Dear Blog Readers,

Thank you for your support and comments during the past three years on my blog.  I am very appreciative that we have over a thousand readers so far.  Please be aware that I have recently built and launched a new website in Drupal.  I invite you to visit the following link and read my blog postings there.  If I have time I will replicate them here as well.

Here is the new link directly to the blog section.  

http://www.g2strategicadvisoryservices.com/blog21stcenturysalesandmarketingadvicebydavegovan

Thanks again.

Best Regards,

Dave 

It’s been awhile since my last blog post in my series on establishing credibility when selling new products. Although I’ve had a very busy Quarter, I’ve been dying to continue the series which is why I’m writing this at 1am.  I hope you enjoy it.

Fairly early in our careers we learned that it is not smart to “burn bridges” in our personal and professional lives.  As a result, most successful professionals take great care to nurture their professional relationships and view their relationships as assets. 

An individual who has established a positive reputation within their profession in the workplace has done so because they have proven to be reliable, dependable, trustworthy and proficient at their job as an executive, manager, employee, vendor, partner or customer.  They have enhanced their professional brand equity as a result.   In other words they have established credibility within their circle of business contacts, colleagues and friends.  Other individuals trust that a trusted or credible individual will not act in ways that would diminish their own reputation or the reputation of their company.  Nor would they risk damaging their reputation and relationships within their professional network.   This reminds me of my Grandmother telling me at an early age that no one can ever take away your good name unless you help them.

There is no question that when my professional network overlaps with the professional network of the individual I am interesting in speaking with on behalf of my business or a client, the conversation is scheduled sooner and tends to flow easier with better results.  It’s pretty obvious it starts off better because neither party wants to offend a professional contact of one of their contacts or in some cases a friend of a friend.  And as long as one conducts oneself with courtesy, the process can advance to determine whether perceived synergies exist or not.  The other positive aspect is many astute professionals realize that an ever expanding network is a great thing to have and the only way that happens is by meeting new people.

Now back to the title of this blog post - Leveraging Your Professional Network to Establish Credibility for Your New Product.  It is my opinion that the same principle I cited above applies when a founder or a sales professional tries to sell a new product for a new company or an established company.   This also explains why sales professionals in established companies don’t simply run out and try to sell all of their existing customers every new product their company releases.  They tend to experiment with one opportunity or hold back while another sales rep is experimenting since they don’t want to lose credibility in their accounts if things don’t work out.  This is why management sometimes offers higher commission rates on brand new products as an incentive to sell new products.

What if you don’t have any established accounts because you are leading or selling for a brand new company with all new products?   Regardless of whom you are selling for and what you are selling, you have to sell yourself first, then your company, then your product.   Buyers tend not to buy from individuals they don’t like/trust or from companies they don’t like/trust or products they don’t like/trust.  If we flip this statement around, we see that Buyers tend to buy from individuals they like and trust.  This is of course easier if you have successfully done business with the buyer before, but if you haven’t you can still leverage your professional network.  My recommendation for building pipeline for a new product in a new company is not to try to sell the product to everyone in your rolodex or network but to leverage your network.  What I am advising is the following:  Once you have uncovered the use case where your product delivers the highest value proposition, map the use case to specific job titles that correlate to the prime suspects who have the highest propensity to buy the product.  Once you have the job titles you can map them to company size and vertical industry to create your list.  Once you have your target list, I suggest going back to your rolodex and prioritizing your prospecting efforts according to overlap with your professional network. 

Further, you probably know how to do the following already but just in case you don’t, here is a simple example for how you can accomplish this using LinkedIn.

1.       On the top right hand side of the LinkedIn Page, next to the Search Window is the Advanced button next to the icon of the magnifying glass.

2.       Click on the Advanced Search button.

3.       Enter the title you are searching for in the Title window and Click - Search.

4.       If you have the right level of service from LinkedIn then LinkedIn will list next to In Common the Shared Connections and Shared Groups you share with the Contacts that were returned in your list.  LinkedIn also lists them according to their proximity to your contacts. i.e. 2^nd, 3^rd, etc.

