Find the Optimal Channel Business Strategy for Your Tech Startup

As a founder of a tech startup, you may think by yourself that how you can scale your business as fast as you can with minimum resources. This is a pressing question that every founder should ask him or herself. The fact is, as a startup your resources are very limited. How you can use this limitation as an advantage when it comes to your growth strategy?

As a startup founder, specially if this is your first venture, you have many options and choices when it comes to business model and go-to-market strategy.

You have many channels to offer your products and services. However, at the end of the day you have to sell! If there is no sales, there is no business.

Founders normally choose online sales platforms and indeed, direct sales force and setting up a team of ideally high performing sales reps, business development managers, account managers and pre sales engineers to start dominating the market.

However, when it comes to scale and growth strategy in new countries and new markets, scale will become a headache. There is only so many sales people can be hired. So, what is the next step after this?

And of course the answer is: Channel Sale.

The basic idea is in parallel to your field sales team, you start structuring 3rd party business entities (resellers, agents, value added reseller, distributors, partners etc.) to go to your target market and sell your products and services.

Seems great, right?!

It is absolutely a great idea, if executed properly.

There are many details and processes that you need to setup to make the program successful.Through a careful balance of partner planning, channel management and sales training, you can empowers your startup to stay ahead of the curve with channel management efforts.

Challenges of channel sales

You need to come up with the right partners so they can start selling your products as fast as they can. Normally before 90 days. This is one of the key challenges on who to reach out and what to say and what incentives you can give them and of course motivate them to sell.

Channel conflict and competition with your field sales team is one of the common issues and challenges when it comes to channel sales model.

The other point is, when a partner agrees to sell your products or services, does not matter that they will become a great partner.... or not! There is no guarantee that your selected partners that initially agree to work with you, will continue to thrive and become your high performing partners. High performing partners have very specific characteristics which make it challenging to find in the early days of search for partners.

Empowering channel sales partners to execute on strategy plans will be another challenge in terms of motivating sales and technical people at partner side to stay informed and be a raving advocate of your startup.

Why you need a channel strategy for your startup

The short answer is: leverage. You can leverage your partners resources, sales reps, pre sales engineers, marketing funds and brand name to build up a scalable repeatable business from the ground up. When it comes to complex b2b sales, you must have different teams and skillsets to come up with proper strategies and tactics to overcome the deal obstacles. With multiple buying influences and deals that involve a higher level of risk. A good sales channel strategy also offers a faster path to market, better market coverage and lower distribution costs.

But startups often don’t apply the same processes to managing a sales channel that they do to direct sales. They must remember that channel sales aren’t your typical buyer-seller relationship. Channel partners have a choice: they can sell your products or services, or they can sell the other product lines in their repertoire. With many options at their fingertips, your channel sellers will probably gravitate toward selling whatever is easiest for them to sell at the highest margin.

Improving sales channel effectiveness requires a well-defined sales channel strategy that optimizes your channel partnerships and guides them toward mutual profitability. With our sales management training, your channel sales team will learn channel sales best practices and channel selling strategies that lead to channel sales success.

Channel sales strategy best practices for startups

Too many sales organisations have recruited channel partners but haven’t taken steps to optimise their relationships through channel selling strategies focused on improving sales channel effectiveness. Following channel sales best practices can drive more productive and profitable alliances:

You need to setup processes to minimize channel conflict: Create a process for partners to register deal opportunities to maintain fair, consistent channel sales engagements. Be very transparent with them on what processes are in place and why they are there. Explain the rational behind every decision you make. Even if it is not to their benefit.

Conduct reviews with channel partners: Quarterly Business Reviews (QBRs) Ask channel salespeople to report what happened during the sales process, including which buying influences they worked with, what the prospect’s goals were and what sales tactics they used for wins, losses and stalled sales, so you can identify the factors that led to winning and losing, leverage the partner’s strengths and avoid their weaknesses.

Have strong communications with channel partners to review your support: Interview your partners about the sales enablement services that you currently provide and opportunities for improvement and any gaps.

Help channel partners with lead generation and marketing: Ensure that your partners have the leads they need to grow the business. Many partners are looking to have these types of leads not because they are lazy. However, they want these leads to start learning how to market and sell your products and services.

At the end of the day, setting up a channel sales strategy is a mindset and commitment. If you are strongly believe that this is the way to scale, please have a look at my program on how to start this for your startup.

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© 2020 by Houman Asefi