Product or Technique? The "Roadmap to Success"

In the world of Channel sales, just about every independent sales Agent operates with multiple products in their sales kit.  Regardless of your industry, the product set will typically range from entry level services to the most cutting edge technology available, paired with everything in between.

So how does the Channel Sales executive convince the Agent to sell their product over someone else's?

A lot of factors can play a role in this decision.  Let’s examine a few…

1.       Residual Income – just as in direct sales, the amount of commission to be made in the comp. plan will drive what the Agent sells on a regular basis.  If the Agent makes 20% residual on Widget A and 7% on Widget B, he/she is going to sell Widget A whenever possible.  Simple 

2.       Support – Support from the Channel team also plays a critical role in the Agent’s decision on who’s product  to sell on a regular basis.  If the sales support on Widget A is better than that received on Widget B, easy decision.  It becomes complicated when Widget B provides exceptional support while the sales team support on Widget A is less reliable or even non-existent. The extra sales support makes Widget B easier to sell, and becomes a viable option as you should close more sales with Widget B, offsetting the lower residiual number vs. Widget A.

3.       Customer first – We hope every Agent sells with the best interest of their customers in mind but we know that is not necessarily the case.  Many times the products are driven by Factor #1 (residual Income) rather than customer needs.  It’s unfortunate, but it’s reality.

4.       Training – the amount of training provided by a Channel team can be critical in persuading an Agent to choose one supplier over another.  If you take the time to visit your agents, train them on the latest product offering your company has, and arm them with customer success stories and references, it helps build confidence in your business model and will drive more opportunities your way.

So with all these factors plus many more in play, is it best to confront the factors head-on or try another proven method to drive business?

IMO, accepting the fact that your Agents are going to sell other companies’ (even your competition) products is the first step to being successful in the Channel.  Trying to convince them to do otherwise simply doesn't work.  Once you understand the model, how you adapt your business model to the competition is critical.  

I have found developing a “Road map to Success” by using your product and illustrating how the Agent can add your product line to every potential sales opportunity they come across is the quickest and easiest way to grow business with your Agents.  By developing and training your Agents on a technique to put your offering in front of every prospect, you will see more interaction and more sales revenues.  The key is to differentiate your product by highlighting your advantages over your competition and illustrating why only your product will fit the “Roadmap to Success”, close sales quickly, and make more money.

To learn more about my “Road map to Success” and how I have successfully driven more business by integrating a “Road map” approach, drop me a note at dave@davehanron.com.  Happy to share my thoughts. 

Have a great “Road map” in place already? I'd enjoy sharing your comments with my readers

Sales exclusivity – Does it limit potential or add value?

Having been in a variety of senior sales and sales management positions over the past 25 years, I’ve worked in and managed both direct and channel sales groups.   In both cases, one major decision always seems to pop up……this issue of “exclusivity”

What exactly does the term “Exclusivity” refer to in sales?  The term really can have a double meaning in sales agreements.  

In one case “exclusivity” can be granted to a sales person or company to be the only person authorized to sell a certain set of products, or be the only authorized sales agency in a specific geographical region.  This could be a state, county, country etc.

The second definition can be written where a sales person or company can only sell one manufacturer’s product line, thus becoming an “exclusive” agent for a particular vendor.  In return for accepting this type of arrangement, the sales agent can typically negotiate favorable terms and pricing for the product.

But is “Exclusivity” hindering the sales organization’s success?  That is a debate that has been going on for years and will continue for the foreseeable future.  I have witnessed organizations who sell only one product or brand become highly successful and profitable.  Unfortunately, I have also often seen these relationships sour as technology passes by the product, or competition developing a better, more price competitive product.  

Just recently, the drug manufacturing company Merck lost it’s “exclusivity” to sell the drug Singulair when it’s patent expired.  According to NASDAQ.com, Merck & Co. “reported a 49% decline in second-quarter profit, as the drug maker continues to feel sales pressure from patent expirations”.  This is a big impact from the addition of sales competition to the playing field.  Obviously a positive In making the case that “exclusivity” helps drive increased profits.

On the other side of the fence, being an “exclusive” agent limits your options to a present to a potential customer.  While price limitations is an obvious result of this situation, consider other issues:  your prospect may have had a bad previous experience with your manufacturer, your product may not have the right features, your install or delivery requirements may not fit, or the prospect may just like to make a choice rather than be “sold” on a solution.  In any of these situations, “exclusivity” can hurt your sales efforts and can often lead to a lost sale.  If “exclusivity was good for business, Walmart would carry one type of vacuum, one brand of potato chips, one brand of laundry detergent, and so forth.  We all know they don’t, and they are America’s largest retailer.

So at the end of the day, is “exclusivity” worth it?  Still up in the air but it’s fun to discuss.  Personally, I think limiting yourself to one type of anything is a bad idea.  After all, how many of us  own more than one car and have all of the same type of vehicles in our garages and driveways?   There are 4 cars in my family, a Cadillac, a Toyota, and 2 Chevy’s.  And yes, I have 3 different brands of HDTV’s too!

So much for “Exclusivity” in my family!

How about you?