5.       Once you have this data you can decide whether to ask your network contact to introduce you to the individual you desire to speak to or you can contact them directly.  As you can imagine the former works better.

6.       The above also works for Company searches.  Sometimes I have to ask one of my network contacts if they know anyone within a particular company or find it out on LinkedIn and speak with the friend of my friend to find out the right person to speak with inside their company.  I also recommend asking that person for an introduction since their introduction will be better received than your “cold” call.

The above approach is useful for gaining an introduction, connecting and obtaining an initial conversation, however, keep in mind that unless the use case for your product is needed by the individual to solve acute pain within their job responsibilities, you won’t be able to sell your product.  Assuming the need exists and your product offers value to the buyer, then your ability to leverage your positive reputation within a shared network even once or twice removed should overcome most vendor credibility obstacles unless the transaction has the stigma of extreme risk for the buyer due to its’ size or nature.  Best wishes for your continued success. 

As we continue our series on establishing credibility in the technology sector, I would next like to bring attention to establishing credibility by hiring the most proficient employees.  

A person is proficient when they are competent or skilled in using or doing something.   A person is most proficient when they are very experienced or very skilled at it.  Of course everyone merits equal value as a fellow human being, however, certain humans tend to be more proficient at particular jobs or professions.  We all know that’s the way life works.

Since technology buyers interact with a variety of companies on a regular basis they experience varying levels of proficiency.  If the people you have staffed in Sales, Marketing, Support, Consulting, Product Management and Engineering are very experienced at performing those job functions and have demonstrated an impressive track record of success in the past, the credibility of your company will be much higher in the eyes of Prospects.  If they aren’t, Prospects will be able to tell and become more risk averse to your new product or new company.  

What do I mean by very experienced?  

If an employee has one year of experience in a particular job function in general they would have at least 2,080 hours of experience.  In five years 10,000 hours, ten years 20,000 hours, etc.  I know this calculation is simple, however, it illustrates the point well.  If a person has been successful in a specific job function for at least five years they would have over 10,000 hours of experience.  I mention specific job function because that really matters.  Just because someone was a successful individual contributor doesn’t magically make them a successful manager.  And just because an individual was successful in channel sales doesn’t mean they are going to succeed in direct sales, and so on.  If a person has spent over 10,000 to 20,000 hours successfully performing a job function you can bet that in most cases they are going to be most proficient for your company and help expand your credibility.

One caveat to the above is when staffing for entry level positions it is possible to find highly skilled less experienced individuals who perform outstandingly.  When you find one of those individuals I suggest you hold on to them as long as possible.

One of the biggest challenges for young companies is experienced and successful employees tend to come at a higher cost.  This doesn’t mean that the most expensive employees are always the most proficient employees.  If you are able to find a great value then that’s wonderful.  However, if you find yourself in a situation where you’ve hired less proficient employees you should think about making changes and hire more proficient staff and / or leaders.   I’ve always found it interesting when companies justify saving twenty or thirty thousand dollars a year on a sales hire’s salary only to wind up with a barely proficient sales resource that produces a much lower yield than a more proficient sales resource.

The bottom line here is the most proficient people are viewed as the most credible, and if your people are highly credible then your company is going to be viewed that way and your new product will be easier to sell because a buyer’s aversion to risk will be lower when interacting with highly credible people.

For more reading on hiring more credible professionals I suggest the following two sources:

A great blog post by Ben Horowitz on Hiring Executives: If You’ve Never Done the Job, How Do You Hire Somebody Good?:

 http://bhorowitz.com/2010/10/14/hiring-executives-if-you%E2%80%99ve-never-done-the-job-how-do-you-hire-somebody-good/

And Chapter 20 of my book shares an effective method I developed for evaluating and staffing the best sales resource fit for your needs.

 http://www.amazon.com/Crisis-Enterprise-sales-professionals-economic/dp/1442196459/ref=sr_1_3?ie=UTF8&s=books&qid=1288877926&sr=1-3 

If you need more assistance in this area G2 Strategic Advisory Services offers a service to assist technology companies on establishing the most effective hiring criteria and staffing sales professionals for a company’s unique needs.  

