Sales Strategy: Distribution via Channel Partners

We interview Technoport 2016 speaker Jennifer Vessels about how to distribute through channel partners and organising your sales force.

Technoport invites all the ambitious entrepreneurs to a High Value Sales Strategy Day on 3 March in Trondheim. Designed for Entrepreneurs, CEOs and senior sales executives from innovative, fast-growing technology-based companies, featuring case studies and lectures, interactive discussions, participants’ presentations, “hands-on” exercises, and the opportunity to practice elevator sales pitches to potential customers.

Last time we were talking with serial entrepreneur Ken Morse about how important sales are for startups. Today we interview another Technoport 2016 prominent speaker Jennifer Vessels about distribution through channel partners and organizing your sales force.

Jennifer is CEO of Next Step, a Silicon Valley based global consultancy. Since 1997, Next Step’s team has led successful revenue growth for global companies including Adobe, Cisco, Google, Ticketmaster and many Nordic companies including GiPS, TiFic, Opera, BMenu, Nevion.

The interview is done by Katja Samara, a huge Technoport-fan, CEO and founder of Insight Sales AS and a marketing and sales professional increasing sales and developing new markets for 17 years.

Katja: Jennifer, we are looking forward to seeing you in Trondheim. You and the Next Step team have over 30 years experience maximizing results for entrepreneurial companies as well as global enterprises such as Cisco, Adobe and Google. As leaders of mid-size to large enterprises join the Technoport audience, we are excited about the opportunity to learn more about your and Next Step’s practical approaches for scalable company growth on the Sales Day in March.

In the meantime, we would like to talk about ways to achieve scalable growth from initial market entry through global multi-million NOK revenues through use of channel / distribution partners.

Future interviews will provide tips to building a streamlined sales team and structure as well as highly effective sales management approaches. With your experience leading Tandberg’s international growth in the 90’s through to Next Step’s success with Cisco and Adobe, we really look forward to your insights.

Can you tell us a few words about what "distribution through channel partners" is, and why a company should consider it?

Jennifer: The key to successful growth for all companies is reaching more end customers.

Distribution through channel partners is simply ‘reaching end customers through building a  relationship / partnership with other companies that are already doing business with your ideal customers.’

Whether your company is a small company entering the market or a mid-size company to new levels, gaining potential customers is difficult. Marketing to gain contacts, develop credibility and sales can be very difficult. However, the companies that are your ideal customers are most likely already buying products or services from other companies - which could become your ‘channel partners’.

By understanding how and from what companies (or distributors or service providers) your ideal clients already buy other product or services, you can evaluate and decide on the best ‘channel strategy’.  Building a relationship with the organizations that your customers already trust gives your company access to and credibility with your ideal customers.

The right approach for your company?

Katja: How should a company’s management team evaluate ‘channels’ as a sales approach?

Jennifer: The best way to determine the sales (and possible channel) strategy that is best for your organization is to talk with your current or potential customers about how they purchase products and services similar to what your company offers.

Then, learn about the companies that they either purchase from and / or have existing frame or service level agreements with. Your goal is to identify ways in which your offering can complement the potential partners’ current product line.

When your product is offered by the channel partner and / or packaged within their offering you can more quickly and easily acquire customers and leverage in new or existing markets. 

Katja: Is a channel approach a good strategy for a startup or only big companies can handle the complexity of it?

Jennifer: In many ways, for a startup or small company seeking growth, defining and developing relationships with ‘channel partners’ can be the best Go to Market approach. As an unknown company without proven customer success, it can be difficult and costly for a small company to build credibility and trust with end customers. By leveraging and being seen as part of the solution set of recognized and trusted supplier of other products and services, the startup can win accounts and market traction.

While a channel strategy requires channel development and sales personnel to provide insight and assistance to the end customer, succeeding in this model is less costly and often less prone to failure than building a direct sales team.

One single channel partner may have 5 – 5000 sales people (for whom the channel organization is responsible for hiring, training, developing and compensating).  By building a relationship with this organization, your company can access these resources – without the cost and risk of building a large sales staff.

Success in a channel sales strategy does require investment in  channel management skills, compensation models and partner programs. While this can seem complex to those not accustomed to an indirect sales model, as we have seen with Tandberg, Cisco, Adobe and many smaller companies, best practices and patience with a channel strategy can really pay off.

Leverage channel partners for scalable growth

Katja: In Next Step’s work with both Cisco and Adobe one common objective to leverage channel partners to expand their market and penetration. What are the key elements of every Channel Management Strategy?

Jennifer: The most critical factors required to successfully engage and leverage channel partners for scalable growth are:

  • Identify the areas in which your company can provide added value to the partner through additional revenue, differentiation and customer loyalty.
  • Make it easy for the partner to market, sell and implement / support your company’s products.
  • Minimize the risk the channel organization is taking to represent / sell your product through training, support and sales enablement.
  • Demonstrate ways in which your offering improves the partner organization’s revenue, profitability and achievement of organizational goals.
  • Patience – building channel relationships is like growing a garden – you as ‘the vendor’ plant the seeds, water, take care and keep believing in the benefits. One day you will then see rapid growth in channel sales as a result of your efforts.

Katja: What is the role of the channel partner in customer satisfaction?

Jennifer: For many enterprises including Cisco and Adobe, the channel partner is the face of the product / solution to the end customer.  As products (especially technology-related) get more complex, many organizations prefer to have one vendor or ‘service provider’ responsible for selecting, testing, integrating and supporting all of the components of a solution.

In fact, as companies streamline their management team, the role of and trust in a ‘service provider’ which is held accountable for ensuring the company has the best solution available at any time has expanded.

Therefore the channel is ultimately the best solution to drive customer experience and service end customers.

Katja: How can a company (vendor)  avoid conflict between the company's own sales force and external channels?

Jennifer: This is the most important and difficult factor to achieving long term success with channel partners. Keys to overcoming this potential issue include:

  • Agreement across the company’s management team that development and success of the channel is a priority.
  • Hiring of channel managers and territory sales people who have experience and skills in channel development / relationship management (not direct sales people).
  • Sales compensation and financial incentives to support and reward channel sales (even if the ‘lead’ or account was initiated by the company’s sales personnel.
  • Implementation of tools such as Deal Registration to track and reward channel partners’ market development activities.
  • Strict adherence to a ‘channel first’ mentality in which opportunities to provide value, benefit and revenue to the channel are prioritized.

Katja: Thank you very much Jennifer, for making it easy for our readers to understand the essentials of channel strategy. One really cannot put a price on a wise advice from a professional with many years of practical experience. We all are looking forward to participate in your workshop on 3 March.

Get more high value sales advice at Technoport 2016

For our readers: All the Technoport participants can sign up for the High Value Sales Strategy Day on 3 March. This is an interactive event with real life exercises where amount of the participants is limited to 75. Registration will be closed when event reaches 75 participants.

For general information and questions you can contact Katja Samara at, +47 40 03 51 71, or / +47 92 40 94 39.

If you are already registered for Technoport, send us an e-mail and we will register you for the High Value Sales Strategy Day.

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