Amplifying Your Sales Team's Results With An Alternate Channel.
You may have invested in lead flow into your channel, sometimes with diminishing returns. If you reach that point, your company may be ready to bolt on an amplifier; a new channel, an alternate channel that supports the sales channel in a big way.
Channel productivity should be measurable since most channels are vertical, i.e. have a specific market segment or capability profile. In my days as a Field Applications Engineer for Mostek Corporation, we were directed to work with the engineering staff inside our client companies, in advance of the sales force, to design our semiconductors inside their future products. I was lucky; I had some big accounts and enjoyed a great relationship with many of the engineers I worked with at our client companies.
As a Field Applications Engineer, I was part of a specific channel designed to focus on an area that was not reachable by the sales force, which fed the salesforce deals they could have never made on their own. And the brilliance of design made sure we never conflicted with our distributors or our direct sales force. Yet, we had our own quota and teams coordinating with both distributors and reps.
We had the required talent, background and skills to do that job and everything worked together. And we were completely accountable for our results.
What about ROI?
Yes, right on target. The Field Applications Engineering Group paid for itself with ease. Without us, there wouldn’t have been as many great design wins as there were, and the sales staff knew it.
What About Your Company?
I shared this story for the purpose of illustrating how a new channel can drastically increase revenue and market share at minimal cost for the company as well as feed other existing channels. Even if you are not a manufacturer but instead a SaaS company, service provider or sell training, marketing and sales programs, you may not realize the channel opportunity directly in front of you.
But before you think about any new channel, determine up front if the ROI is realistic. Are you willing to invest up front if you know your new channel will generate revenue quickly as in 90-120 days?
Prove it with a proforma (a full P&L projection) in advance of spending your first dollar. It better look strong if you want to bring it to the board.
What About Skills?
Are the skills your new channel will need be available immediately or can you build a training program to generate skilled participants rather quickly?
Who already has those skills or at least a good head start acquiring them? Do you existing clients have that skill set from using your product?
The truth is that building a training program presents serious challenges if you’ve never built a “train the trainer” program. Instead of training people on what you do, you need to train on what they have to do, to get them to do what you do. Sorry if that’s confusing; but they have to get the same results as you do.
After you proforma is complete, and you’ve discovered and designed your new channel to play well with other channels, it’s time to decide how to fund it.
Funding Methods:
The method I am most comfortable with is self-funding.
This happens when you sell certification or accreditation as a means to bring people into your channel. No one wants to buy a job, but lots of people want to start a business. If you can find a way to help people understand the magnitude of the opportunity for them to start and build a business which you design, then your costs are minimal to grow and maintain that channel.
Two Ideas:
Value Added Resellers (VARSs) are generally technical experts in your products and your competitors. They add value by integrating, configuring and then handholding your client as they come up to speed. VARs are great to have if you’ve set aside both margin and continuous support internally. VARs sell many products at the same time and have loyalty only to those products that generate the highest fees and commissions. VARs generally don’t buy training from you; they expect to get it free.
Certified Consultants on the other hand, are generally dedicated to your products and your company. They pay you yearly for both certification and the support systems to sell and support your products.
Certification if done correctly can double a business in two years. Several companies have dominated their space with Certification. InfusionSoft for one has done a great job of creating a vast certification network and now has become their primary form of sales revenue.
That sales channel is FREE. It cost absolutely nothing in terms of salaries or benefits, only margin, as you would pay to any channel.
We Call This A Self-Funded Quantum Growth Strategy
Just training and launching this new channel by itself, without all of the components to support it, would be a mistake. The support tools must be fully developed and ready to go.
How does your new channel implement your solution with new clients?
Are there back-end tools you provide?
What about lead generation?
What about revenue sharing when sales are made by your new channel?
Clearly, there’s still some work to do before you launch. Let’s take a look at one problem at a time.
Back End Tools: I am an advocate of creating a set of custom tools based on which channel using the resource. In the case of Certified Consultants, I suggest a way to make working with clients easier while ensuring they get great results.
