLET
• Built channel program at Sun Microsystems aimed at recruiting startups
to purchase high availability hardware - everyone laughed.
• DataSift - one of three licenses globally for Twitter Firehose - Built
channel from zero ( and a sales team, fed the cat as well)
• Zendesk - Joined Pre IPO less than 200 staff - built from scratch a global
$10M ARR partner business.
• Channel - How a company sells their product
• Direct - Company to End User
• Indirect - Company to middle man to customer
• Reseller - Anyone that resells product or service
• Affiliate/Refers/Introducer - Does not sell (but still a channel)
• Partner - Legal term, but means reseller
• VAR - Value Added Reseller (installs, integration, training, etc.)
• System Integrator - Development capabilities.
• Distributor - Wholesale distributor
• MDF - Market Development Funds
• Co-op - Co-operated funds
• Channel Conflict - Resellers and/or vendor compete for same sale
INDIRECT SALES TERMINOLOGY
• A 100% commission, get paid when you get paid lead generators.
• Normally consultants who work in your clients and sector.
• They are lead generation only - you own the client and close the
sale.
• Trusted by their clients - normally leads are highly qualified.
• Not a run rate business, random in terms of lead generation.
WHAT IS A REFER/INTRODUCER CHANNEL ?
• A 100% commission, indirect sales force
• They take all the risk
• They cover their own expenses
• Often provide their own leads
• Can co-sell with you
• Must build loyalty to increase “reseller recommendation”
• So… they work to deliver you sales leads that they close and take the
cost of sale against.
WHAT IS A RESELLER CHANNEL ?
• Technology Partnerships - Integration heaven.
• Cooperative technology partners
• Joint sales and expansion opportunities
• Credibility
• Solves customer pain points - buy or build.
• Growing channel sector.
• So… you integrate with other vendors who expand your market
footprint and reduces your build or buy development costs.
WHAT IS A TECHNOLOGY CHANNEL ?
• Grow your revenue and expand your service capabilities.
• The right partner will increase your revenue with no headcount increase.
• The right partner will have relationships that you are unable to reach
• The right partner once fully trained will be self sufficient and as good as
your salesforce.
• The right partner will expand your services capability
• Technology partnerships expand your footprint and solve customer pain
points that make no sense for you to build
• Refer partners will bring leads that are highly qualified
WHY A INDIRECT CHANNEL ?
WHAT CAN INDIRECT DO FOR MY SaaS BUSINESS?
Channel can increase your
revenue at scale without
increasing Opex at the same
rate.
Gain access to
customers that you
cannot
Reduce
services/implementation
overheads
Grow your
location/language
coverage without
opening offices
WHO OWNS THE RELATIONSHIP?
DIRECT SALE
Customer
Vendor
Customer
Customer
Vendor
Vendor
Reseller Partner
Customer
Vendor
Vendor
Customer
REFER / TECHNOLOGY
RESELLER OWNS
ASSUMPTION MODEL - RESELLER
PAM
Partners
Partner Sales Deals Closed (Q) £7200 (ARR) Deal
Present ARR for direct
1
1
2
1
7200
24,000
1
5
10
3
21,600
24,000
1
10
20
5
36,000
24,000
2
25
50
10
72,000
34,600
2
50
100
20
144,000
34,600
WHAT MAKES INDIRECT SUCCESSFUL
• Do ALL the same things with your channel as you do with your own sales
team—and you get similar results. Seems obvious—but companies get
lazy, don’t assign resources, and are negligent…
• Invest in your channel and make them part of the organisation, otherwise
you will feel that the channel doesn’t work.
• Do you manage your sale team ? Do you get the results you want ? Then
you need to do likewise with reseller partners that trust you, help them
to succeed.
THANK YOU
WANT TO KNOW MORE
info@channelasservice.com
www.channelasservice.com
or for more information go to
WHAT IS DIRECT AND INDIRECT SALES ?
