Channel Vs Direct Sales

Recently, I commented on a LinkedIn pulse article by my friend Shane Zide.   My comment was as follows "Shane, I am a huge fan of the channel and partnerships that allow companies to deliver a complete solution to the customer problem.  For the majority of my career, I have heavily leveraged the channel.   Early in a company’s history I recommend a heavy focus on direct sales as the focus will be on selling to technology enthusiasts and early adopters."

My comment was based on my experience that channel partners won’t often sell mystartupcloud.com (a fictitious example company) when the customers are asking for Amazon.   When developing a sales strategy, I strongly recommend applying the concepts in Geoffrey Moore's book Crossing the Chasm.  See the picture above and read the book.

Your sales teams and your channel strategy should be affected by where your company or product is in its life cycle.   Early in that cycle, your teams will be selling to innovators and visionaries.   These are the people that try out every new piece of technology.   Innovators spend time at user groups or conferences and have relationships with sales people that move from start up to start up.  

The team selling to innovators and visionaries needs to be both technical and passionate.  They may need to be capable of selling concepts and products that are still evolving.

In these first two stages, your company needs a sales force that can create some early wins and gain momentum.  While it could be valuable to have a few channel partners or OEM relationships, these relationships should be opportunistic.  Your company should not spend large resources on recruiting or creating programs for these partners before crossing the chasm.

Once your company or product has momentum, it is time to make heavy investments in the channel including training, channel programs, and incentives.   This shift will also require a change in the structure of the sales teams and most importantly a change in compensation programs in order to align with this new model.  

When selling to the pragmatists and conservatives, your company will to need provide the complete solution and it may be best sold to them by people who already have a relationship with their company.    For additional ideas, check out this article for more information on Building Better Partnerships. 

In summary, I can't recommend that your strategy should be all channel all the time.   Know where you are in your life cycle and apply the right tools at the right time.