High-Tech and Electronics Sales: Winning at Channel Partner Performance

Technology-based businesses are consistently looking for agile and innovative solutions to control and push their sales strategy while responding to constant change. As these companies operate on a global scale, they are pressed with enormous challenges such as: organizational changes due to local vs. central management, complex matrix or regions, lines of business, products/services, and channel partner networks.

High Tech and Electronics Winning

Whoever said slow and steady wins the race has clearly never won any competition. To ensure they won’t be left out and won’t succumb to powerful change forces, high-tech and electronics industries must start investing in people, processes and platforms that lend agility, innovation and continuous improvement. These initiatives will help them negate their vulnerabilities and enable market expansion.

The following six channel partner priorities for high-tech and electronics have been nurtured by our decades of experience in delivering awarded technologies and expert know-how that enable large sales organizations to increase sales performance.

What are these channel partners?

Many high-tech companies, including the biggest players in the industry, use channel partners to reach a portion of their customers. The experience of many high-tech companies over the past few years demonstrates that indirect sales open doors to new business opportunities faster, at a lower cost, and with lower risk. For high-tech companies, channel partners assist in marketing and selling their technologies, services, and solutions locally and across the globe.

Channel partners can be vendors, consultants, value-added resellers, systems integrators, retailers and distributors. Channel partners offer an established local network and their proximity to customers. In fact, many hardware and software companies have found that channel partners are the fastest way to scale a new product launch and support rapid sales growth.

As businesses are going global, channel partners provide a fast and easy way to penetrate new markets and expand existing customer relationships in new geographies. They also assist in local sales and marketing of their partner solutions and services. While these “glocal” (globally local) partner companies focus on sales and marketing, high-tech and electronics companies can focus on other strategic imperatives and core competencies.

Now that we realize and recognize the significance of channel partners’ role in growth of the parent company, we must also acknowledge that not all of them are designed for success. Only those few companies that have identified certain needs of their channel partners and found the right means to fulfill those needs and provide solutions will achieve sales transformation and sustained growth.

What are their NEEDS?

As the dependency on channel partners for revenue growth increases, the need for effective partner management programs is also growing. The following six priorities for channel partner effectiveness and sales performance improvement also highlight the corresponding needs of partner networks that should be fulfilled by their parent companies. By providing specific solutions to their channel partners, high-tech companies will help them stand out as the fastest, fittest and most fashionable of the lot.

Channel partners need transparency

Channel partners need transparency

Provide a clear visibility into the channel strategy

Technological change and the rapid invention, innovation and continuous improvement require clear strategies and a rigorous management of strategy implementation, execution and analysis. To ensure that companies can profit from technology trends such as the increasing significance of software, the convergence of telecommunication and media, cloud computing, Industry 4.0, Big Data, mechatronization or Smart Grid, they must have a strict focus on strategy.

When channel partners are provided with a clear visibility into the company’s sales strategy, it tends to build belongingness and commitment to the corporate vision. Giving them a clear understanding of their role in executing the sales strategy and keeping them posted on changes to strategy will make way for successful execution and analysis.

Channel partners need growth

Channel partners need growth

Provide a motivating compensation plan

Managing channel partners through any change can be challenging, as these are not mere additional sales people within the organization but separate entities that need to be mentored, managed and motivated differently. Incentives and bonuses help to drive friendly competition and faster adoption of change.

In today’s turbulent time, high-tech businesses need to look at the incentive compensation system beyond reward and punishment or carrot and stick systems. By aligning incentive schemes with intrinsic motivational factors of sales people and channel partners, companies will drive all sales forces to consider themselves part of the larger good.

Channel partners need knowledge

Channel partners need knowledge

Provide them access to useful information

Creating and maintaining a two way dialog with partners is vital to success. Working with global channel partner networks requires an understanding of cultural differences that may impact business practices. With rapid change being the norm, high-tech companies rely on channel partners to uncover new opportunities, manage risks, and maximize revenues while reducing costs. This shift in revenue towards channel partners can be fruitful only if companies can regularly communicate with them about sales trends and revenue figures, potential target markets, suspect opportunities, high-volume sales regions, high margin product lines, high profit, and low cost markets. Collaboration and exchange of information with channel partners is essential to their success.

Channel partners need simplicity

Channel partners need simplicity

Provide an ease of navigation through a complex sales structure

Since 1990 there has been a major expansion of mergers and acquisitions (M&A) in the high-tech industry, many involving the acquisition of young and small start-ups. M&A activities allowed these companies to acquire new technologies, expand their position in new markets, and take an organized approach to distributing their value proposition globally. But as companies are merged or acquired and new units are rapidly integrated, the sales organization becomes a complex global matrix. Many companies report that the greatest challenge when integrating two companies is the merger of sales and marketing. Channel partner engagement activities such as partner communications, training and, most importantly, building awareness are crucial during restructuring. Companies should aim to unwind their channel partners from the mesh-like sales organization structure and provide them with ease of navigation through single window clearance models.

Channel partners need convenience

Channel partners need convenience

Provide them new/additional sales enablement technology

High-tech companies and their channel partners should use the same technologies to enhance effectiveness. The strategies of processes in high-tech companies should be developed in response to the selling nature of their channel partners.

If partners find it difficult to sell your solutions, they will switch to selling other solutions that provide them with ease of doing business. For example, failure on the part of a reseller to fully adopt the high-tech company’s CRM tool will pose several hindrances in their path to closing a deal and this ultimately translates into revenue loss for the company.

The main purpose of sales enablement tools and technologies is to reduce the burden of administrative tasks from sales people so they can focus on closing the deal and spend most of their time on core sales-related activities.

Channel partners need flexibility

Channel partners need flexibility

Provide them with agility to match changing buyer needs

High-tech companies that not only wish to survive but aim at championing the competitive market forces must be able to innovate and invent. They need to align their offerings with changing buyer needs. To match this flexibility, the sales people, processes and platforms need to reflect the company’s internal perspective at every customer touch-point. As a result, sales performance excellence and sales performance improvement initiatives at several high-tech companies are increasingly promoting sales force behaviors to be like that of a catalyst and coordinator of this change.

Conclusion

Ambitious and successful high-tech companies recognize the important role played by channel partners in revenue growth and aim at collaborating with them to deliver a differentiated value to their end customers. Typically, billions of dollars – nearly 7-12% of revenue is spent by high-tech companies on sales and channel incentive programs – and yet only a third can actually track and analyze sales spend ROI, according to an Accenture study in 2013.

In order to achieve a competitive advantage, high-tech companies need to be:
The Fittest
by engaging and preparing channel partners for a business change
The Fastest
by responding to change faster than their markets are changing
The most Fashionable
by powering sales and channel performance through investments in transformational technologies

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