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Killing the Golden Goose

Isn’t it easy when you have a readymade set of people to lay all blame on? Sales organisations often resort to depositing their trouble at the doorsteps of the Channel Partners.

–          Sales figures are low

–          Market reach is poor

–          Entire range of products are not being sold

–          Customer are complaining about products

–          Visibility is low in the market

Blame the current Channel Partners … is a convenient answer.

And how do we solve this problem? Appoint another Channel Partner!

That is the panacea for all the problems because “I am Ok, you are not Ok!”

How many Channel Sales Managers have spent quality time with their Channel Partners to create a robust Business Plan and then followed it up for an entire year?

I have seen operating such plans successfully in my 12 years in the telecom domain. There are times when the senior management has come down harshly on the local team, during reviews. Poor Sales and insufficient market coverage are the stated concerns – the quick-fix solution suggested is: Appoint new Channel Partners because the present set are not performing.

The reasons stated are:

–          They have become too complacent

–          They take things for granted

–          We can’t depend on a few people

–          We are playing into their hands

–          They will not provide the inputs as expected

To reduce risk and to protect own turf companies appoint more channel than is necessary. But the opposite usually happens. The pie gets divided too thin and the partners start grumbling, they don’t see money in the business and hence can’t commit the large teams or the necessary level of activity in the market.

Soon the Principal is cribbing again – “Let’s look for more partners!”

But some middle level managers have stood their ground and said that such a strategy would erode Channel Partner confidence and it’s extremely short-term in nature. They defend the existing Channel Partners by presenting their track-record and the reasons for the blip – either on account of insufficient manpower or on account of leadership. The Manager would have had a Corrective Action meeting with the Channels in question and the fixes were being put in place.

At such a time, instead of helping them regroup, if new appointments were made, it would lead to conflict and even termination of a long – term relationship. I have been witness to the loss of some good quality partners on account of short-sighted decisions.

Dear Big Business House, you aren’t the only smart one around! The other side is thinking too and they are capable of taking decisions too. There has to be a balance – Yes, it is possible that some markets are not being covered sufficiently and maybe some Channel Partners are taking it too easy.

The first step is to study the situation and provide evidence of the shortfalls; it’s possible that the Channel Partner has lost interest and found some other business that is much more exciting and profitable. He thinks that would give him better returns than your business. If that is the case, it’s best to part as friends or alternately ask them to allocate enough time, money and effort to your business too.

After that’s agreed upon the next step would be to create a plan to recover from the dip and action it. The Channel Partner needs to commit to this and take ownership; often some of them play the absentee partner and dump the job of managing the business on the shoulders of the Channel Sales Manager. Abdication should not be accepted – his presence in the business is essential to get commitment from his team members.

The Channel Sales Manager needs to keep his or her part of the deal too – provide the necessary support and the promised inputs, review the recovery plan regularly and coach the Channel Partner and his team whenever necessary.

If you create an atmosphere of trust and understanding your Channel Partners would respond in kind. Remember, they are in it for money too; if they see their investment being eroded without any hope of returns then they would leave the business.

Good Channel Partners are not easy to find – you may need to create them; and when that is done it’s best to hold onto them than to start looking for another one.

A Goose in hand is worth much more than the new one you are trying to hatch!

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  1. Jamy
    June 1, 2012 at 7:41 pm

    Again, very relevant! Severing a business relationship without carefully considering all aspects of the operations and reasons for fluctuating fortunes is indeed an open ticket for making a bad name for yourself in the business circle!! Communicate clearly, invite the key think-tanks for a discussion and do a situation analysis before you jump the gun! Simple, right? But quite a few organisations love to make things complicated as mentioned in your blog Jay!

    • JayadevM
      June 2, 2012 at 12:19 am

      Yes, Jamy!

      Channel Strategy and the plans made for each territory need to be carefully thought out .. quick-fixes and short-term measures seem useful but rarely are lasting cures to the problem. Channel Sales Managers need to think long-term and win-win.

  2. Raaj
    June 2, 2012 at 12:52 am

    Down the ages Jayan… corporates have always done this… time after time… year after year…. decades after decades….

    I do not think that things will turn around all of a sudden… however there will be the odd company here and there… now and then… who will be bold and principled enough to buck the trend… but they are going to be an insignificant minority.

    While on the subject… what really comes to my mind first (and it always makes me laugh) is the launch of Reliance’s mobile service in Mumbai… I was there to see it happen first hand… they had almost covert/clandestine appointment of outlet/dealers… and then there was a surprise launch (before which the outlets were not allowed to make it public about their new business)… come D-Day, every third/fourth shop in every side street were Reliance outlets… boy weren’t these small businesses mad! There were protest, dharnas et al.

    That is just an extreme example… but it did happen.

    Of course, from a sheer management point of view… isn’t that another business model?

    • JayadevM
      June 2, 2012 at 7:54 am

      Hi Raaj

      I worked with Reliance Commercial during those interesting phase … so I know all about it.

      Yes, Management can have their own perspective on the situation – but businesses succeed when growth is inclusive and the outlook is long-term.

  3. June 2, 2012 at 2:35 am

    Your posts are so fluid and cogent, I read them all in a hush. Being a ahem…cough…cough… an MBA dropout and hence a layman, I can apply your thoughts only to life as I see it, but it all fits beautifully everywhere! The scapegoat, the ‘I’m OK you’re not OK attitude…the desperate myopic diagnosis and denouements. Carry on, bossman!

    • JayadevM
      June 2, 2012 at 7:44 am

      Hi Umashankar,

      I guess you found something more useful to do than pursue an MBA. Many of the biggest achievers in the world are college dropouts!

      So you’ve got one piece of the big jigsaw puzzle in place .. now to achieve your big dream!.

      Thanks for giving my articles a serious reading.

      Looking forward to your next story. Cheers!

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