Ideally, if you do a great job you will keep your clients longer, you will have a valuable tool that keeps you channel connected to the company forever and you can monetize that tool in several different ways.
Lead Generation: Let’s face it; if you don’t provide leads, you can’t fuel a channel. Most of the time leads can start with prospects that have not yet closed. Using those leads to fuel a new effort can recover some prospects and convert them because now they have a “partner” in implementation. This is important. You are going back to your prospects who didn't buy, offering them FREE Consulting/Coaching when they do buy. You have changed the value proposition without costing your company one cent.
Your Certified Consultant offer some free assistance to new clients they sign up for your product. They are thrilled to develop a new relationship with a potential client and the client gets something you never offered before; implementation help up front at no charge.
In order to manage lead flow, use a separate CRM instance or a completely different CRM system just for this program. I’ve been impressed with Zoho.com as a low cost, high performance solution. Configuring your system to your new program should be relatively easy and in my experience, it’s easier to bring in a consultant for a few thousand dollars and get it done correctly, get it integrated into your existing infrastructure and ready to go before you graduate your first class.
Revenue Sharing: Set it up in advance as mutually beneficial. When they close a sale, they use your platform and infrastructure. The rev-share is paid when the services are delivered. They don’t have responsibility for pricing or managing the payment data, which you provide for them. Build this infrastructure before you launch, train on it, and then roll it out slowly for testing purposes.
Building Your Profit Plan and Timeline
When I work with my clients I always take responsibility for building the proforma for my programs. The reason I do this is because I take full responsibility for the outcome and that means we WILL hit our profit targets when we project or sooner.
What To Consider When Building Your Proforma; Start With Development Costs.
Project what you are you going to spend to build your internal systems; including your learning management system, your launch system and funnel, your back-end support systems and your lead generation systems.
Determine if you are going to allocate internal resources to doing this or if you are going to hire for the positions you will need to fill. You will likely need a program manager, a training manger and a marketing person for lead gen. If you have cultivated several people internally, that would be ideal, then hire from within. If not, start the screening process now.
If you are paying a modest base and structuring an incentive plan based on performance, then everyone wins when the program is successful. I don’t like paying big salaries unless you are transitioning a leader into this role and it’s worth the money to have an experienced operator in that position.
Add those salaries, commission and overhead into the P&L.
As discussed, design a lead generation program that is biased at first toward recovering past clients, then go back to your prospect base with a new offer. Make sure you have a low cost strategy in place once prospects and past clients have been exhausted. Finally train your new channel to build relationships and close with free sessions.
Finally, it’s time to reap the benefits of having your new channel operational. Your launch plan needs to first sell new people into the program for training. Experience shows this can generate as much as $30,000 for certification or as little as $5000.
The price depends on the potential for the program to become a full time profession for those who join. If the potential is there for a 3X to 5X multiplier on Certification fees, then you will get robust support when you launch.
After your first group graduates, tell your clients you have a new channel, arrange to introduce them to your new channel and offer to get them connected.
You did it. You have a functional, profitable program that can grow quarterly as long as you can handle the influx of newly trained coaches or consultants.
When you scale this into year two, the potential for a mid-level program will be in the $4M+ range and grow from there. Profits are in the 65% + range and could be higher depending on how much you are using internal resources.
Moving To The Next Step.
As your new channel develops, nurture your group, build in support and sharing, encourage ample feedback and deal with adversity quickly and definitively. This is called culture.
It’s best to have built your culture upfront and initiate people upon entering your program. This way, there are no surprises, there are clear boundaries and people will feel safe when they understand how they can express themselves and help others.
If you would like a complete blueprint on exactly how to do this: Follow This Link
As you start, build your plan, get it reviewed and then bring in support ASAP. If you would like to discuss your own program or would like to work with me to help build your program, you can contact me at [email protected]
Mitch Russo
LinkedIn Group Founder: The Alternate Revenue Channel Network