The Myth of Needing to Be ‘In the Room’
Vendors often clamor to stand alongside partners in sales conversations, and that’s often not necessary and – at times – counterproductive.
By Larry Walsh
Many vendors want to say that they’re “100 percent channel” (a myth) or, at the very least, that they’re channel-friendly. Then they’ll complain that partners aren’t bringing them into enough meetings with customers. The grievance doesn’t stem from a lack of sales activity, but from the perceived lack of having contact directly with customers.
Here’s what many vendors tell 2112: “We need partners to bring us to meetings with customers. When we’re in the room, we win deals every time. We need to be in the room more.”
The fact is, “being in the room,” in many cases, is often counterproductive. Partners will sometimes say that having vendors with them compromises sales activities, even when the customer is sold on a product or service.
[ctt tweet=”Partners will sometimes say that having vendors with them compromises sales activities.” coverup=”A1NFc”]The entire point of having channel partners is to extend sales and service capacity without incurring fixed costs. Rather than maintaining large and expensive sales organizations, vendors use channel partners to cover the total addressable market, leverage customer relationships to capture sales, and drill into niche customer segments and geographies.
Vendors practice two typical sales models – partner-led and vendor-led.
- Partner-led channel sales: Partners uncover sales opportunities and work the deal largely independent of the vendor. Vendors provide informational and logistical support, but mostly in the background.
- Vendor-led channel sales: The vendor essentially leads the sales conversation with the customer after an introduction is made by the partner.
Good reasons exist for having a vendor-led model. Some technologies and products are so complicated that they require expertise and resources only the vendor can provide. And some vendors are very good at uncovering sales opportunities that are passed to channel partners for fulfillment.
The issue is whether the vendor needs to be in every customer meeting.
Vendors believe, and rightfully so, that they know their products better than anyone. They built them, after all, and they’re best able to explain their purpose, function, and value. Also, they bring tremendous credibility in the eyes of the customer, which injects confidence into sales discussions. So when a partner is engaged in a difficult negotiation or competitive engagement, who better to step in and convince customers to buy?
And vendors say they win the deal more times than not.
Partners disagree. They say vendors may get the contract, but there are few winners in the room.
Some vendors approach the opportunity with a heavy hand. They arrive with an entourage designed to show the breadth and depth of their capabilities. What the partner and customer see is expense that’s beyond their reach. Moreover, the vendor’s pitch can be intimidating. Shows of force may satisfy a vendor’s internal constituents by giving them a voice in the opportunity conversation, but they often leave a bad impression on the partner and customer.
Some vendors will come into the room willing to do anything to get the sale. Because vendors have far more control over pricing than partners, they’re able to discount with great expediency. The problem, partners say, is that vendors are often too quick to negotiate on price. Even when they get the sale, they often remove much of the profitability for the partner.
[ctt tweet=”Vendors are often too quick to negotiate on price.” coverup=”Q6fyA”]And, in some cases, vendors will compromise the partner when they work the room. A partner may uncover an opportunity and bring a vendor into the conversation for sales and technical support. The vendor may then look at the opportunity, decide the partner isn’t the right fit for the customer, and flip the opportunity to a direct-sales representative or another – often preferred – partner.
Generally speaking, there’s nothing wrong with vendors lending partners a hand in uncovering, qualifying, and closing sales opportunities, as the successful outcome of this process will – on paper – provide both sides a mutual benefit. But vendors should focus more on enabling partners to take the lead and act independently in sales because, again, the entire purpose of a channel partner is to extend sales capacity at a lower cost. In addition, vendors should exercise greater patience during the channel sales process and give partners the opportunity to execute deals.
There’s absolutely no doubt that vendors can contribute to the channel sales conversation and help close opportunities. But vendors need to take a more measured approach to avoid compromising their channel relationships and investments.
Larry Walsh is the founder, CEO and chief analyst of The 2112 Group. You can reach him by email: lmwalsh@the2112group.com; or follow him on social media channels: Twitter, Facebook, LinkedIn.