Picture this: you’re in the market for a cutting-edge software solution. Instead of navigating the complexities of direct purchasing, you consult with a knowledgeable reseller who not only recommends the best software but also facilitates the purchase and manages your license renewals through a dedicated support service.

In this scenario, the software company benefits from a sale and ongoing revenue without ever engaging directly with you, the customer. This is the essence of channel sales management—utilizing a network of partners to optimize sales processes and enhance customer experiences.

By strategically aligning with various partners like resellers, agents, and service providers, companies can tap into new markets and customer segments more efficiently.

This blog will delve much deeper into channel sales and its management strategies so that you could master sustainable growth and gain competitive advantage. 

What are channel sales? 

Surinder Brar adalah pakar saluran yang mencipta program jualan saluran di seluruh dunia dan strategi rakan kongsi terurus untuk Cisco. Beliau menjelaskan, "vendor sering menganggap saluran sebagai lanjutan daripada tenaga jualan mereka dan mengharapkan mereka berkelakuan sewajarnya. Ini pada asasnya salah. Saluran ini bukan sebahagian daripada organisasi anda, dan anda tidak boleh mengharapkan tingkah laku atau prestasi yang sama. 

In short, channel sales, also known as partner sales, is a form of indirect sales in which a company works with channel partners to reach its customers. Channel partners can include distributors, resellers, dealers, influencers, agents, and other intermediaries. 

Jualan tidak langsung berlaku melalui perantara pihak ketiga untuk mencapai pelanggan mereka. Ini termasuk pemborong, peruncit dan pengedar. Jualan saluran jatuh di bawah jualan tidak langsung; syarikat menjual melalui pihak ketiga. Kebanyakan syarikat menggunakan gabungan jualan langsung dan tidak langsung untuk jangkauan maksimum.  

Apple, for example, sells its products through its retail outlets and uses third-party retailers such as Best Buy. The difference between channel sales and sales channels is that the former is a practice of using intermediaries to sell while the latter is avenues for selling. Although all channel sales involve sales channels, all sales channels are not channel sales. 

 

Rakan kongsi saluran adalah organisasi atau individu yang dapat meluaskan akses syarikat ke kumpulan pelanggan yang lebih luas. Melalui jualan rakan kongsi saluran, syarikat boleh menjangkau pelanggan yang mereka perlukan bantuan untuk mendapatkannya. 

An example is companies that are trying to sell their products overseas. By partnering with foreign retail chains and distributors, they are able to cut through the red tape and get their products moving. 

Channel partners constitute third parties such as distributors, agents, consultants, affiliate partners, resellers, retailers and value-added providers. They are all people who sell the product but don't work directly for the company. Moreover, Forrester estimates that 75% of the world's trade flows through indirect means, i.e. through third-party partners? That’s a lot.  

Then what is the difference between channel sales and direct sales? 

When discussing channel sales versus direct sales, it's essential to understand the fundamental differences in approach. Direct sales refer to a model where a company sells its products or services directly to the end customer.

For instance, a tech company might sell its software directly through its website or a grocery store might offer products directly on its retail shelves. 

In contrast, channel sales involve utilizing third-party sales teams, often referred to as channel partners, to distribute and sell products. This approach can include various sales channels, such as resellers, distributors, and referral partners, who help reach a broader audience. 

Knowing the difference between channel and direct sales, one must know what benefits and advantages lie for them, if implemented. 

Benefits and advantages of channel sales 

The advantages of channel sales are primarily centered around one key outcome: revenue growth. In the software industry alone, channel sales revenue is projected to soar to $70 billion this year, a significant increase from $30 billion in 2019, as reported by IDC. Here are the essential reasons why channel sales success is becoming increasingly prevalent: 

1. Expand into new markets quickly 

By leveraging channel sales partners, businesses can introduce their brand to customers outside their existing networks, enabling faster scaling of sales than what might be achievable through a direct sales approach. 

2. Leverage existing trust 

When customers have established relationships with your partners, their credibility can enhance your own company's reputation. This built-in trust can significantly impact customer decisions. 

