Sales
From Entrepedia: The Entrepreneurship Wiki
Contents |
Choosing the Right Channel Partner
Quoting James Barlowe (SIE)
When choosing a channel partner, only go indirect when you know how to sell the product. Ask yourself whether the partner has the reach into the target market, and what the the shape of their customer base is. How many people will there be at your disposal? What is their motivation for selling your product? The focus should be on product enhancement, market share, a new revenue stream, and a margin generation. Your channel partner should slow you down!
- >>>Make sure that they think you are worth the effort or it won't happen!
Are they prepared to put skin in the game? They must show early commitment: pay up-front for a license, appoint a dedicated sales resource, and run a launch campaign.
Managing your Channel Partner
Agree on a formal performance assessment process and be clear on the bonus/penalty procedures. Ask yourself whether they are following through with their investment in the partnership, and make sure their sales team are commissioned and incentivised to sell your product. You need to be sure that the commission justifies their effort! Do they carry products competing for their mind share? How do you high-jack mind share?
Keep in mind that a typical IT reseller will expect 25-30% commission. Also be aware that signing the agreement is just the beginning: you should invest in your partner. Give them product and support training, and teach them your selling process. Have the right partner manager on your team: direct sales performers who get a buzz from closing hate this role, as a partner manager needs very different skill sets
Hiring Sales Staff
1) If you want one sales person, hire two:
- If managed well, this will create healthy competition between them
- Statistically one will not be good, and you can't afford to wait six months to see if the one sales person will work - the company might be burning a lot of cash in the meantime.
- If one of the two sales people does not work and you fire them, it should focus the mind of the remaining sales person.
2) Give them to bring in significant clients
- Note: The length of time actually depends on the on average customer acquisition time and what the average purchase value is.
3) Beware of the "but there is a deal just round the next corner" trap.
Further Reading
- Thomas J. Kosnik (Stanford Technology Ventures Program): "Everything You Wanted to Know About Selling, But Were Afraid to Ask!" (pdf)
- How to "Ask for the order" - a blog post on the perspective of approaching sales
