Every company that sells products and solutions through channel partnerships is looking for new ways to maximize value from channel sales. In order to grow channel revenue, organizations must empower channel partners with incentives and resources. The need to manage the channel becomes equally as important as managing the company’s own internal sales and marketing efforts. As a result, manufacturers rely heavily on technology to automate and standardize channel management with the goal of reducing channel conflict, improving partner loyalty, and increasing the overall revenue for the manufacturer. A recent research study entitled, “Channel Sales: Renaissance in Partner Management”, conducted by the Aberdeen Group reveals that 72% of survey respondents lack sufficient visibility into the performance of channel partners and 84% of all respondents are exploring investments in channel management in the next 12 to 24 months.
While the challenges of increasing channel revenue (88%) and increasing visibility into the channel (28%) to improve forecasting and channel management were identified by all respondents as the top two factors causing companies to focus resources on channel management, the research reveals that Best-in-Class organization demonstrate superior performance in annual channel revenue by continually recruiting new partners and focusing on cross-selling/up-selling initiatives with existing partners. Best-in-Class companies indicated that they currently utilize partner relationship management solutions (89%), lead referral systems (59%), and lead tracking tools (55%) to improve the effectiveness of channel partners. Despite the adoption of technology solutions, the research reveals that Best-in-Class companies yield higher returns than all others by supplementing technology adoption with processes and other organizational capabilities. The result is increased revenue growth for Best-in-Class companies.
The report demonstrates the value of collectively leveraging organizational practices in process, performance measurement, knowledge management, and technology to provide a foundation for partner success. By combining organizational capabilities with a two-pronged strategic approach focusing on partner recruitment and cross-sell/up-sell initiatives, Best-in-Class companies are able to positively affect performance in average order value and deal size.
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