Having spent the last 20 years building software solutions and attempting to take those same solutions to market, it is clear to me the answer to building significant sales and profits lies with the establishment of a focused and committed channel to re-sell the product.
Commercialising new products is expensive, and marketing and sales are often not a producer’s strongest skill. Using channels as the go-to-market strategy can put vendors directly in touch with a large base of customers who endorse their solution.
However, all too often channel models fail to deliver for the reseller or the producer. Why is that? Personally I spent 15 years trying to get it right, with many failures, and can only now say that I have channel relationships which are strong, profitable and likely to be sustainable.
My perspective is that of a producer of complex software solutions that required a high degree of skill to sell, implement and support post sale. I thought that if I had the best product, then success within the channel would be automatically forthcoming.
I also found it relatively easy to identify and sign up channel partners. Expectations were always high that sales would flow quickly; however almost without exception, the sales did not occur – or certainly not at the levels we had envisaged – and relationships waned.
My initial reaction was to find other partners; however, this was clearly wrong. It was not that my channels were poor operators; quite the contrary. Each and every one of them was a very successful business delivering other software solutions to their customers.
The problem was one of enablement. My channel partners needed to be enabled to better sell and service the solution. It was clear that significant training would be required. Our product was proprietary, and the skills to sell and service the solution did not exist within our channel. However, the time and cost resources to develop whole new skill sets would have been significant, the task monumental and still very likely to fail.
I wanted to develop a channel strategy that would leverage my assets, our IP and software solutions. I needed to find a model that would allow my channel partners to leverage their assets and not be required to develop and invest in new ones.
I observed that our potential channel partners had a considerable asset in the form of sales and services staff who were already highly knowledgeable in Microsoft technologies. The trouble was that I was not Microsoft, and as much as I might have liked to, replicating them was not a viable option!
My solution, which I am happy to share, was a return to the drawing board, and was two years in the making. I re-designed my solutions to reside within Microsoft’s core business applications. Having a solution that was no longer proprietary, but standards-based, resulted in a completely new channel experience and improved sales growth. I no longer needed to enable my channel partners; they were already enabled as they already possessed the skills to sell and support Microsoft standards.
In summary, my experience has shown me that channels work best when they can be enabled naturally. It took me and my company two years to correct the fault in our channel model, including the development of a whole new product, but sometimes you have to do what you have to do to get ahead.
Donald Hastie is the CEO and founder of ERMLive. Donald has spent the last 20 years in the HR sector developing payroll and HR management software solutions. He was also CEO and founder of online payroll provider PayGlobal.
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