sales, partnership, saasThe owners of our company (SaaS software for Life/Annuities/Health insurers) have decided that they won’t build any sales capability but use “channel partners.” While we have some large partners they are essentially BPO/TPA plays or software plays or both. So, it is almost like working with a “frenemy.”
My questions are a) are there examples of successful partnerships of this kind b) what are some of the best practices to make sure that such arrangements are successful
Thanks
a) are there examples of successful partnerships of this kind
Not many, if any at all. At least not long term. Indirect sales are a great means to expand sales after bootstrapping them and figuring things out as you do. Particularly if your partners are providing value added services on top of what you’re doing. But your company should be equipped to be the one that packages those partners in a deal with them as a value added service providers. And whatever you do, you need direct interactions with your clients to stay up to date on your client requirements - for that reason alone, you need a marketing and sales force no matter what you do.
b) what are some of the best practices to make sure that such arrangements are successful
Basically: don’t. Seriously. You want a direct relationship with your clients as much as can be. Particularly large ones. It’s strategic. If you’re a cog in a supply chain, your “channel partners” will eventually seek out alternatives and offer them to your prospects instead. That puts your business in a position where it’s not in control of its own destiny, and you most assuredly don’t want that to happen. The only workaround is to have a proper sales force.
Once you’ve product market fit, your company’s marketing and sales forces are the wings that allow it to fly. Give them no love and you’ll end up with crooked wings. Like a dodo.
In B2B, there are plenty of companies who sell direct, plenty who only sell via resellers, and plenty who do both. Let’s ignore both/and, and consider direct vs third party channel sales.
You’re in a big, specialist market. Selling direct keeps all the reward, and maximises your learning opportunity. It also puts you in competition not only with direct alternative solutions, but also with anyone who sells into that industry and may feel threatened by your presence. And you need to commit time, energy, cash and patience, and to recruit, motivate, manage and retain excellent business developers.
If you choose the third party route, you will be supporting people who are already selling in to your target market. These people mostly aren’t business developers, they’re into customer relationship development. So you’re going to have to give them a lot of support, because they don’t know your product. And you’re going to have to be very clear how they’re going to be motivated, targeted and rewarded. What do you gain? You focus your efforts not on thousands of potential customers, but on tens of sales people who have established customers already buying from them and target accounts they want to activate.
They’re valid choices. And some of the work looks just the same. You’re going channel, so you need to focus on becoming experts in being a great partner. The good news is that it’s easy, way easier, to hire channel sales and marketing staff than to build a team of new business developers.
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