An Act-On Conversation: Jay McBain and Atri Chatterjee Discuss Channel Marketing 101
Editor’s Note: Jay McBain is Chief Marketing Officer for ChannelEyes, a young company that’s reinventing the way vendors communicate, educate, and engage with their value- added resellers and channels. Jay spent almost 20 years in various executive sales, marketing and strategy roles within IBM and Lenovo. He’s a frequent keynote speaker on channel marketing, and he’s had a slew of honors such as being named to the top 40 under 40 list by the Business Review.Atri Chatterjee is Act-On’s Chief Marketing Officer.
This blog post is an edited transcript of the first half of the Act-On Conversation Jay and Atri had, about the role of sales in channel marketing. You can listen to the podcast of the entire Conversation on the podcast player below, or download it on iTunes.
ATRI: Jay is with us here today to talk about how sales and marketing can work together to make the most of channel marketing. Welcome Jay, and thank you for joining us today.
JAY: Thank you, Atri. It’s a pleasure to be here.
Channel marketing defined
ATRI: Let’s get started by defining what we mean when we say “channel marketing.” You’ve said that most B2B companies are doing channel marketing, but they may refer to it differently. We hear people talk about partner marketing, indirect marketing, and so on. Tell us what you mean by channel marketing and explain how companies can do it well.
JAY: When you use the word “channel”, a lot of people think about the IT channel or telecom channel; they focus on the technology space. But we’ve done quite a bit of research across all 27 industries, and companies call their channels different things. Some will call them “agents,” such as real estate agents and insurance agents. You have automobile dealers, you have financial advisors; you have resellers, integrators, installers, retailers. There’re probably as many names as there are industries. But what you’re talking about is indirect ways of selling –using partnerships, affiliations, associations, and different people within your supply chain to either refer or directly sell to customers on your behalf.
ATRI: So really it’s any time you’re using an indirect channel that is selling to customers for you and you are enabling that channel to effectively represent you, your company, your products, services, etc., in the marketplace. Is that right?
ATRI: It would be powerful to get partners to really sell on your behalf, because you’d be able to multiply the reach and the range that you have as a company. Tell us Jay, what’re some of the best ways to grow a healthy productive ecosystem of partners, and how can you help them be effective?
JAY: It starts off with your own products and business model. And then there are people – especially in geographic locations that you’re not reaching today, or to market segments in industries that you’re not reaching today – and those companies that can add value to what you sell. It might be that local presence; it might be some industry intelligence that tweaks your offering to the end customers. There are a lot of synergies that can be had with companies coming together and either partnering on product or just partnering through sales and marketing to extend the reach.
It’s usually a maturity phase. In the first stage of a company, it’s usually all direct sales as you figure out the model and figure out something that’s repeatable and predictable. Then, once you hit a certain plateau in terms of sales efficiency and perhaps product maturity, you look to expand and find other niche markets or places where you can take your product, and the help you’ll need to get there.
How sales contributes to channel marketing
ATRI: So, most companies start off with the direct sales model because you have the most control over things. You get a sense of whether your product and your market are fitting together. And then as you mature more, you expand into channel-oriented sales to get that bigger range and reach that we talked about.
How should sales be involved? Is there a set of best practices for how sales and marketing organizations can work together to make the channel successful?
JAY: Absolutely. First you have to get over the fear of a channel. Somebody who’s been direct selling for a while may have some trepidation that someone’s going to steal a sale or commission away from them, or somehow they’re going to be replaced in the cycle. And that never ends up being true. What happens is this: If a channel’s embraced, and if it’s supported through some of the things I’ll talk about in a moment, a salesperson’s overall sales efficiency will go up. That includes the number of deals they can do, or the amount of territory they can cover. And their importance as the manager of this larger ecosystem goes up as well.
So for those direct sellers who then embrace a channel, it’s now more of a channel- or territory-management role. You’re going to a new level in terms of what you can do and the numbers that you can drive.
The behaviors of the salespeople have to change slightly. Gone are the days where you’re just one-on-one with the customer. Now, your skills may be more in assisted selling. The partner may be taking the lead, and you’re coming in as the expert on the product or the solution, you’re coming in as the person who has experience or best practices. So you’re providing expert testimony that’s coming in to help the partner along.
How partners are different from customers
The second thing is, partners are different from customers. They need to be enabled, they need the right tools, the right collateral and content, and the right education. And then they need to be motivated, and you have to do specific things to keep them loyal. All of that may include new skills that a salesperson will have to develop that are different than what they would’ve done in the past when they were selling directly to a customer.
ATRI: That’s very interesting. It’s a transformation that has to happen in the sales area; the salesperson needs to start thinking about managing their patch. And the patch includes channel partners who will give them leverage. The salesperson has to realize the fact that by enabling the channel, they get so much more leverage, so much more reach. They need to understand that the channel is not in conflict with them, but really working with them to achieve the same goals. I guess I would imagine that the best salespeople are the ones who figure this out quickly and know how to use this channel.
JAY: Absolutely. One part of figuring that all out is tools. A lot of the tools we marketers use, like automation, now shifts over in some cases for the sales team to take advantage of. The same behavioral tracking, the lead scoring (in this case it’ll be partner scoring), and nurturing that’s done in traditional marketing, now gets overlaid on this new partner channel. As an example, you can start to see as people become more interested as partners further engage with your company or your solution or your product. These marketing tools are relatively new in the channel world, however they are very, very powerful in predicting the behaviors – and obviously making better outcomes – much like it is for end user customers in marketing today.
ATRI: Very interesting. We’ve done a few things at Act-On to try to enable our channel partners to be able to run campaigns on behalf of their customers, and really provide that additional leverage and the ability to basically take your marketing activities and leverage it across multiple partners. So it ties into some of what you’re saying on how to make a channel successful.
Jay, thank you very much for your time today. I enjoyed hearing about the channel from you, as someone who has spent so much time enabling the channel and doing it so successfully across different types of companies. I look forward to our next conversation, about best practices in channel communications.
JAY: Well thank you for the opportunity, Atri. And I look forward to our next podcast as well.
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