3. Increase brand awareness 

Partners can amplify your marketing efforts through their own influence, whether by hosting local events, conducting webinars, or training end customers on your solutions. This collaboration enhances your sales channel strategy. 

4. Reduce operational costs 

Utilizing an indirect sales model can lower expenses associated with maintaining a direct sales team. This approach allows for a more efficient allocation of resources and improved profit margins. 

5. Enhance customer experience 

Partnerships often add value by offering complementary products and services. This means customers can enjoy a more integrated buying experience without requiring your company to develop every aspect independently. 

However, there is a big “if” that decides whether channel sales will work you. 

Bagaimana untuk menentukan sama ada jualan saluran sesuai untuk anda? 

While it has plenty of benefits, the channel sales model is only an approach some businesses would want to implement. It becomes essential to consider many factors such as your margins, products, state of the company, sales process, operating procedure and others. How can you determine whether channel sales is right for you? Here are 4 major factors: 

1. Skala syarikat dan kematangan 

Syarikat-syarikat kecil yang tidak mempunyai pendapatan untuk mempunyai pasukan jualan khusus boleh memanfaatkan jualan saluran untuk mengeluarkan produk mereka dari tanah. Sebaik sahaja mereka telah cukup skala, pasukan jualan yang berdedikasi boleh mengambil alih atau bekerja dengan rakan kongsi jualan. 

Syarikat yang ditubuhkan boleh menggunakan jualan saluran untuk menembusi pasaran baru. Walau bagaimanapun, ia mungkin datang dengan beberapa cabaran. 

2. Kematangan produk 

Produk yang belum menempa nama di pasaran boleh berfungsi dengan baik dengan memanfaatkan hubungan pelanggan langsung. Rakan kongsi saluran dengan cara itu boleh menjadi tempat yang sangat baik untuk bereksperimen dengan ciri dan perubahan yang akan menjadikannya sesuai dalam jangka masa panjang. 

3. Kematangan proses jualan 

Melainkan anda mempunyai proses penjualan yang diperhalusi untuk produk dan pasaran anda, tidak mudah untuk melatih rakan kongsi saluran anda. Proses jualan matang mempunyai beberapa elemen, seperti pihak berkepentingan pelanggan, pencetus pembelian, panjang kitaran jualan purata dan parameter lain yang digambarkan. Syarikat-syarikat sedemikian juga berada di tempat yang baik untuk melatih rakan kongsi saluran mereka. 

4. Lokasi 

Perniagaan yang tersebar di pelbagai bandar boleh melakukannya dengan baik dengan menggunakan jualan saluran, dan ia membantu mereka membuang jaring yang lebih luas dan mengelakkan melantik pelbagai pasukan jualan. 

5. Permintaan pendapatan 

Pendapatan adalah salah satu faktor yang paling penting untuk dipertimbangkan sebelum memilih jualan saluran. Oleh kerana memerlukan sedikit masa untuk menubuhkan sistem penjualan saluran dengan rakan kongsi yang boleh dipercayai, ia mesti dicuba bergantung pada industri anda. Bagi sesetengah orang, bermula dengan jualan langsung dan penskalaan adalah lebih baik sebelum memilih rakan kongsi jualan saluran. 

If all these criteria are fulfilled, you must know that there are some drawbacks to these channel sales. 

3 drawbacks of channel sales to help perfect its management strategy 

While a channel sales strategy can be highly effective, it also presents several challenges that businesses must navigate. Here are some common pitfalls and strategies to counteract them: 

1. Less control over customer experience 

In a channel sales model, your partners represent your brand to the end customer, which means you have limited control over their interactions. To mitigate this, focus on providing an excellent partner experience.

When channel sales managers ensure that partners are well-supported and equipped with marketing tools, it often translates into a superior customer experience for the target audience. 

2. Limited knowledge about customers 

Indirect sales through partners can lead to a lack of visibility regarding who is purchasing your products. To address this issue, implement product registration processes. This allows you to create a direct connection with end customers once they register their products.

By gathering customer data at this stage, you can survey them to uncover unmet needs and ensure that your channel sales programs are effectively meeting expectations. 

