Supporting A Growing Sales Channel Throughout Its Lifecycle

One of the philosophies we feel strongly about here at LogicBay is the need to support companies through the various phases of sales channel development. While it’s common to talk about a “sales lifecycle,” it’s far less common to see similar discussions of businesses and their sales partnerships. 

However, this belief that sales channels should be treated as growing "organisms," so to speak, is at the heart of our Partner Relationship Management technology and services. It’s not a platform specifically designed for small, medium, or global organizations. Rather, LogicBay PRM is designed to grow alongside your organization, with scalability to support your efforts at each stage of channel growth.  

Specifically, based on our interactions with hundreds of companies since 2003, we have identified four key ‘phases’ of growth: Three which represent the normal, sustained, healthy growth of an ecosystem, as well as a fourth which indicates sub-optimal performance. Our goal is to help support best practices across all these phases, while assisting those that are looking to turn things around.

Every sales ecosystem begins in the emerging growth phase. This could be a new startup, or it could be a large established company moving from direct sales to indirect sale partnerships. In any case, the channel ecosystem is in its first weeks or months of ‘life’.  

Best practices during the Emerging Growth phase revolve around proper planning. Companies which simply go out and start recruiting partners without sufficient foresight can easily create significant challenges for themselves down the road, ones which could have been avoided.  In particular, we suggest Emerging Growth ecosystems focus on:

• Defining ideal types of partners for recruitment and beginning to identify them.
• Creating a standardized set of training and on-boarding procedures.
• Writing initial training, marketing, and other outreach documentation.
• Finalizing plans for profit-sharing, reimbursement, rewards, and other partner incentives.
• Setting up lines of communication between partners and specific points of contact.
• Establishing some form of electronic tracking of partners, sales, leads, etc.

While it’s not always necessary to have a single software platform in place during the Emerging Growth phase, there’s a strong argument for making the investment as early as possible. Centralized software will almost certainly become necessary later—to prevent major optimization issues—and the earlier a software platform is implemented, the easier it will be.

2. Scaling

An ecosystem enters the Scaling Phase once they have all their fundamental procedures in place, and the first partners have been successfully integrated into the system. Assuming all is going well, ventures are profitable and the organization is looking to continue further growth.  

This is also where turbulence due to inefficiencies can start becoming a drain on the organization as a whole. Some of the most common problems we tend to see include:

• Time-consuming and costly training\on-boarding procedures.
• Difficulty keeping track of each partner’s status and effectiveness.
• Disorganized content and communications that inhibit information flow.
• A lack of a Market Development Fund or other methods to provide material support for partners, particularly those just joining the ecosystem.
• The first instances of channel conflict, with multiple partners competing for the same pool of buyers.
• Partners complaining about inefficiencies or difficulties in doing business with the vendor.

This is the point where implementing a Partner Relationship Management software platform can be invaluable. By centralizing all these services -and more- a growing ecosystem can be very quickly optimized and most of the wrinkles smoothed out. Otherwise, there is a strong chance that the problems within the ecosystem will continue to grow and create more challenges to further growth and profit.

3. Continuous Improvement

There is no single boundary marking the Continuous Improvement Phase. It roughly means, “A vendor has a stable collection of partners who are achieving desired business goals, with growth slowing down for the sake of stability.” This does not, of course, mean that growth ceases.  Rather, it becomes strategic, with more focus on long-term stability.  

If there is a major growth spurt, it can be due to new business acquisitions or a company entering entirely new markets, and may require recruiting overseas partners and going global.

At this point, most changes to the ecosystem should be largely incremental.  It’s extremely helpful to have data-analysis systems in place which can be used to identify areas where optimization is still possible. It is also crucial to continue to maintain lines of communication -ensuring they remain clear and open- while offering increasing support to partners for smarter sales and marketing.

A company can theoretically remain in the Continuous Improvement stage indefinitely: Slowly recruiting more partners, fine-tuning the ecosystem, and always maintaining good communication flow throughout.

4. Sub-Optimized

At almost any point, it’s possible for an ecosystem to “backslide” into the Sub-Optimized Phase, where growth is halted and profits may be endangered. The causes of this are typically due to:

• Poor internal data tracking
• Communications and information-sharing problems
• Too-rapid expansion past sustainable levels
• Lack of understanding of the market or “ground level” problems facing partners
• Market shifts the ecosystem is not adjusting to match

While the exact problems and solutions are likely to be individualized, this does not necessarily indicate a "death spiral." Rather, it means that the company needs to slow down -halting expansion for the time being- and focus on examining the fundamental issues contributing to their lack of ecosystem optimization. It may also be necessary to “trim the fat” and let go of certain partners who are continuously under-performing.

The more quickly a company in the Sub-Optimized Phase can come to understand the causes of their trouble, and implement solutions that undo those causes, the more quickly they can get back on track towards Continuous Improvement.

Revolutionize Your Sales Channel Ecosystem With Partner Relationship Management

There is no better tool on the market for supporting growing indirect sales channel systems than PRM. By centralizing all operations within the ecosystem – including training, marketing materials, communications, lead management, and advanced reporting – a channel manager gains considerable power to manage the ecosystem at the highest level. To learn more, contact LogicBay today for a full demonstration of our PRM system.