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How Sales Automation Can Help Drive Channel Sales

As many of us know, channel sales are a great way of scaling revenue. Even the best salespeople are limited by the number of hours in a day, making it difficult to increase the process. The channel sales model can help in this regard by relying on third parties such as affiliate partners, dealers, wholesalers, distributors, value-added providers, etc. to do some of the selling on your behalf. 

Many other benefits go with it; for starters, your product will automatically gain more credibility, granted your partner is trusted in the market. Second, there’s the efficiency that goes with it; a sales rep paired with several partners can bring in the equivalent of five salespeople at a fraction of the cost. There’s also the possibility of rapid testing and experimenting with new customer bases, products, promotions, marketing campaigns, etc. 

Channel Sales and MDF

Market development funds (MDF), or sometimes known as Co-op Funds, are a means by which brands help their partners for all the marketing materials and necessary activities needed to sell the vendor’s product or services. It’s the partners that develop these materials and conduct events to sell the brand’s offerings, while the brand allocates MDF to reimburse partners for the expense. 

These market development funds can be structured in different ways. It will depend on the relationship between the brand and its partners, the destination of the funds themselves, as well as whether or not the brand is segmenting its partners based on performance to reward and motivate them. The most common funding structures include stipends, rebates, marketing discounts, or fixed free marketing items such as a limited number of direct mail pieces, local PPCs, etc.  

Where Do MDFs Fall Short?

Currently, there are around 4,500 such Co-op programs offered by brands and various franchise organizations across the United States. Together they offer roughly $50 billion in marketing developing funds to their partners every year, but local companies are spending only half of that sum.

Some of the reasons for this, according to statistics, is that about 50% of local partners don’t understand digital marketing. Also, some 31% of co-op programs don’t offer digital marketing, while 63% don’t provide any social media marketing capabilities as options for partners to use. 

Even despite some efforts to reverse these trends, MDF and co-op programs are still struggling to generate any meaningful and measurable ROI. It leaves many channel executives feeling like they’re throwing money out the window, and in some cases they are. There are also other areas where these partner programs fall short. 

There’s a general lack of quantifiable planning where, all too often, MDF investments are not paired with measurable outcome forecasts to determine the number of leads generated, conversion rates, proposals, or closed revenue. Adversely, some partners may look at these co-op programs as something not worth the hassle since they also come with strings attached, such as generating leads, as well as the general uncertainty of vendor co-op payments, in some cases. 

Some partners aren’t entirely sure or don’t understand how they’ll make their money back, and they become hesitant to invest their time and resources in marketing the brand’s products or services. The long sales cycles further exacerbate it. In most cases, there’s a sizable gap between spending money and resources and the returns generated by the investment. Not only does this increase partner uncertainty, but it also makes it more difficult for brands to track their MDF/co-op ROI accurately. 

Another major impediment that affects MDF ROI is the uneven spending of funds across the sales funnel. Many partners tend to spend most of their marketing and co-op funds on lead and opportunity generation (at the top of the funnel). Unfortunately, however, they have difficulty in pushing these deals through and turning them into revenue. Often this creates a blockage of opportunities at the top of the funnel, with the middle and bottom seeing only a “trickle” of the potential sales. Also, the majority of partners don’t have marketing technologies like marketing automation to nurture the leads. So if you are selling a considered purchase with an extended sales cycle, chances are those leads will not convert into sales. Use it or lose it: often your partners will wait until the very last minute to use their funds in fear if they don’t use the funds they will lose the funds. 

Enter Sales Automation

To put it simply, sales automation is a process by which companies can standardize their sales processes and tasks, going from leads, conversions, reporting, performance evaluation, and everything else in-between. Such a system can bring together all sales history records in minutes, not in hours it would take sales reps to compile everything on a spreadsheet. 

Sales automation also allows companies to seamlessly and effortlessly measure and calculate critical variables such as conversion rates, lead time, or win-lose ratios, among others. Automated sales platforms that work can provide execs with a detailed overview of the activities of their sales teams in terms of products, services, customers, or territories, and will speed up the sale life cycle tracking, allowing sales reps to achieve their goals on or ahead of schedule. 