• Who sends the Invoice/Bill to the Customer ?
Customer
Vendor
Direct Sale and Relationship
Customer
Vendor
Customer
Vendor
Customer
Vendor
Partner
• Partners: Reseller, Distributor, Refer
• Reseller Partner Bills the Customer
• Reseller Partner pays the Vendor
• Distributor is multi-tier model
• Refer gets a fee per closed client
PARTNERING FOR INDIRECT
Customer
Vendor
Customer
Vendor
Partner
BUT I’VE BEEN TOLD CHANNEL DOESN’T WORK
• I hear it time and time again, a vendor signs up hundreds of resellers and
then says, “My channel isn’t selling anything.”
• Yet your internal sales team is selling. Why?
• You are not doing anything with your outside channel sales team. They
are 100% commission and take all the risk, so you neglect them.
• If you paid them all salary and commission—you would not neglect them
at all.
• Do the same thing as you do with your internal sales team, and you will
get similar success. Sounds obvious, but…
PARTNERING DIRECT AND INDIRECT ?
Qualification
Sales /
Closing
Delivery
Support
Resellers
Referrals
Strategic Partners / System Integrators
Complementary Services
Direct Sales
Lead
Generation
WHAT DO RESELLERS LOOK FOR IN A VENDOR ?
Competitive
Is your product competitive in
the sector it sells into ?
– Can it be sold easily, not
having to build a
market.
Money
Can I make money working
with you ?
– Do you have
competitive margins?
– Do you have channel
conflict
– Sale cycles and Service
revenue
Support
Will you support me to grow my revenue
?
– Will you train me and my team?
– Well prepared sales tools
(PowerPoint, market info, demo
scripts, sales dialogues, content
portal, etc.)
WHAT DO RESELLERS EXPECT FROM A VENDOR ?
STRUCTURE
- Levels
- Market
- Requirements
SUPPORT
- Technical
- Sales
- Training
SALES TOOLS
- Portal
- Market Info
- Sales cheat sheets
- Blocker assist
- Email templates
- Brand Guidelines
LEAD GENERATION
- Lead assist
- Co-sell
- Sales help.
CHANNEL
IN A BOX
CHANNEL ROUTES
RESELLER
- Purely sell
product
- Access to key
accounts with
plan and
accountability
TECH ALLIANCES
- Extend reach of
product
-
Increase lifetime of
product
- Extended client
base
SERVICE PARTNERS
- Data analysts
-
Implementation
partners
- Training partners
DISTRIBUTION
- Multi Tier model
- Growth to wide
market
- Sector or solution
specific.
CHANNEL
IN A BOX
CHANNEL ROUTES
- Multi Tier model - ability to sell products at
low entry and reliant on upsell or cross sell to
maximise cost of sale return
- Account mapping and planning expected - to
maximise the relationship treat them as direct
sales - objectives and plan
- Geographic coverage - allows for rapid
expansion with limited headcount increase
- Perimeter goals - only can increase payback
as they invest more
RESELLER
CHANNEL
IN A BOX
CHANNEL ROUTES
- Extend reach of product to a wider audience
through integration
- Increase lifetime of product, gives more
usage within a client but also embeds itself as
part of a larger problem being solved
- Shows maturity of product, other vendors
building integrations against you makes a
statement to the market
- Joint events/webinars/marketing etc
TECH ALLIANCES
CHANNEL
IN A BOX
CHANNEL ROUTES
- Extend capabilities of the services team,
bi-directional
- Implementation partners - deliver labs style
services rapidly
- Training partners - deliver training to clients
on site - allows scaling
- Data analytics / Reporting - align with partner
who has technology and resources to extend
out findings.
SERVICE PARTNERS
CHANNEL
IN A BOX
CHANNEL ROUTES
- Multi Tier model - Distributor > Reseller >
Client
- Accelerated growth to wider market
- Sector or solution specific - work with
distributor of cloud telephony solutions
- Complex relationship - but can bring in deals
rapidly
- Large network of partners across all sectors,
they recruit local resellers.
