As sales leaders, we have all had to assess how we best reach our target market. And, depending on the product and the market, we would determine the best route to market. Although there are many routes to market, I want to focus on the basic two: “direct” and “indirect”—or via channel partners.
Most likely this route-to-market decision would be based solely on how to get a product most efficiently into the hands of a customer; I would submit, as sales leaders, our biases get in the way. What I’ve found is the partner participation ratio (indirect revenue divided by total revenue) is heavily influenced by the background and training of the sales leadership making the route-to-market decisions. In other words, sales managers put more credence towards what they know and what they’ve done in the past with less regard for what must be done today to solve today’s issues.
In essence, experience has shown that sales managers are indeed a product of their former environment. What they grew up with, what they have known, and what they are most comfortable continuing because it’s worked well for them in the past. The issue is, for most of us, change is difficult. And why change what we are good at and what is seemingly going well? What we too often forget is in sales, the target is always moving; and there is always a need to scale our success to smaller customers and different markets.
I’ve learned in my career there are three basic types of sales leaders: 100 percent Direct, Partner Neutral and Partner Advocate. I’m referring to a mindset, a way of thinking, not the type of sales team you actually lead.
Here is a short description of each. The 100 percent direct sales leader wonders why in the world anyone would want to partner. It’s hard work, it’s more work, we give up margin and we lose control of our accounts. Why give up 40 cents or so of every dollar to a partner? Isn’t it just easier and cheaper to sell direct ourselves? This type of sales leader has no affinity or desire to partner at all. This sales leader is not prepared to think strategically to find the right and optimal channel partner mix.
The second type of sales leader is “Mr. Partner Neutral.” Unlike the command and control direct only sales leader, this leader is “open but neutral.” This neutral leader is not promoting partners nor resisting partners and has a mindset that partnering is a necessary evil to do business. I view Mr. Partner Neutral as a “first level thinker”; he’s realizing he will increase market penetration and expand market coverage but is not truly leveraging partners to improve business results.
The third type of sales leader is a “second level thinker”: he’s a sales leader that is a true partner advocate. That’s not to imply at all that this leader is 100 percent indirect; this leader wants to find the right balance, the right strategic mix of direct and indirect. This sales leader wants to truly leverage partners and understands what the value partners bring to both the customer as well as to the vendor. This partner advocate sees partners as trusted advisors and is looking for the right optimal mix of direct and indirect to optimize company profit.
It’s been my experience that most sales leaders are partner neutral. There are a few “old school” direct sellers that will only direct sell, and they will never change. They are who they are. But the majority of global sales leaders, at least the most effective ones, are true partner advocates.
What kind of sales leader are you? What kind of sales leader should you be given your role in your company? And, if you are not a partner advocate, are you allowing your past to wrongly influence the direct/indirect mix that is best for your company’s future? Think about it. Don’t let your past direct heritage that has worked so well for you cloud your judgment when determining the appropriate and optimal channel mix for your business’s future. Good luck and good selling!
Author: Kerry Grimes