For more information please email dave@g2strategicadvisoryservices.com or phone 1.800.974.2230.

As we continue our series on establishing credibility “bricks” for new products let’s start with a germane question.

How is it possible to convince risk averse buyers within risk averse companies to buy a new and unproven product from an established or emerging company?  

Our first blog post in this series discussed how a vendor’s first customer references are a highly effective credibility “brick” and a great contributor to accomplishing the above.  But what if a vendor lacks references?  Perhaps because the vendor missed an opportunity to execute a customer beta program for some reason. What then?  

Whether you have customer references or not, another important credibility “brick” is establishing professional credibility to gain trust.  We all know how important trust is when it comes to building personal and professional relationships.  Obviously few human beings are comfortable interacting with other humans they don’t trust.  Even more so, it is highly unlikely a person will spend a significant amount of their budget with a company or person they don’t trust.  If this is the case then what is the most effective way to establish credibility and gain the trust of prospects?

Professional credibility can be established in a number of ways, however for vendors selling a new product, I believe the three most important areas to focus on are:

Reputation: what a buyer hears about a vendor.

Communication: what a buyer reads, watches, or listens to as communicated by a vendor.

Observation: the experience a buyer had through interaction with a vendor.

Let’s expand on each of these further:

Reputation: Vendors can leverage the strength of the professional backgrounds of the founders of the company and/or creators of the product within their field of expertise.  Subject matter expertise can be a powerful credibility booster. Vendors can also leverage relationships with former coworkers and others from within their professional network.  Having someone a buyer already respects vouch for your credibility can significantly boost your credibility going in.

Communication: After gaining access communication increases.  Vendors begin to converse with buyers to initially qualify opportunities to identify alignment of the buyer’s acute pain with the vendor’s solution. This communication may take place over the phone and/or in person.  Prospective buyers also begin to visit vendors web sites, read literature, engage in conversations with one or more individuals and perhaps receive a product demonstration.  

It is very important for vendors to keep in mind that each and every touch point described above is an opportunity to gain professional credibility as well as lose it.  The buyer will be focused on:

• The quality of the vendor’s writing in their email exchange
• Whether the vendor looks and acts professional
• How well the vendor listens
• How responsive and accountable the vendor is
• If the vendor comprehends the buyer’s problem  
• The depth of experience the vendor has at solving the problem either in the vendor’s current company or in past jobs
• How articulate the vendor sounds
• How knowledgeable the vendor is about the buyer’s issues, business and industry  
• The quality of the vendor’s web site, product literature, product spec. sheets, etc. 

Observation: Actions speak louder than words and buyers pay close attention when observing what vendors actually do versus what they said they were going to do.  As buyers begin to evaluate potential solutions they begin to interact with multiple vendors and observe how each of the vendors perform.  They observe each vendor’s overall responsiveness in a number of areas:

• Speed and accuracy of responses to specific information requests
• Performance of each product in a product demonstration or evaluation  
• Support provided during evaluations
• Willingness to provide price incentives
• Flexibility with contractual terms

Performing well in each of the above areas is an opportunity to gain trust and establish professional credibility as you work toward building a solid foundation of credibility "bricks" for your new product or new company.  Smaller companies should note that if they are able to outperform larger competitors in the above areas as well as sell at required levels within an account, in many cases they will win.  While professional credibility alone will not close a sale, it is an important credibility "brick" that can contribute significantly when selling a new product for an existing or emerging company.

A Cornerstone is the first stone set in masonry construction and is the most important since all other stones are set in reference to this stone. Therefore, the position of the entire structure is determined by how well the Cornerstone is laid.

Hopefully this is not too much of a stretch but when it comes to establishing credibility in the market place I believe the metaphorical equivalent of a Cornerstone is the first set of customer references for your new product.  Whether it is a new technology company launching their first product, or an established technology company launching a new product, your first reference customers are as important as a Cornerstone.  

