News

Strategy Survey: Shift Sales into High Gear for 2009

Researchers recommend that channel leaders step back from "low-return" tactical projects, zeroing in on revenue-generating initiatives instead.

• By Anne Stuart and RCP Staff
• December 01, 2008

Specifically, respondents whose companies undertook initiatives designed to improve sales effectiveness reported generating higher revenues than those whose companies focused on increasing operational efficiency, according to a survey conducted by BlueRoads Corp. and research firm SiriusDecisions Inc.

Survey Findings
In September, researchers polled more than 1,000 high-ranking executives in software, hardware, telecommunication and services companies. Perhaps the survey's most significant finding: "A lot of channel executives were talking about wanting to work with their partners to drive revenue-but they focused on activities that didn't seem to accomplish that," says Charles Watson, senior vice president of marketing and sales for San Mateo, Calif.-based BlueRoads. "There was a lot of activity going on, but it wasn't helping the partner or the vendor drive revenue."

Researchers label the activities in question "efficiency-focused" because they emphasize automation and cost cutting rather than revenue generation. Examples of those tactical, "low-risk, low-return" channel investments include upgrading partner portals, running on-demand training systems, creating customized collateral and building chat rooms, according to the survey.

Nearly 80 percent of the channel investments reported in the survey involved such activities, which Watson describes as "programs and initiatives designed to make partners self-sufficient and keep them at arms' length"-in other words, aimed at automating partner relationships rather than emphasizing revenue generation.

Who Saw Gains?
Among the respondents from efficiency-focused companies, only 40 percent reported that they had seen channel revenue growth during 2008.

But among respondents who said they focused on sales-effectiveness strategies such as lead management and deal registration, it was a different story, with 62 percent reporting partner revenue growth this year.

Those effectiveness-focused respondents were also much more likely to require channel partners to report on lead acceptance, deal registration and other strategic issues rather than just issuing tactical updates on, for instance, pipeline and deal status. Watson says that finding highlights a fundamental problem for efficiency-focused respondents and their partners: "They don't tend to share information with each other that much, so they don't know what's working and what's not."

Bottom Line
Researchers say that in the coming year, companies interested in building revenue-bearing channels should focus more on boosting sales effectiveness than on improving operational or administrative efficiency. They should plan to spend the bulk of their time, effort and money on activities designed to enhance or increase lead management, deal registration, reporting and accountability.

Specifically, they recommend that companies take the following steps in 2009:

• Improve lead management by:
  • Generating more high-quality leads
  • Delivering leads to the channel as rapidly as possible
  • Ensuring that leads reach the right partners
• Help partners accelerate sales cycles and close deals by:
  • Selling guidance and coaching
  • Providing contextual product information
• Measure every partner, lead and opportunity key performance indicator (KPI)
• Protect partners from channel conflict
• Encourage both lead and opportunity accountability from partners
• Establish mutual accountability for all revenue-generating programs

Watson emphasizes that researchers aren't recommending that companies jettison all tactical initiatives. "We're saying, 'Shift your emphasis from administrative and operational efficiency toward revenue effectiveness,'" he says. "Instead of spending 80 percent of your time on [efficiency measures], do maybe 30 percent, and reallocate those resources."