Contributors from members of the Copper team
You need continuous sales to keep your business afloat. But your sales team is already set and you have a limited budget for hiring more reps.
What do you do to boost your sales potential?
Many companies turn to channel sales to scale their sales team in a budget-friendly way.
Before we go further, let’s define channel sales.
Channel sales definition: Channel sales is the process of selling your product or service to consumers through another company. In essence, the other company sells your product for you during the sales process.
Think of a company like Mailchimp.
They sell their software directly to many companies. But they also have partner agencies that sell Mailchimp software to their clients. The agencies are essentially selling the product on behalf of Mailchimp.
That’s a type of channel selling. And it can help your company sell a lot more without hiring more salespeople.
Let’s take a look at how it works.
Why you should consider channel sales:
Partnering with channel sellers has significant advantages. Effective partnerships let you scale your sales operation without hiring more reps. A single channel sales manager can open many new avenues for selling your product or service.
But why is channel sales and potential partners so effective in increasing your sales and potential partners?
The short answer is this: channel sales takes advantage of already established relationships. Your partners have clients, marketing programs, and sales processes in place. They know what works with their customers.
Those companies have already experimented with marketing strategies, distribution channels, and value propositions—and they can turn those into easy sales for your company.
In exchange, you provide payment, the product or service, selling support, and other benefits of a partner relationship throughout the sales process. You’re not just getting someone to sell your product for free when you choose channel sales.
But because you can harness the power of established companies that know what they’re doing, you get a huge sales boost for a fraction of the cost of scaling your sales team.
To make this happen, you need to realize one core truth about channel sales:
Use your relationships to provide value.
It’s the relationship era, and tactics like team selling and channel sales are becoming increasingly important.
The exact nature of the relationships differs between companies and partnerships. But it always comes down to this: your partners take care of the relationship with the customer. You assist your partners to provide value to the customer.
What kind of assistance might you provide as a sales rep?
One of the most important factors is channel sales enablement. Like standard sales enablement, this means getting your channel partners the resources they need to best do their jobs.
Can you help them with sales collateral? Recommend a marketing strategy and sales strategy to prospective partners? Answer technical questions? Providing this support will make your relationship more profitable.
If you are a sales rep, sometimes you have to solve problems with the channel partner, too. If they’re not motivated to sell your solution, you won’t get the benefits of channel sales relationships. So you need to make sure they’re excited to sell your product or service.
All this maintenance with prospective partners requires a commitment to success in channel sales—and a strong outreach program. We’ll talk more about actively managing your channel sales relationships in a bit.
First, let’s talk about how to create those relationships.
How to create a channel sales strategy:
Before you start recruiting channel partners to help with sales, you need a strategy. Approaching potential indirect sales partners without a clear idea of what you’re offering takes more effort and may net you worse results.
So it’s worth taking a few steps beforehand.
1. Start with your goals.
What are you hoping to accomplish with this channel relationship beyond just strong sales? Do you want to increase sales to your current customer base without scaling your sales team? Break into a new market? Replace your in-house sales team with a completely channel-focused model?
All of these are fine goals—but you’ll approach channel sales partners differently for each. Understanding what your company needs will make the rest of the process easier.
2. Identify what you want from your partners.
There are different levels of indirect sales that you might pursue.
An affiliate program, where you offer a referral bonus, is one option. Reselling, where a company buys your product and sells it at a profit, is another. There’s also white-labeling, where a company sells your product as their own. Or you might work with a company to sell a co-branded solution.
You can also offer combinations of these systems to give your partners more options. Or you might come up with a unique solution that works well for your business.
These are all profitable models. But you need to know which one you’re offering before you start recruiting partners. You’ll pitch them differently and offer different benefits.
3. Outline what you’re offering.
How much will you pay channel sales partners? Other companies aren’t going to sell for you without getting paid. Once you understand exactly what you’re paying for, you need to know how much you’re going to pay.
Look into what similar companies offer in their partner programs and use that as a guide to what you might pay. It’s not always easy to find this information, but getting in contact with potential partners might give you an idea where to start.
This works for B2B as well as B2C. See how Unbounce clearly notes on the program’s homepage that their partners will earn 20% of the revenue they make for Unbounce.
4. Plan how you’ll help.
Every good relationship provides benefits for both parties. Beyond pay, you need to offer support. Sales collateral, marketing ideas, marketing execution, tech support, customer service tips, and anything else you can provide will be a big help.
Telling potential sales partners how you’ll help them will alleviate some of their concerns. So plan out what you’ll say in advance.
Once you’ve decided on these factors, you can start building relationships. As with any strategy, you make changes as you go along. You find what works and what doesn’t, and tweak your offerings and asks.