I like this metaphor because your initial reference customers contribute to ensuring your new product is aligned with the requirements of the market. Your first customers provide critical input on how the product should be best designed, implemented, and used.  This input benefits every function of the company as all departments can learn how real world customers react to all aspects of your new product.  I have found the best way to recruit a company’s first customers for a new product is through an effective Beta Customer Program.

 Examples of questions that can be answered during a Beta Customer Program:

1. Are the use cases for your new product resonating with a customer’s real world needs?
2. Is the pain the new product alleviates severe enough to motivate a customer to evaluate and buy it?
3. Does the product have all the features the customer needs to use it?
4. Will the product fit properly within the customer’s technology environment? 
5. Is a sufficient level of customer support available to fix bugs and resolve customer satisfaction issues with the new product?
6. Is the price of your new product in line with the customer’s perception of the value of your new product?
7. Can the Beta customer be satisfied sufficiently to convert to becoming a customer of record?
8. Is the customer satisfied sufficiently with the new product to be willing to provide a reference of some kind to prospective customers?

The above list might sound too obvious but I have seen both large and small companies fail to effectively implement and accomplish customer development early enough and extensive enough in their go to market strategy.  The net result can be disastrous.  Loss of millions of investment dollars.  Substantial redesign and rework in engineering.  Attrition of staff.  Business failure, etc.

On the other hand, performing new product development that includes a timely, successful, external Beta Program with your initial prospective customers provides an excellent opportunity to learn more about your market and acquire your first reference customers.   Affirmative answers to the above questions will determine whether your Beta Program is successful. If you have customers who have implemented your new product and are willing to say positive things about the new product to other prospective customers, you have also laid your Cornerstone in its’ proper place. You can now begin to lay the additional "credibility bricks", aka additional paying customers, necessary to build a strong foundation for your go to market strategy.  You will also begin to generate your first revenues from your new product.  

This may be controversial but I believe that the strategic value of first customer references far outweighs the amount of revenue you will likely receive from your first customers.  If you are able to generate significant sales dollars from your first customers then more power to you.  The point I am making is, if your very first customers are in a risk averse posture and want to pay nothing or very little to become your first reference customers you should strongly consider offering a contract with an initial term that offers the new product with deep discounts or no fees in exchange for a contractual obligation by the customer to serve as a reference customer assuming they are satisfied.

In summary, establishing credibility is about establishing trust.  It is about being believable.  Prospective investors, customers, partners, and employees judge the trustworthiness of new products and new companies in a number of ways.  I believe the single most important credibility building block or Cornerstone is your first set of customer references.  Other credibility "bricks" such as the caliber of your employees, the quality of your web site, the quality of your marketing content, the quality of your products, support, etc. are all very important.  However, none of these carry the same weight as satisfied customers exclaiming the virtues of your new product to new prospective customers.  Like it or not customers have more credibility with other customers than vendors.  When you execute a successful Customer Beta Program that results in your first customer references, the inherent credibility of your first customers enhances the credibility of your new product and company because they are now linked through their selection and use of your product.

Throughout my career in the technology industry I have observed an alarming trend that I believe has led to the failure of new products launched by established companies and has caused countless new ventures to fail.  The trend is an over reliance on internal product development without establishing sufficient external credibility for the product.   The net effect is companies wind up investing either hundreds of thousands of dollars or millions of dollars into creating product features everyone hopes someone will buy.  The classic "Field of Dreams - If we build it, they will come", scenario.  The problem in the technology industry is unless you have blended your product development efforts with external validation from customer prospects within the target market(s), not only will they not come, they probably won’t even speak with you.   

The great news is there are a number of ways mature and new companies can establish credibility for a new product or service.  My new blog series on this topic will cover what I call the Critical Credibility "Bricks" required to lay the strong foundation necessary for achieving success for a new product or company and the issues that are avoidable.

 More to come…

If Sales and Marketing are operational business processes just like Engineering and Finance, then why do we see so many early stage companies do well with Product Development or in Finance but struggle when it comes to Sales & Marketing? 

