Channel partners hold nearly $1.5 trillion worth of unsold products at any given time. Indirect sales through those channels account for a large part of global businesses’ revenue, yet companies often struggle to find effective ways to optimise indirect sales. This difficulty arises from the fact that companies are not as closely connected with indirect resellers as they are with their internal sales team. Channel partners don’t work directly for the company making the product, so sales leaders often must use incentive-based programs rather than deliver direct orders to establish effective sales tactics and processes.
Two trends are changing the way that companies manage channel sales. First, the amount of channel partners reselling products has grown exponentially thanks to cloud computing, and channel partners sometimes lack the resources or incentives to report back timely and exact data. Second, many sales leaders have no structure in place to achieve visibility into the channel beyond quarterly reports from partners with total sales sums — they operate in near-total darkness. With this bare minimum of channel data, it is almost impossible for executives to make intelligent decisions about sales strategy.
Many organisations operate with the understanding that collecting detailed and accurate sales data is difficult and end the discussion there. But organisations that dismiss robust data collection methods as a lost cause miss out on a massive opportunity. Understanding exactly how, when, where, why and to whom products are sold via indirect sales channels has become an invaluable initiative for companies.
Companies that leverage channel data management (CDM) solutions as part of their overall channel strategy can boost performance immediately and in the long-term. The following five benefits can help sales organisations unfamiliar with CDM-based strategies get a grasp on why they’re so helpful.
1. Decision-grade data improves bottom lines
Timely, decision-grade channel data can reveal new methods for improving product sales. With decision-grade channel data, companies can better understand end customers, improve closure rates, offer faster and more accurate commissions payouts and align sales and marketing tactics more closely. As a result, it’s in a sales leader’s best interest to adopt strong CDM processes. Advanced CDM systems offer tangible results for companies willing to implement an effective practice. Companies that do so typically experience a 5 to 10% increase in total sales, translating into hundreds of millions of dollars in additional revenue.
2. Better customer targeting leads to additional opportunities
Sales strategies tend to be more effective when they can target detailed customer demographics. Detailed data on the individual buyers that resellers are reaching helps sales teams better identify and raise awareness about strategic customer market segments.
Many sales teams already have special programs to target specific customer segments, but those programs don’t always provide the level of detail needed to uncover additional opportunities. It’s important for CDM systems to identify the segments partners are selling to and effectively leverage that information. This more nuanced sales data enables sales teams to generate new leads and discover new up-selling and cross-selling opportunities with existing customers.
3. Intelligent parameters help raise conversion rates
CDM strategies can aid in identifying new up- and cross-selling opportunities. They can also provide the timely, accurate data needed to speed sales cycles and improve conversion rates. Robust CDM strategies do this by allowing sales organizations to specify intelligent parameters. These parameters help determine when resellers become significant enough for partner-program enrollment or when they need corrective attention due to sales volume decreases.
Timely, accurate information based on specific parameters can also speed up sales cycle time by identifying important leads and routing them to the channel partner with the highest probability to close the deal. Effective CDM strategy also empowers sales organizations to focus on new, up-and-coming reseller partners. With access to real-time channel data that identifies these opportunities earlier in the process, sales teams can improve conversion rates by stepping in to offer the correct support.
4. Timely information offers objective benchmarks
Real-time channel data from touch points like point-of-sale (POS) systems allows companies to better evaluate partners using objective benchmarks. For example, benchmarks can include specific sales volume over a given time period or a sales volume threshold. Once companies set these benchmarks, the can focus on programs designed to help resellers meet those benchmarks.
Additionally, sales organizations can compare how different resellers meet those benchmarks to see if there are markets where they can sell the expanded product line or cross-sell other products. Equipped with this benchmarked channel data, companies can more easily align marketing strategies and sales goals with motivating factors, such as incentive payouts. Sales organizations can then monitor execution against those plans, using their benchmarks, on a regular basis.
While most channel sales teams know who the most loyal partners are, they do not always reward the deserving partner with the appropriate rewards. Using channel data to establish benchmarks can help companies do this accurately and consistently.
5. Automated payment processes lower costs
In the world of sales, cash bonuses are often a channel partner favorite. When companies don’t have an effective sales credit and commissioning process in place, however, those payments are sometimes delayed or for the wrong amounts. These errors often result from an overreliance on time-consuming manual processes. With CDM systems in place, companies can better leverage information, such as point-of-sale (POS) or inventory data, to automate payments. Automated systems accelerate payments by facilitating claimless processing, as well as reduce administrative costs by eliminating erroneous or fraudulent claims.
Visibility should top sales organisations’ list
Delayed and inaccurate channel data has kept sales leaders in the dark for too long — the processes behind everything from customer segment definition to incentives systems were opaque and cumbersome. When trillions of dollars flow through indirect sales channels, it represent enormous opportunity that often goes unnoticed. It is clear companies can no longer turn a blind eye to channel partners, who have become an important part of the sales funnel. By implementing effective CDM solutions and practices, companies can achieve the visibility they need to uncover new opportunities, react intelligently and sell more products.