But right now, you’re ready to start reaching out to potential partners.
Start building channel sales relationships.
Both inbound and outbound marketing efforts are great ways to attract channel sales partners. But there’s an important thing to remember when recruiting partners: you need to solve their problems. Not their clients’ problems. That comes later.
Let’s say you’re selling a marketing platform that makes it easier for companies to market their app. And you want to find app developers to sell your platform to their clients. If you’re using inbound methodology, you might think that writing an app-marketing guide would be helpful.
But that’s not going to get you channel sales partners. That’s going to get you customers (which is a good, but different, goal).
A guide to finding app development clients would be more useful. That will attract app developers to your site, where you can engage them in a conversation about channel sales partnerships.
Every channel partner strategy should take into account the specifics of each partner.
Tailor outreach for inbound and outbound prospects.
Using inbound marketing, you can build an email list of companies potentially interested in partnering with you. And with outbound prospecting techniques, you can create a separate list of potentially interested partners.
Keep a problem-solving mindset for both. If you reach out with an offer that helps someone do their job more effectively, they’ll be interested in hearing more about the opportunity.
This is when finding channel partners shifts from a marketing activity to a sales one. You need an employee (possibly a channel sales manager) to present the advantages of working with you as an indirect seller.
Focus on the value you can provide both to the seller and to their clients.
Notice how the copy talks up the benefits for both the channel sales partner and their clients.
Make it easy for channel sales partners to get started.
If you’ve spent time detailing your channel sales partner program, you’ll have an idea of how onboarding should go. Show prospective partners the steps to getting started, and remove as many barriers as you can.
A partner portal is a great way to do this. You can include all the information on what both parties need to do, how they can access your product or service, and how to actually sell to their clients.
Focus on improving this step with every channel sales partnership. What got in the way of starting the partnership last time? What information would be beneficial to have up front?
Actively manage channel sales relationships.
Because channel sales is all about relationships, it pays to maintain great relations with your partners. You can’t sign someone up for your partner program and expect them to do all the work.
Instead, you need to stay in close contact. What problems are your partners running into? Are they finding a lot of success with a certain sales pitch? Do they get a particular piece of feedback often? All these things might come up, and you can take action when you’re in contact with your partners.
Whether you decide to use email, phone calls, or even in-person visits is up to you. But the most successful channel sales relationships require frequent communication.
Having a channel sales manager is especially valuable when you’re in the maintenance phase of your relationship. If you have more than a handful of partners, keeping them updated and providing assistance can be a full-time job.
Offer help when you can.
Early in the relationship, it pays to show your partners that you value them. Provide them with marketing resources, help them optimize sales scripts, or put them in touch with your own contacts that might have use of their services.
Be sure to make yourself (or your channel sales manager) available to offer assistance whenever possible. This is especially valuable early in the relationship when your partner may have questions about your product or service.
Treat partners like partners, not resellers.
While reselling is a type of channel sales, there’s a certain reputation to this type of relationship. Client-vendor relationships are often driven by one party or the other, depending on who has more power.
Channel sales relationships are best treated as a partnership. Offer good terms to your partners. Listen to their feedback. Help them whenever possible. Don’t think of it as doing them a favor and helping them earn more money—think of it as going into business together.
A big part of this is simply expressing your gratitude. Thank your partners for the work they do. Celebrate their successes, whether related to your business or not. Being invested in and truly believing in your partners will make a huge difference to your relationship.
In the end, you’re working together to provide value for each other. Add value where you can, and you receive value in return.
Use compelling incentives.
Why should a company partner with you?
You might think the answer is obvious, but that’s not going to cut it. Potential partners need to get something out of the relationship. And if you want to keep them as a partner, it should be something that they don’t get from anyone else.
It might be something as simple as offering a better incentive program. That might mean larger payouts for referrals or sales. But you can also go beyond that. Some companies offer non-cash rewards, too. Could you give your software away for free to channel sales partners? Or get them a good deal with another one of your partners?
Every incentive program is unique, and companies will be motivated by different things. Take the time to figure out what will be most appealing to your potential partners. And if you’re not sure, ask them.
Send an email to your list asking what problems they need solved. Or what would make an appealing partner program. You can even ask what they’d expect from such a program.
Continually improve your channel sales relationships.
Channel sales relationships are always a work in progress. Keep an open mind and open lines of communication.
Your strategy, outreach schedule, incentives, and other parts of your channel sales relationships will evolve over time. You’ll find that some strategies work better than others. Double down on those and you’ll maintain an effective, profitable channel sales model.
Want to read more about team selling? Download our free ebook on Strategies for Team Selling in the Relationship Era.