I believe the answer lies in the failure to sufficiently use business data metrics in Sales & Marketing to set appropriate goals and monitor/manage with metrics frequently enough to achieve success.

At G2 Strategic Advisory Services we help clients improve Sales & Marketing performance by identifying and establishing metrics as well as providing simple monitoring / management techniques to improve results.   The following examples are steps you can apply in your organization to do the same.

1. Ensure your Sales & Marketing Plans include Performance Metrics that support your business plan.  The metrics should be Key Performance Indicators that can be clearly established as goals and easily monitored on a frequent basis.  Examples for Web Marketing are NOT simple traffic metrics but rather how many Leads Web Marketing has contributed to the Sales Pipeline of Opportunities.  An Example for Sales is their Lead Converstion Rate.
2. Review Internal Staff Operational Meetings and determine if they are using Metrics sufficiently in their Weekly Review Meetings.  Each Department should have their own "Success Scorecard".  Marketing’s Scorecard should monitor the increase in Market Awareness for example and include the number of Press Mentions, the number of Leads Generated for Sales, etc.  Sales’ Scorecard should obviously include Forecast data but also other metrics that may be important such as the Total Number of Production Installs or Users.
3. Train your Managers to utilize metrics with their Staffs and monitor metrics closely.
4. Educate the Employees of your Company so they understand the importance of each Department achieving their own metrics and how they contribute to the overall success of the Company.
5. Review all Sales & Marketing Vendor Contracts and Relationships to determine if they include performance metrics related to their supporting processes.  If they do, make sure the metrics are alligned with and are meaningful to what your company has to achieve in terms of customer acquistion and sales.  Make sure they are not just Vendor facing metrics such as Quantity of New Leads versus Quality of New Leads.  If you are paying a Vendor to add value and it has resulted in no increase in real Pipeline or real Sales then change your Contract or change Vendors.  Beware of Vendors who resist establishing performance metrics.  If they shy away from alligning their metrics with your metrics obviously they are not going to contribute much in the way of results.  I saw one Vendor actually brag to a Client about the number of Partners they signed up for the Client during the course of a year and question the viability of the Client’s product when asked why those Partners generated zero dollars in revenue for the Client.  The Vendor thought it was all about the quantity of alliance partners they were delivering when the Client’s need was acquired customers and sales.

There is a lot more to this topic, however, I feel the above should be a good start. 

Whether you are struggling with Sales & Marketing or doing fairly well, I believe if you apply the above, you will either make much needed improvements or further expand your successful results.  If you have any questions on this topic or any of our work, please feel free to contact me at 1.800.974.2230 or by email at dave@g2strategicadvisoryservices.com.

Best Wishes,

Dave Govan

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As we continue our series of blog posts on Maximizing Yields From Channel Partners we can view additional real world examples of successful Channel Sales Executives thanks to Channel Web’s announcement of their 2010 Channel Chiefs.  You can find the list on crn.com.

http://www.crn.com/it-channel/223100084;jsessionid=DJUXHDJJGK3QVQE1GHRSKH4ATMY32JVN?_requestid=177437

I want to congratulate a very talented former colleague of mine from VeriSign, Armando Dacal, for winning this distinguished award and making the list for 2010.  Coincidentally if you read CRN’s summary of Armando’s efforts below it confirms the information our first three blog posts contained.  It appears that increased communication and formal planning between VeriSign and its’ Partners were the key ingredients for success.

Single Most Innovative Initiative In 2009:

The single most innovative initiative for which we are responsible for in 2009 is the Quarterly Business Review, which is a discussion centered on the growth of our partners.

Congratulations to Armando Dacal and the rest of his team! 

Here is Channel Web’s Summary unedited:

Partner Organization’s Top 3 Accomplishments Over The Past Year:

1. We fully revamped our partner program for partners by changing the business model to address the needs and concerns of our partners. Our restructured program is now designed to allow our partners to invest more on driving sales while spending less on inventory. The new program makes it easy for any partner, irrespective of size, to start selling quickly. The better results our partners achieve, the more benefits they gain in the program.