3. Potential conflicts between sales channels 

When employing both direct and indirect sales strategies, conflicts may arise if partners feel they are competing with your direct sales team.

To minimize this, establish clear guidelines defining which products will be sold through the sales channel versus those handled directly. This clarity helps prevent confusion and fosters stronger partner relationships. 

By understanding these challenges and implementing targeted strategies, businesses can enhance their channel sales performance and drive revenue growth through effective collaboration with new channel sales partners and existing customers alike. 

7 effective strategies to increase channel sales and drive revenue growth 

Channel sales strategies play a crucial role in driving business growth. They should be integrated with a thorough analysis of market dynamics, conducted by both marketing and sales teams, to identify best practices, key drivers, and actionable steps needed to enhance results. Here are seven effective strategies to increase your organization's channel sales performance: 

1. Ensure availability of marketing and sales collateral 

In channel sales, equipping your partners with the right tools is essential for their effectiveness. This includes providing sales kits for resellers and marketing materials tailored for the target audience. 

  • Marketing collateral: Marketing teams generate leads for channel sales. Effective marketing assets not only raise awareness about the parent company's products but also help maintain control over the brand message. 
  • Sales collateral: Training tools can accelerate the sales process by enabling channel sales managers and partners to communicate the value proposition effectively. This collateral may include competitive data sheets, interactive webinars, sales scripts, customer testimonials, spec sheets, or case studies. 

Having well-prepared marketing and sales collateral significantly strengthens channel sales partnerships. 

2. Define clear rewards and incentive programs 

Incentive programs are vital in channel sales as they motivate partners to optimize their performance. While many channel sales partners have existing programs, they can often lack structure. 

Clearly defined metrics are essential for these incentive programs. Establish explicit expectations regarding sales and revenue yields for each sales channel, supported by thorough research into the potential of each channel—considering factors like prospective customers and revenue potential. 

Additionally, ensure that your rewards system aligns with monthly or quarterly activities for channel partners. Proper logistics, reporting, and analytics must be established and communicated effectively to all partners involved in channel sales. 

Compass, a holistic channel sales management platform, helps to run an effective channel performance program that will oversee every step of the process with proven results. 

Compass can significantly enhance channel partner management by enabling businesses to create complex and scalable channel incentive plans quickly and without any coding skills, thanks to its intuitive no-code plan designer. This platform allows for the design and launch of personalized channel partner programs tailored to specific criteria for each partner, facilitating a more targeted approach.  

3. Prioritize communication at all levels 

Effective communication is fundamental in overcoming common challenges in channel sales. The presence of multiple stakeholders can lead to confusion if communication is not streamlined. 

Partners should have clear points of contact for specific issues, promoting open lines of communication. Encourage cross-channel communication; for instance, manufacturers could offer assistance by reaching out to distributors' prospects as a supportive measure rather than a competitive one. 

Providing technical support for products and services is also crucial. Open and consistent communication fosters successful channel partnerships. 

4. Leverage cross-promotion opportunities 

Cross-promotion with channel sales partners is essential for mutual success. The success of one partner often translates into success for others in the network. This can involve promoting each other's marketing campaigns on social media or connecting through professional networks like LinkedIn. 

Building strong relationships through networking can enhance collaboration in channel sales strategies, creating a solid foundation for partnerships. 

5. Focus on enhancing existing partner relationships 

Prioritizing quality over quantity is vital when aiming to increase channel sales. Strengthening relationships with current partners can lead to more effective selling before seeking new ones. 

Consider how you can improve the effectiveness of existing partners—much like how McDonald's upsells additional items at the point of sale. Incremental improvements in partner performance can yield significant revenue growth over time. 

Compass helps identify profitable distribution networks by analyzing revenue trends across various distributor plans, providing valuable insights into market dynamics. By utilizing short-term tactical schemes and trade promotions, businesses can gain a competitive edge, ensuring that their channel strategies are both effective and adaptable in a rapidly changing market environment. 

 

6. Establish a partner advisory board 

Creating a partner advisory board can facilitate ongoing dialogue with your partners about their experiences and insights into the market dynamics affecting their performance. This collaborative approach helps identify areas for improvement in your channel strategy while celebrating partner success. 

