How to Transition from Direct Sales to Indirect Channels

Joining us for today’s show is Ralph Hawkins, a Senior Vice President of Sales who knows a thing or two about transitioning from direct sales to indirect sales channels. Today’s topic is focused on selecting the right sales channels and exploring the economic models for partner programs. Ralph and I leveraged the How to Make Your Number workbook to access emerging best practices as a guide for our questions. To access the latest workbook, click here to get started now.

Let me tell you more about our guest. Ralph Hawkins is the Senior Vice President of Sales responsible for partner programs at PGi. Helping companies collaborate and be more productive by using conferencing and collaboration products, PGi is the world’s largest dedicated provider of collaboration software. With over 50,000 business customers around the world, PGi is the platform of choice for 75% of the Fortune 100. Ralph will demonstrate how to cover the market completely with direct and indirect sales channels, starting with how to make the transition.

So why this topic on this day? Selling to customers directly when they want to buy from partners, is a sure-fire way to miss the revenue goal. Selling to customers through partners when they want a direct relationship with your company, can be equally devastating. Within the direct and indirect channel model, there are multiple sub-models to consider. Coverage model decisions have never been this complicated, for we live in the omni-channel era. Listen as Ralph describes how to transition from a 100% direct sales model to a robust partner model. Ralph describes the advantages to cover the market by leveraging channels to broaden the reach of your company.

What’s impressive is the approach Ralph has taken to think about all the potential channels in a broad manner. Ralph thoroughly thinks through going from agents, to private label, to classic resellers, and more. That's what it means. Covering the market completely requires going beyond the obvious channels of your competitors.

Ralph and I discuss the economics of partnering. Ultimately it comes down to possible partners asking themselves, "How much money can I make?" Ralph outlines two economic models that he's using, and there are several others. The royalty model Ralph describes is that something that you can could possibly take advantage of that's a lucrative model for the channel partner of a manufacturer. Then you think about the wholesale to retail model, your classic B2B sales approach, especially with a software company like PGi. This model is built on the spread between wholesale to retail. Sometimes that's more of a consumer approach to things, but it's applicable in certain market segments with certain channel partners. Listen as Ralph describes the approach to think through for your economic model.

In the second segment of the show we discuss how to prevent and address channel conflict. Ralph describes in depth how to classify the channel coverage models based on your unique market based on buy preference and market dynamics.

Ralph and I discuss how to leverage the various channels to reach certain market segments that the direct sales force can’t reach effectively. Once a channel is working, we discuss how to scale up resources and we compare this to scaling internal direct sales resources.