2. Another accomplishment is the partner platform enhancements that we made. We have increased the ease of use of the partner platform by consolidating multiple platforms into one easy-to-navigate console.

3. Over the past year we have focused on ways in which we can help our partners better market to their segments and have done so by supplying them with various marketing resources, as well as hiring outbound marketing personnel to provide them dedicated assistance to further enhance their business objectives and goals.

How Has Partner Community Grown:

The largest growth that we have seen over the past year has been in the registrar and Web hosting space.

Single Most Innovative Initiative In 2009:

The single most innovative initiative for which we are responsible for in 2009 is the Quarterly Business Review, which is a discussion centered on the growth of our partners. Our partners are an important asset and we want to ensure that we are always listening to them, taking their feedback into account, and ultimately implementing their advice into our program. Take for instance the redesign of our partner platform; this was designed as a result of our partners’ insight, which was brought to light via the Quarterly Business Review.

Key Channel/Partner Investments Made Over The Past Year:

Technological investments-Consolidation of multiple platforms into one easy to use console.

Marketing investments-Providing increased marketing support dedicated to the partners and their business objectives.

Partner relationship investments-Spending quality time speaking with and listening to our partners needs and ensuring that their feedback is addressed and implemented into the program.

How Are You Attracting The Next Generation Of Solution Providers:

VeriSign participates and sponsors a number of world wide conferences on a regular basis, yielding high visibility; in conjunction with that we have a globally recognized brand which helps to drive demand for our partner organization. Also, we provide cloud based services which are a hot trend these days, and that too helps to attract the next generation of solution providers.

Greatest Challenge Overcome In The Past Year:

Ensuring organizational alignment and increased momentum around the channel as it relates to our changing business model has been a challenge that I have overcome this past year. With careful execution, unimpeded drive and the right motive, we have been able to successfully align the objectives of our partner organization

Neil Batstone of Verizon Business has extensive experience creating and leveraging alliances throughout the world.  He’s been very successful at it so I asked him what his thoughts were on maximizing yields from Partners.  Here is his response unedited.  Enjoy!

So now you’ve signed the partnership agreement, what next?

There is a great focus on the identification and recruitment of partners for software, hardware and services organisations within the technology space. Clearly when you are looking to scale your business, enter new markets or broaden capabilities then a solid partner model is nearly always the right thing to do. In most cases it is perceived as cost effective, and helps avoid organisations having to invest in non-core areas and additional staff.

The generally held wisdom is that the collaboration will bring value (with revenue and growth opportunities) being created from day one.

In my experience this is just the start of the journey and it is what happens next that will make the partnership work (or not!)

A large part of the effort is spent getting to the event where the deal is signed and announcements are made with great expectations from both sides. That is when everyone sits back, passes round the cigars and waits for the $$s to roll in the door.

My view is that this is when the real work starts and companies need to be very focussed with a clear set of objectives to make the partnership work. I suggest that we need to consider and apply some simple rules that will form the basis for a successful partnership;

Expectations

It is necessary for partners to share common goals and agree who does what and when.

Consider these questions

• What is your business objective? Does it match your partners? Is it a revenue number or a client acquisition target?
• Who will lead and who will follow. Is it joint selling or will one partner take point?
• How will the two businesses communicate? Is a communications matrix needed at different levels? Tech/ commercial/ executive etc  

Plan

Consider the key activities that you will undertake together during the first few months of the partnership. Which of these will be actioned together and which will be delivered in isolation.

• By agreeing a plan with balanced, clear actions and owners this will serve to create an environment where people can get involved and become stakeholders.
• One of the key drivers for any strong technology partnership is to have your internal champions…these are the people that will take the lead and make it work.

Enable

• How will you enable each other sales organisations? All proposal content, pricing technical data and other relevant material must be shared in a common repository.
• Partnerships often fail because companies do not share relevant and concise content to develop joint business.
• Legal agreements should be defined up front to avoid confusion and minimize hurdles for joint engagement.
• Content must be kept up to date AT ALL TIMES!.

