What does channel sales mean

What does a channel sales manager do?

Perhaps channel sales would be the right strategy. In this blog article we want to explain to you what channel sales are and their advantages and disadvantages. We will also answer the question: What does a Channel Sales Manager actually do.

Definition: what is channel sales?

Channel sales is the term used to describe the sale of products or services through distribution channels. The opposite of this is direct sales.

Tasks: What does a Channel Sales Manager do

With the right sales partners at hand, you can optimize your active marketing. In this position you will be responsible for the management and expansion of the sales network. That means, you win, activate and support the sales partners of your company. The goal is to generate more sales and thus increase the profit of your company.

As a channel sales manager, you typically develop roll-out strategies, activation campaigns and supporting sales material. You also help partners implement these strategies and work towards a sales quota.

The average annual salary of a channel sales manager is between 61k and 82k.

 

Advantages of a channel sales model

  • Low sales, marketing and distribution costs
    The sales partner usually has an established presence, is known and trusted by customers on site, and is already promoting their brand and the value it offers. By jumping on this bandwagon, you can reach new customers at very low entry prices and develop new markets and regions inexpensively.
  • Effective scaling
    If you have an established sales channel model with appropriate revenue sharing, co-marketing, incentives and other benefits, you can scale effectively by adding more sales partners to this mix. A channel sales manager can manage multiple sales partnerships, which ultimately generates more revenue. In direct sales, this would require an entire internal sales team.

Low cost to expand into new markets
A network of local channel sales partners can help you establish a presence in a new region or market for a relatively low price. And that has tons of benefits: You don't have to start or manage new businesses, advertise locally, hire employees in remote locations, or manage new branches.

Disadvantages of a channel sales model

  • Less control over the sales process
    Selling through partners means that there is still a middleman between you and the customer. Depending on the model, your company may not even be involved in the sales process. As a channel sales manager, you have little or no opportunity to influence whether a customer ultimately buys your product / service or not.
  • Income is less predictable
    The partners don't always share their entire sales strategies with you. And even if they do, it's difficult to make a statement about revenue if you have no control over the sales process. To a certain extent, however, you can compensate for this with a larger pool of partners.
  • Partner discounts
    Depending on the type and value of the partner, you will have to share between 20% and 50% of your earnings with the partner making the sale.

 

How can you motivate your channel sales partners?

Selling through sales partners can be very challenging because you have to motivate people over whom you have no direct influence. If a traditional salesperson doesn't meet their quota, you can work with them on their problems and / or set up a performance plan. If, on the other hand, a partner is not selling, then as a channel sales manager there is not much you can do other than “kick” them out of the program. However, this is of course not usually the preferred solution.

However, there are still a few things you can try before you finally part with them:

  • Develop excellent resources

    Provide twice as much information to sales partners as to direct salespeople. Because the channel sales partners are much less familiar with the product, your competitors, existing customers, the company's history and the possible uses. In any case, you should make sure they have detailed, understandable product specifications, testimonials, customer examples, comparisons with competitors, email templates, call scripts, schedules for appointments, and information on how to deal with objections.

    All these materials will eventually make the partners more confident, which in turn increases their willingness to sell.

  • Communicate a lot

    Even if the partners rarely hear from you, they won't show as much engagement. In addition, they will not be informed of the latest news, product updates, and strategic announcements. As a channel sales manager, you will only recognize problems after they have existed for a while.
    The solution: stay in regular contact with your sales partners. For example, you can email them regularly, create a Facebook group, or use a chat program like Slack. In addition, you can also offer special "consultation hours" for partners, host webinars and organize meetings directly at your company - whatever is necessary to stay in touch.

  • Offer extra incentives

    Commissions are a compelling incentive, but they are more standard. An additional bonus program, on the other hand, can motivate channel sales partners even more:
    For example, you can establish a tiered system: one tier for basic partners, a higher tier for partners who sell products for more than a certain amount per month or year, and a third tier for partners who sell products for an even higher amount per month or year Year sell.
    Depending on the level, the scope of support for marketing is then determined. You can also offer tickets for exclusive events, strategic advice, meetings with the executives of your company, access to beta functions, a premium entry in your company's business directory, opportunities to interact directly with your customers, mention in the company newsletter, etc.

Conclusion

Channel sales is the distribution of products / services through sales partners. The task of the channel sales manager is to identify suitable partners and to look after them. Channel sales offers many advantages compared to direct marketing. Among other things, it is a cost-effective method to open up new markets and regions. However, it is important that you keep in close contact with the sales partners and provide them with more information than internal salespeople. Additional incentives such as bonus programs also contribute to the success of the collaboration. With all of these in mind, you can successfully market your company's product / service and increase your company's bottom line.

 

Would you like to learn more about the topic of "Channel Sales Partner Strategy"? Then check out the following video!