It’s important to realize that the average salesperson spends only about 28% of their time talking to prospects. The remaining 72% is spent on other tasks such as researching companies, hunting for prospects and their contact information, writing emails, leaving phone messages, data entry, internal meetings, and so forth. While all of these tasks are necessary and crucial for the sales department, most can be automated. 

Unlike Marketing Automation Platforms (MAPs), Sales Automation Platforms (SAPs) are designed to send a relatively low volume of automated text emails on behalf of the salesperson. They are not sending thousands of mass or branded emails like marketing usually sends using a general email address. SAPs make use of the salesperson’s existing email client such as Gmail, G Suite, Office365, or in some cases, exchange servers.

The best practice is to send fewer than 400 emails per day to avoid potential blacklisting. Also instead of sending all 400 emails at once, these platforms send one email at a time. As such, open rates will average anywhere between 25% to 85%, making SAPs great tools for lead generation. The primary reason the delivery rates are so high is that email service providers (ESP’s) and spam software solutions cannot distinguish a sales automated email from a transactional or conversational email. That’s because in most cases, these sales automated emails are texted based, have no images, and are small in size in comparison to branded emails with images and tons of links. While these solutions are capable of tracking email opens and link clicks, most users only track email opens.  This also helps in getting your email delivered because spam software can detect all of the link tracking in an email.

Sales Automation to Drive Channel Sales

Your channel partners will have plenty of challenges to deal with in their day-to-day operations of running their business. It means that their time and resources are often limited, meaning that marketing your products is often put on the backburner. 

That said, you can lend a hand and drive better marketing campaigns and sales at the local level that will go a long way. This is where sales automation comes into play. An automated sales platform will allow you to provide your partners access to the same resources and assets you’re using internally. It means that your channel partners aren’t operating in the dark and will be able to replicate and better understand your sales tactics, target market, as well as buyer personas you are using. 

By providing your partners with a sales automation program, you can support their sales and marketing efforts by seamlessly sending emails to ideal prospects in their territories on their behalf. All they have to do is monitor their inbox for responses, identify and qualify new opportunities and close new business. In the end, you are the one with the most complete and accurate information and knowledge about your target market. Seamlessly sharing the right message to the right prospects will help create a superior and better functioning network of channel sales partners. 

Besides, by coordinating with them through the automated sales process, you will ensure that your goals align. It’s common to see misalignment between brands and partners concerning target consumer profiles, sales methodologies, market penetration, or even profitability expectations. Automating these processes will increase synchronicity between both teams. 

Integrated Digital Outreach

Sales automation will also make it easier for you to share your leads with channel partners. For example, when a potential customer calls you to make an inquiry, you can collect all the necessary data, then automatically forward it to the appropriate local partner to close the deal. Similarly, you can use LinkedIn to help your partners connect with mutual ideal customer profiles on the social platform. 

By having deal registration and lead management integrated into your CRM, you’ll have better oversight over the sales process and will be able to provide an enhanced experience to the customer.  

Digital assets can also be shared for use in all sorts of standard online campaigns such as social media or email marketing. It can be applied to any outreach materials, including newsletters, white papers, videos, guides, etc., making it much easier for your partners to get the best sales documents into the customers’ hands. You can even co-brand them for improved effectiveness at the local level. 

Better Partner Reward Programs

Rewarding the best-performing partners is a significant aspect of any channel sales model since it’s a catalyst for building yearly mind share, among other such benefits. You can develop specific marketing and sales milestones that will be triggered once a partner reaches them. It will help eliminate some of your direct oversight and involvement. When these KPIs are activated, automated rewards such as gift cards, merchandise, etc. can reinforce future success.

It can also help you implement a tiered system among your partners, depending on their sales numbers. And depending on their tier, you can offer better benefits such as advanced marketing support, early access to beta features, features in your newsletters, strategic consulting, etc. 

There’s also the possibility to directly reward individual sales reps at the partner level when reaching or exceeding individual quotas. By tracking email and LinkedIn replies, new leads generated and closed sales, it’s fairly easy to track the success of the overall program down to the partner employee taking advantage of such a program. 

To summarize, using sales automation to drive channel sales can be a better alternative than the traditional MDF and co-op programs. It offers better results and a more hands-on approach, even if much of the work will be automated. If you want to learn more about how to use SAPs in your channel sales model, feel free to connect and subscribe to our newsletter