Measure

How we measure the partnership is often an area that gets overlooked and a regular review process must be conducted. This is necessary to measure the progress and agree on corrective actions needed to keep things on track. All appropriate stakeholders should contribute to this exercise on a regular basis. Often the financial goals can get overlooked if there is lots of activity. Activity does not always necessarily equate to success so the process needs to be rigorous and as objective as possible.

Conclusion

A technology partnership can be a fruitful way to develop a business with a strategic partner. But like any business initiative the path to success is littered with barriers and traps that we need to overcome. By applying some simple rules and keeping things in focus we can overcome them.

Our first interview in our series on Maximizing Yields From Channel Partners is with Souheil Badran, Senior Vice President & General Manager, eCommerce Solutions for First Data Corporation.  
 

I have the utmost respect for Souheil having had the pleasure of working with him at VeriSign where he served as vice president and general manager for international operations across Europe, Middle East, Africa, India, Central and Latin America and Asia Pacific. Souheil also had responsibility for VeriSign’s Global Channel and Partner programs.  Souheil has extensive experience working with Partners of all types and it is an honor to interview him for our blog.  I hope you find his insight as valuable as I have.

Dave:  Souheil can you expand on that further?
 

Souheil:  Sure.  Companies must determine what will lead to a deeper level of mutual agreement and vision between both parties regarding the potential partnership. Armed with this vision, the alliance should invest in key relationships commensurate with the potential value to be realized, thereby maximizing returns on scarce program resources.

It is that day of the year where many of us are wisely investing in our personal relationships while some may be assessing our need to establish one.  On this "Hallmark" holiday I would like to introduce a new blog series touching on business relationships where investing and assessing can increase results.

It is a well known fact in the technology industry that most companies benefit from business models that include indirect revenue through channel partners such as Resellers, OEMs, Distributors, and Referral Agents.  Yet, why do some companies experience great results from channel partners while others struggle or fail?  Particularly in a Web 2.0 era when it is much easier to connect and communicate? 

I have set out to answer these questions through a series of interviews with subject matter experts on establishing and managing channel relationships and invite your input as well.  I will be providing each of these interviews in detail in subsequent blog postings.  However, before I do I would like to share my personal perspective on channel partners.

I believe the right channel partners can make or break an emerging company and can help or hurt an established company.  However, I have seen too much emphasis placed on the quantity of channel partners and not the quality of channel partners.  Perhaps this has a lot to do with how the individuals responsible for this area are measured or maybe it is hard to turn down someone who wants to help you promote your product.

I also believe there is a naïveté when it comes to channel relationships.  A great deal of interest and work goes into recruiting partners and signing a channel agreement, however, as you will hear from a few experts that is just the beginning of the process.  It takes a considerable amount of time and effort to plan for results and manage the relationship to produce yields. i.e. it takes work and it requires managing.  If you’ve read my book about applying management science in direct sales to improve results you know I am a believer in performance management. Well, this is another area where the application of basic performance management can affect a positive outcome.  i.e. Set goals, coach/intervene, and assess. 

While I know that goals are often discussed, I wonder how many channel partner relationships involve preestablished success plans with detailed goals.  How many include a formal quarterly or monthly schedule of reviews to checkpoint progress and provide an opportunity for coaching?  How many involve a formal joint assessment to review how the relationship is working for each party and what if anything needs to be changed?

The good news is many large companies I have experienced accomplish the goal setting and the annual or biannual assessment part, however, they could benefit from more frequent check points based on a more detailed scorecard.  Of course large companies can afford the staff to accomplish performance management of channel partners but what about smaller companies?

This gets back to the point I was making earlier about quality versus quantity and it applies mostly to smaller companies.  Almost all small tech companies should have channel partners and in doing so they should apply performance management in their relationships.  If they can’t afford staff to do it then it should be done by members of the management team including the CEO.  Given their limited human resources I suggest dividing your channel relationships into two categories.

1. Strategic Alliance Partners: 

A select number of relationships that add strategic value to your go to market plan where you can take a quality approach to perform the necessary work to increase the odds of succeeding. i.e. train, joint sell, coach, assess, etc.  The right number of relationships should be based on the available resources you have to manage them effectively. 

