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Most Common Mistakes Made When Managing Sales Partners

By Seth Jacobsen Posted on 2/28/17 8:35 AM

We don’t only provide Partner Relationship Management software here at LogicBay; we understand the importance of professional services for a complete channel program.  We work directly with our own consulting partners, as well as our established customer base, to understand best practices in channel sales and management processes.  As such, over the years, we’ve come to learn a number of common mistakes among those selling through channel partners.

If you’ve been in the indirect sales game for years, you may have already learned some valuable lessons from - or navigated around - some of these issues.  However, if you’re looking to expand or improve your channel partner support, we've compiled the following list to help you improve your chances for success.

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Seven Common Mistakes Made By Channel Managers 

1 – Using one-size-fits-all business objectives.

It might be abstract, but this is the mistake we see indirect sales vendors make more often than any other.  An indirect sales organization must be flexible, and both willing and able, to adapt its business policies to local markets.  It can be a tricky balancing act at times, maintaining well-enforced overall policies while still remaining adaptable, but it’s absolutely critical.  

Being too inflexible or dictatorial about local markets risks losing sales, or driving away sales partners altogether.

2 – Granting too many exclusive territories.

Another tricky balancing act is in finding the right balance of competition within your own sales ecosystem.  It’s true that excessive levels of competition can end up harming partner relationships or creating harmful cutthroat rivalries between them.  If too many partners are in the same market, it can cause issues.

However, even worse is if a partner has no competition at all.  Exclusivity creates monopoly-style conditions, which in turn encourages them to be lax or even stop working so hard to create satisfied customers.  This can end up damaging your own reputation as well as theirs!  Generally speaking, a vendor should only have complete exclusivity if they’re your first partner in a market region, and that exclusivity shouldn’t last for very long.

(Some exceptions may have to be made for global expansions, such as into countries which put stricter regulations upon foreign sales entities.)

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3 – Considering demand-generation to be solely the partners’ responsibility.

This is a mistake that we’re seeing less and less, thankfully, but occasionally it still crops up.  As the vendor, you are still your own best resource for generating interest and demand.  Not only are you most familiar with your product and market, but chances are you have a much better marketing\outreach budget at your disposal as well.  

It’s certainly great if a sales partner has the opportunity, funding, and initiative to do demand-generation of their own… but it shouldn’t be relied on.  A good vendor makes plenty of marketing materials available to their partners and helps considerably with lead generation.

4 – Ignoring unchecked growth.

We recently wrote a full blog on the topic of growth, so we won’t belabor this point.  However, it’s still worth mentioning that too-rapid growth can be just as harmful to a sales ecosystem as too-slow growth.  Often, such too-rapid growth also indicates other fundamental mistakes being made as well.  

There really is too much of a good thing, and if growth is putting a strain on your capacities, it’s time to slow down until you’ve gotten your feet back under you.

5 – Not considering partner needs and priorities.

It’s easy to get dictatorial when running an indirect sales operation, particularly one which has gotten large enough you may not always be in close contact with all of your partners.  However, this is something which can become disastrous if it goes on for too long.  As we said above about the need to remain flexible in local policies, the same is true when dealing with local vendors.

Always remember that they are independent businesses who are fundamentally concerned about their own growth and well-being.  Consult with them before implementing new policies, partner programs, loyalty rewards, and such.  Working with your partners cooperatively will make them much more likely to prefer working with you, and push your products.

6 – Not properly screening partners before bringing them onboard.

Even if you’re just starting out in indirect sales, you should never add a partner without first fully screening them to ensure they’re a good match for both your own business\product as well as your target market(s).  From their local reputation to their own target market, the more-aligned they are with your goals, the better the partnership will work out overall.

7 – Chasing big game while letting easier opportunities go by.

Everyone wants to land one of the Big Fish in the global sales market…  but not everyone can.  We’ve heard of vendors getting stuck in months - or even years -long negotiations with major organizations when winning the contract would be a long shot at best.  While it’s certainly good to dream, and to try to seize a plausible opportunity if it arises, the problem is these contract bids often end up consuming too much time and resources that don't allow you to focus on smaller opportunities that would be far easier to obtain. The importance here is to selectively pursue larger opportunities as they come, but not at the expense of slow-and-steady growth.

Of course, many of the problems we mentioned - and more - can be avoided by investing in and utilizing Partner Relationship Management software.  From centralizing your communications, to creating archives of promotional materials, to tracking partner performance, PRM can radically optimize sales ecosystems of any size. If you're interested in learning whether or not PRM can help, check out our Channel Program Blueprint self-assessment below.

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