Leveraging Channels for Growth
Leading Vendor of e-Business Applications
With IPO approaching, direct sales were through the roof, but indirect revenues were lagging behind those of competitors.
Research led to a new integrated strategy and targeting of key channel partners. Several existing initiatives were combined into a comprehensive program and rolled out.
The new program broadened the channel by including previously neglected types of channel partner making the business more scalable and the client went on to complete a successful IPO.
IPO was six months away and the company was growing rapidly. Talk about being in the right business at the right time – it seemed every major organization needed an enterprise content management system. Continued rapid growth depended on accelerating channel revenues even faster than direct sales. I was an external consultant on this engagement and I worked in a tight collaboration with a leading expert in marketing strategy and business process optimization, Mike Cunningham, who is CEO at the Harvard Computing Group.
Removing Barriers to Growth:
1) Insights about Revenue Mix
Our research confirmed several things the client suspected. Their indirect sales lagged behind those of their leading competitor. Their direct sales alone could not scale fast enough to hit their revenue projections. And their leading competitor had already established solid relationships with some key third parties. Our brief was to recommend a comprehensive channel partner strategy and this evolved into working with the client’s marketing executives to design and deliver the new program. By questioning assumptions in the client’s revenue model we revealed that the need to generate more indirect revenue was greater than previously understood. This insight led to a significant shift in the revenue mix and put greater importance on the success of the new channel marketing initiative.
2) Re-engineering the Channel Program
Being a renowned market leader, the client’s staff were inundated with partnering requests of all kinds. The sheer volume of inquiries meant some were neglected because it was unclear how to classify them or turn them into revenue-generating opportunities. At the same time, a great deal of effort was directed toward certain types of partner at the expense of others. We created a new way of segmenting and classifying potential channel partners along with a workflow for on-boarding them into several different levels of a single program. Every type of desired partner was funneled to the appropriate level with self-service and automated options at the low end rising to close personal service for those with high revenue potential. This allowed optimization of the existing channel marketing resources such that a greater number of channel partners could be serviced and with greater attention than before for the more important candidates.
3) Recruiting Key Partners
Lastly, we created individual strategies for aggressively recruiting the top target partners and assisted in on-boarding them. Our role evolved from leading to supporting to evaluating as client staff took over. The client won a few key distributors and began closing the gap in the competition for the best channel partners.