2. Referral Agents:

Companies who approach you to promote your product and refer business to you.  I suggest being cautious about who you sign as a Referral Agent because their market activity has a reflection on your brand and can waste your resources if they are continually referring low probability prospects.  Referral Agents should be viewed with low expectations and zero touch since they are simply bringing you leads that you still need to qualify and work or pass to a strategic alliance partner to handle.

Through focus on quality and effective management of relationships it is possible to significantly increase your revenue through channel partners.

Stay tuned for subsequent blog posts containing expert advice and details on how to maximize yields from channel partners.

In many companies December is the last month of the Fiscal Year and that typically means budgeted items have to be purchased or go away.  Anyone who has been in enterprise sales or b to b sales before knows that December can be a crazy time of year when it comes to trying to bring in the opportunities you have been working on during the year.  When I think of what has made the difference between success or failure in closing end of the year opportunities or for that matter any opportunity, the answer that comes to mind is planning.  Specifically, Close Planning.

Close planning is simply figuring out the who?, what?, when?, and how? of winning a sale and obtaining a signed contract and purchase order. Believe it or not, I’ve seen time and again how people forget to attend to the details by asking their customers how it works in their company. This may sound like a minor point, but if close planning is not done effectively, it can kill your quarter. Every sales professional needs to understand how long it is going to take to complete a contract process and who is involved with contract completion and fulfillment within the customer’s organization.

I actually think that closing is the easiest part of the sale, but why? It’s simple, really. If you have executed an effective sales strategy and have done all the necessary upfront work of winning/selling, then you should have no problems wrapping up the sale. Closing is just the natural end result of all the work you’ve already done. I don’t intend to compete with Tom Hopkins, the great sales trainer, or any of the other training pros on the subject of closing. They will tell you about the different types of closes to use, such as the alternative close: “Would you like red or blue?” “Delivery in three weeks or four?” Sure, there are a lot of methods for closing, and if you are leading an enterprise sales organization, every member of your team should have read or listened to one of the great trainers on closing.

When it comes to closing, the important aspects to keep in mind are:

• Listen for verbal clues that the prospect is ready to move forward with a transaction—what we call “buying signals”.

• When you hear buying signals, offer a trial close. A trial close is a test question to determine if the prospect is ready. For instance, “How soon would you like to schedule installation?” “What color do you prefer?”

• It is said to ABC (always be closing), however, in my opinion if you try to close too early you lose credibility with the prospect and they move away. Be patient and let them move toward you. If you make yourself available and they really are interested, you can tell and you can trial close.

• Use a closing technique that best fits your personal style. Don’t try to imitate someone else, or you’ll likely come off as unnatural and awkward. For instance, if you are more consultative by nature, then use a consultative closing technique. “Based on the information you have shared with me about your project to date, the optimal solution I recommend is xyz. Do you agree, and if so, when would you like to get started?”

• Know your close plan. Know who is going to do what to whom to result in your receipt of a valid order. In large companies, this is a signed contract and a purchase order.

• Always try to get a firm payment obligation. For instance, don’t close blanket orders that contain no upfront transaction/payment obligation.

• When you ask for the order, don’t say another word until you get an answer.

• Once you gain agreement and close, wrap up and leave as quickly as possible.

• And Remember as Tom Hopkins taught us, never go out to lunch or dinner immediately following a close. Schedule your thank you lunch a few weeks later. Too many closed deals have come undone at early celebrations.

The above tips will help you improve your close rate and the most important is create a Close Plan and remove in advance any blind spots that may get in your way of achieving success.

Good luck closing out your sales opportunities this December.  If you would like to read more on this topic please consider picking up Dave Govan’s book on improving enterprise sales. Available now on Amazon.com and through special order at any book store near you.

http://www.amazon.com/Dave-Govan/e/B002HMX4WA

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Once you have determined that an opportunity is worth pursuing, avoiding the following pitfalls will increase your probability of winning.