Direct vs Indirect
In the next posts, I will discuss Partner Management more in detail. If managed effectively, channel partners could be your largest accelerators of your business. Potentially, because it is not an easy task. I have noticed many startups and scaleups failed miserably here. Celebrating Partner Contracts followed by disappointments due to wrong expectations.
As a start, let me first address the main differences between direct sales and indirect sales e.g. using channel partners in your sales strategy.
Scalability & Investments
Even the big tech companies are using sales and channel partners. There is a good reason for: scalability. Recruiting, training and managing your own sales teams across continents require huge investments and have long lead times to be effective. Using channel partners will scale the business much faster, allowing the company to leverage and benefit from existing networks and customer relationships.
Control
Direct sales gives the company full control over the sales process, customer interactions, and branding. With channel partners you have to agree on mutual roles to mitigate your risks.
Expertise
You can leverage your product expertise with the industry and customer experience of your channel partners.
Customer Relationship Management (CRM)
One of the topics to discuss with partners is customer access and ownership. Compared to direct sales, working with channel partners will cause that you have less customer insights.
Sales Management
Working with sales/channel partners requires working on two pipelines at the same time. Primarily, your pipeline of channel partners from contacting potential partners to closing deals with customers from their network. Secondly, managing the customer pipeline of that partner, jointly or separately.
Companies in their early stages have no partner manager assigned. But scaling the business requires a dedicated person – and later a dedicated team – to manage channel partners effectively.