7. Utilize technology to streamline processes 

Implementing specialized tools can help manage partner data effectively as you scale your business across multiple channels. These tools not only track revenue generated by your channel sales programs but also streamline incentive payouts and enhance communication. 

Best practices on how to increase channel sales 

Petua untuk membina strategi penjualan saluran yang sempurna 

Strategi penjualan saluran yang mantap adalah kunci kepada pengurusan jualan saluran yang sangat baik. Berikut adalah tujuh petua tentang cara melakukannya: 

1. Tarik rakan kongsi yang tepat menggunakan kandungan yang relevan dan berguna 

Menerbitkan kandungan tepat yang direka untuk menyasarkan rakan kongsi yang anda inginkan boleh pergi jauh dalam menarik mereka. Sebagai contoh, jika anda adalah syarikat yang mengeluarkan peralatan pertukangan dan bahan mentah, menerbitkan eBook dengan kandungan yang diterbitkan khusus untuk operasi dan penyelenggaraan jentera akan menarik rakan kongsi saluran yang betul. Rakan kongsi saluran yang mengenali anda sebagai pihak berkuasa dalam subjek ingin bekerjasama dengan anda untuk memenuhi permintaan daripada pelanggan. 

2. Bekerja pada keperluan rakan kongsi 

Untuk mempunyai hubungan jangka panjang yang menguntungkan dan berjaya, strategi penjualan saluran harus berfungsi dengan baik untuk rakan kongsi anda seperti yang dilakukan untuk anda. Mereka hanya akan bekerja dengan anda jika ia memberi manfaat kepada mereka. Oleh itu, fikirkan keperluan mereka dan bagaimana anda dapat membantu meningkatkan perniagaan mereka dengan menjual perkhidmatan tambahan, menangkap pasaran baru atau meningkatkan nilai penawaran mereka. 

3. Tentukan model perkongsian jualan saluran anda akan ada 

The model of your partnerships can be set in three different ways. First, you can work together with your partner on the products or services you're selling. For example, if you own an auto service center, your partner can run the car wash next door. 

Kedua, anda boleh menjual dengan bantuan pasangan anda. Kedai-kedai jabatan adalah contoh utama perkongsian seperti ini, dan mereka sering mengumpulkan barang-barang dari pelbagai penjual. Sekiranya anda mendapati seseorang yang menjual kebanyakannya dalam niche anda, mereka boleh menjadi sangat sesuai untuk perniagaan anda. 

Apabila bercakap tentang kaedah perkongsian jualan saluran, anda boleh memilih yang paling sesuai untuk anda berdua. Syarikat sering beroperasi dalam dua atau semua model untuk memaksimumkan jualan mereka. 

4. Kekalkan talian komunikasi terbuka dengan rakan kongsi anda 

Berkomunikasi dengan kerap dengan rakan kongsi anda menunjukkan kepada mereka dedikasi anda ke arah membina hubungan dan perniagaan. Jika mereka tidak sering mendengar daripada anda, mereka akan kurang cenderung untuk menunjukkan minat dalam program anda. 

Mereka juga akan terlepas kemas kini penting, berita terkini dan pengumuman strategik yang akan mewujudkan ketidakcekapan dalam jualan atau lebam di jalan raya. Kekal berhubung dengan rakan kongsi saluran anda melalui e-mel biasa, kumpulan Facebook, bilik slack, webinar dan mesyuarat pejabat memastikan mereka berada dalam gelung dan perkongsian yang kukuh. 

5. Memotivasi dan menyokong rakan kongsi anda sepanjang 

What makes channel sales so challenging is that partners can lose motivation over sales, and there's little you can do about it. Unlike your full-time sales reps, which can be motivated through performance plans to meet sales quotas, underperforming partners can become hard to motivate. 

To ensure your partners can perform at their fullest, give them material such as comprehensive manuals, customer testimonials, examples, competition comparisons, scripts, email templates, objection-handling cheat sheets and more. All of this material will have them as prepared as your own sales reps to sell your product. 

