Rewards and Risks of Channel Selling
What's your channel strategy for international sales? Does it involve one-size-fits-all rep training and investment, even though the 80/20 rule would suggest that 80% of your revenue comes from 20% of your distributors? If so, you’ll want to re-evaluate your approach.
Many advanced manufacturers and technology companies use distributor or rep channels for overseas markets. For high touch, high tech sales, these channels often make sense. A distributor channel strategy offers:
- low cost of entry
- local service and consultative or system sales
- faster time to market with no infrastructure investment
However, selling through distributors also presents inherent challenges in:
- product knowledge
- brand visibility
- customer experience
When working with channel partners, not only do you want to get your product in front of customers, but you also want to ensure a cohesive message and buying experience. Here are seven tips for improving the effectiveness of these distributor relationships.
7 Tips for Increasing Sales Through Indirect Channels
1. Choose the Right Channels
If you're just beginning to introduce distributor sales channels, consider these 5 sources for deciding the right fit:
- Your prospects – which sales reps do they work with for other product lines?
- Local recruiters and consultants
- Complementary technology companies
- Local trade show exhibitors
- Social media – use LinkedIn to research and identify by market and geography
2. Ask the Right Questions
Whether you've successfully negotiated with a new distributor or are working to improve sales with an existing rep, communication is vital. These questions can help you make sure that you are on track and meeting the needs of your distributor and customers:
- What's your expected annual sales from our product line?
- What lead volume does this require? (From us? From other sources?)
- Where else do you expect leads to come from?
- What applications and trends are you seeing in the market?
- What's the one thing we could do better to help you sell more?
- How does compensation compare to other lines you represent?
Share of mind equals share of wallet. If you communicate regularly, sharing information that's highly relevant, convenient (right format, right timing), and useful to your distributor’s customers, your product line will receive more attention and sales.
3. Make It Easy to Co-brand
Great distributors want to build your brand and theirs. Ask what content would be best received by their customer, and provide the digital files necessary to co-brand and produce locally.
Recent examples of distributor requests include:
- Asian trade journal advertising – Content for foreign language publications is better written and managed locally. Make the ad buy, provide co-branded artwork, and let the distributor write and manage it.
- Academic lab posters and giveaways – Supply high-quality artwork in an acceptable size and format, and give equal weight to both logos.
4. Create Distributor-Specific Marketing Outreach
A quarterly email newsletter can help keep distributors and their employees up to speed on product changes, new product launches, technology applications, and customer needs.
5. Ensure a Seamless Web Experience
Because buyers do the majority of their research about your company online, maintaining an up-to-date website and clear follow-up process for all customers is key. A few tips:
- Catalog integration and an easy, well-supported update process let distributors maintain their own website look and feel while still properly representing your catalog.
- Send RFQs and RFIs directly to distributors per territory. Spot check their follow-up speed and effectiveness.
- Introduce a content management system or process to ensure that collateral, web content, tools, pricing and specs are kept up to date, whether on your site or theirs.
6. Expand Hours of Technical Sales Support
The most common request we hear from distributors is for faster answers to their questions. They tell us that they’d sell more if they were able to give customers more definitive recommendations, specs, and delivery dates. Whether you choose to staff per time zone or expand the hours of your U.S. sales and customer service, speed wins.
7. Have a Plan to Gauge Success
You won’t know if you’re distributor investment is paying off unless you have some way to measure success. Here are a few qualitative and quantitative methods we suggest.
- Customer satisfaction – Understand customer needs, distributor relationship, and purchase experience via post-sale and annual surveys or regular customer interviews.
- Close rates – Does the distributor’s close rate dramatically differ from your direct channels? Why?
- Investment / Revenue – What's the ROI on time and investment in this channel partner vs. others?
Start creating your communication plan for your next launch with our Product Launch Plan & Communication Guide.