DISTRIBUTION
CHANNEL
IN A BOX
REFER PARTNER
- Send you leads - think of as an affiliate but
focused
- Pay out is up to you - lifetime or once
- Extended marketing - give them the same
resources to grow your brand.
VARs CHOOSE VENDORS’ BASED ON
Source: VARBusiness
Product Quality
87%
Order Fulfillment
55%
Profit Margins
45%
Price/Performance
45%
Commitment
43%
Technical Support
41%
Business Documentation
29%
Terms and Conditions
25%
Channel Conflict
21%
% of VARS
considering factor
extremely
important
CHANNEL BENEFITS/RISKS
Benefits
Risks
Direct
Indirect
Control
Higher Gross Margins
Direct customer relationship
Potentially necessary for complex sales
Harder to Scale
Higher fixed costs
Less flexible
Potentially necessary for complex sales
Can scale quickly
Established customer relationships in play
Co Selling opportunities
Increased demand generation
Ongoing investment - Recruit/Train
Margin sacrifice
Loss of customer relationship
Quality of channel partner
WHAT MAKES A CHANNEL SUCCESSFUL ?
QUALIFY
Are you ready for Channel.
Do you have buy in ?
Do you have the resources ?
Do you want to accelerate revenue
growth.
STRATEGY
Build out a program in a box.
Provide a program customised to
your needs.
Identify partners that will be
successful
Train your team to co-sell.
SUPPORT
Ongoing support to make
certain you succeed.
Support recruitment/train and
acquire engagements.
Guide you through the first six
months of implementation.
CHANNEL
IN A BOX
BUILDING A CHANNEL
DEFINE
- A Partner Proposition -
Whats the offer?
- Look at your
competition.
- Partner selection criteria
PROGRAM
- Build the program
elements (marketing,
resources etc)
- Tiers and commercials
EXPECTATIONS
- What partner
type?Reseller etc
- Build goals and metrics
for achievement on both
sides.
INTERNALS
- Build internal partner
focus
- Recruitment campaigns
and keeping it real.
EXAMPLE - WHATS NEEDED?
• Partner operation plan - Resources, Time, Organisational requirements
• Legal Agreements
• Internal Training documentation
• Internal manual for the partner program
• Information for partners on how to obtain support and training
• Deal registration and channel conflict process
• Partner Proposal and Recruitment
• Marketing in a box
• MDF fund structure
• Partner Selection Matrix
• Partner Research
WHAT MARGINS ARE ACCEPTABLE?
TIER
REFER
RESELLER
BRONZE
10%
15%
SILVER
15%
20%
GOLD
20%
30%
SUCCESS FACTORS
• Customer front and centre:Every investment is to be benefit the
customer.
• Match your solution to the channel : Marketing material and information
• Communicate often: Make sure partners have all the information they
need to be successful.
• Monitor and measure - there is always room for improvement
• Don’t swop and change: It can take 2 quarters to get a partner signed,
onboard and working. Focus on how to deliver a better experience.
• Be clear about what you want your partner to do: Make sure aligned
and clear
• Support partners pre and post sale: Offer a co sell model initially.
• Competitors - support you’re partners with up to date information on
how to beat out your competitor.
• Knowledge share - bring your partners together in a council.
FAILURE POINTS
• You stop : Once created you need to keep making constant
improvements and updates to the program.
• Lack of clarity : Make certain you have communicated clearly what is
required of your partners.
• Geographic diversity : Have you considered governmental, financial and
cultural differences.
• Investment in resources and systems : These takes continuous
investment and effort. Build this into the investments, it’s not a one hit.
• Diverse requirements : Each partner has different requirements, respect
that and work with their motivations.
• Wrong partner : You have signed up the wrong partner, change and
adapt.