6. Menawarkan ganjaran tambahan 

Although the commission they earn is enough reward, some people need more to get motivated to perform better. Additional reward systems for your best-performing partners can create 'super partners' which bring in a lot of value. 

If you work with multiple partners, there's likely a tier system for partners performing at different levels. So, depending on their tier, you can offer them tickets to exclusive events, advanced marketing support, strategic consulting, a premium listing in the directory, a feature in the newsletter and more. 

7. Manfaatkan platform perkongsian saluran 

When you're working with channel partners at scale, spreadsheets just won't cut it when it comes to keeping them engaged. You'll need a platform that can effectively have all your channel partners on one dash where you can see their performance and shortcomings and assort them into tears. With such a platform, it becomes possible to connect with your channel partners fully and even make it fun through gamification and extra rewards. 

A comprehensive platform such as Compass can take care of all your channel sales management needs and do it on a simple dashboard. Do Your partners need to do better? You can figure out the issue with analytics and find the best solution. The platform also allows you to celebrate and showcase achievements to others to keep the drums beating. 

Bagaimana untuk mengukur prestasi jualan saluran? 

Now that you have a channel sales strategy in place, it's time to look into how to measure the results of your efforts. Here are a few key indicators that show channel sales performance

  • Partner pipeline for the year: Assess the total expected revenue from partners over the year. 
  • Partner pipeline for the quarter: Evaluate quarterly contributions to understand short-term performance. 
  • Total revenue driven: Measure the overall revenue generated through channel sales. 
  • Attainment against forecasted expectations: Compare actual sales results with projections. 
  • Partner leadership scoreboards: Utilize dashboards and reports to visualize partner performance. 
  • Return on investment (ROI) of total marketing funds: Analyze how effectively marketing investments translate into sales. 

Implementing a robust channel sales strategy involves leveraging partner relationship management (PRM) software integrated with your CRM. This approach consolidates your sales data, making it easier to track performance and set individual partner goals. By doing so, you can streamline your sales process and enhance collaboration with new channel sales partners. 

Wrapping up with key takeaways 
Increasing sales with indirect channel sales partners are not easy, but it can happen with the proper time, attention, and solid groundwork. Here's our key takeaways to increase channel sales: 

  • Menyediakan cagaran yang sesuai kepada semua pihak berkepentingan, sama ada jualan atau pemasaran. 
  • Ensure your rewards system is laid out and consider utilizing a third-party company to establish and manage your channel sales incentive program. 
  • Pastikan anda mempunyai rantaian arahan yang mudah difahami dan talian komunikasi sentiasa terbuka. 
  • Ingat bahawa promosi silang rakan kongsi saluran sama dengan kejayaan semua orang. 
  • Fokus pada memupuk hubungan anda dengan rakan kongsi semasa anda sebelum menangani saluran baru. Sekiranya anda mengikuti langkah-langkah ini, anda akan mendorong lebih banyak penjualan saluran dalam masa yang singkat! 

Compass is the perfect sales & channel incentives solution for your business. Want to know more? Book a demo now. 

Soalan lazim 

1. What are the 4 sales channels? 

The four primary sales channels are direct sales, indirect sales (through partners), online sales (e-commerce), and retail sales. 

2. What is the difference between channel marketing and channel sales? 

Channel marketing focuses on promoting products through various partners and channels, while channel sales specifically refer to the actual selling of those products via those channels. 

3. What is a channel sales strategy? 

A channel sales strategy outlines how a company will engage with its partners to sell products effectively, including recruiting new partners, providing training, and implementing incentive programs. 

4. What is an example of a channel strategy? 

An example would be a technology company that collaborates with software resellers to distribute its products while providing them with marketing materials and training sessions to enhance their selling capabilities. 

5. What does a channel sales manager do?

A channel sales manager oversees relationships with partner companies, develops strategies for partner recruitment and engagement, and ensures alignment between the company's goals and those of its partners. 

6. What are the 5 steps of the channel management process? 

The five steps typically include: 

  • Identifying potential partners 
  • Recruiting new partners 
  • Onboarding and training 
  • Managing ongoing relationships 
  • Evaluating performance and adjusting strategies as needed. 

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