Firstly, understand that there are many go-to-market (GTM) strategies that companies can use when they are considering their sales effort. The main two are:
- hiring a direct sales force
- create a channel-focused model
- put up a website and advertise all over the web
All of these models have their strong points, and all have their weaknesses. If you’ve hired good direct salespeople, then you should have great, unquestioned advocacy for your product and your company on every customer engagement. It’s also fairly expensive, and only marginally scalable. And good sales people do not come cheap.
Full disclosure – I’m an experienced CAM, and I prefer that model over the direct-only model. There are many reasons for this, some I’ll touch on here, but others belong in their own post. I’ll get to those later.
Understand that, if you choose the channel model, you’ll only get a portion of that sales force’s attention span, and so only a part of their loyalty and advocacy. This is where an effective Channel Sales Manager (or CAM, or Alliance Manager) comes in. They help build loyalty and advocacy inside channel partner organizations to leverage a greater population of sales resources for the CAM’s employer and product set.
In a nutshell, you leverage and multiply the efforts of a single employee’s efforts across a number of others that can become advocates for your company and products over time. In other words, your company enjoys more “feet on the street.”
Much of a CAM’s success depends on how easy you make it to understand and sell your product, and whether you’ve got a margin-rich environment whereby the channel partner can apply a resource to a customer’s problem, and then, due to the value of the product’s margin, to make a decent living selling, installing, supporting, training on it, etc. Good VARs and SIs hold strong relationships with their customers, and know their environments holistically. Given that, they will be better suited to identify deals for your company that you’d have found no other way.
Would you rather have 10% of the attention of a few people in 30 companies with multiple salespeople, or 10 direct salespeople? I’m not the world’s smartest guy, so I’ll quote J. Paul Getty here:
“I’d rather have 1% of the efforts of 100 people than 100% of my own.”
–J. Paul Getty, the world’s first billionaire
How many accounts can an Enterprise Account Executive handle effectively? 10? 20? 30? Remember, I said “effectively.” The “whales” require a lot of attention, and attention equals time. It’s not unheard of to have an Enterprise-level product have a sales cycle in the 10-12 month range. Some may be longer, some may be shorter, depending on the product. Of course there will always be outliers in the graph that have very short or very long sales cycles as well.
More than ever before, at the customer level, the watchword is “reduce risk.” Now a team makes the decision on larger purchases, rather than an individual. There needs to be quite a bit of consensus built before a major sale occurs. Just the simple logistics of getting 5-8 people in the same room at the same time for a presentation or demo has become quite a challenge. Not to mention the fact that the salesperson must now appease the preferences of 5 to 8 different people, possibly from 2 or 3 different departments inside that company. And each will have their own viewpoint on how to solve the problem at hand. The influence a rep has on this sale needs to increase to show value to other people than those that invited him/her in. And attention equals time.
On the other hand, a single effective CAM can handle 20-30 “Focus Accounts” which, let’s say, each handle 10-20 end-user accounts. That is 200-600 accounts out there that may hear about your product that never would have heard of you before. The CAM can then work internally with the appropriate Subject Matter Experts (SMEs) to help the VAR sell their first few deals, until the VARs will naturally become more comfortable selling on their own, allowing the SMEs to move on to other deals.
It’s simple math, really.
All that has exactly what do to with sales approach?
I’ve been both a direct salesperson (for a total of about 2 years), and a Channel Account Manager (also called an Alliance Manager) for around 20 years, and I can say definitively that there is a fundamental difference in the skill set required to approach and sell to someone directly, successfully, versus selling through someone that sells to customers directly, successfully.
Understand that this is an opinion piece – know that I’m happy to hear from others that have similar or varying degrees of similar experience, and especially varying opinions. I’m wide open for discussion, rather than me just rambling on.
So, what’s the difference?
Many skills are indeed similar, but many are also very different. I’m not judging whether one position is harder or easier than the other, just pointing out the differences, so that business managers make the right decision regarding GTM approach and customer pursuit, and then sales hiring managers can make the right hiring decisions.
Both sales models are similar in the sense that both types of sales people need to be able to create a relationship with their end customer – either a channel partner or an end-user organization. This is the similarity.
And in many companies, it’s also where the similarity ends. Many times, the length of the relationship is the major difference. In most direct sales positions, the salesperson must create a sense of trust very quickly, and must be able to divine the end-user’s needs in a hurry. With that information, he or she makes a sale, and then moves on.
In many companies today (at least in high tech), the “Customer Success” team handles the customer’s needs after the original sale is made (training, supplies, upgrades, cross-selling/upselling, etc.), because the salesperson has moved on to the next large deal. In some cases, there are even separate renewal teams that handle each successive year’s maintenance and support (M&S) subscriptions, for example.
The direct salesperson’s job is quite difficult in that he or she needs to figure out who may be interested in their offering in the first place, then find a way to contact the right person in the right company to tell that story to, and then show and tell to get the sale.
A marketing research project that I was involved in a few years back found out that we Americans are “touched” by about 3,300 marketing messages a day. And that was over 10 years ago. Look around your desk right now – there’s probably a logo on your pen, a logo on your coffee cup, a logo on your PC, and on your keyboard. When you drove to work this morning, how many ads did you hear on the radio? How many billboards did you see? When you watch TV, how many ads do you see per hour?
With banner ads, pop-up ads, linked ads and so on, I’m sure that number has only increased.
Think about that a moment. How does one get through the noise of all that to get my message through? We have all (had to) become pretty adept at ignoring sales messages, or we’d never get anything else done. But that’s what the direct salesperson’s job is, and to then move on gracefully after the deal is done.
The role of the CAM or AM
On the other hand, the CAM (or AM) must be able to create – and here’s the secret sauce – maintain – a partner relationship for a very long period of time. Through good times and bad.
There are many deals that a CAM works on with the channel partner, and many deals they will hand off to the direct sales force (as appropriate). Remember that the main duty of a direct salesperson is to close a deal and move on. And there are a lot of people that are good at that, and should be rewarded for that appropriately.
Given this hand-off process, the Rules of Engagement (RoE) have to be very clear on compensation for the channel partner that registers a deal, when the direct rep assists in the closure of that sale. In many companies, this is where the channel relationship side of the house falls down. Clear RoE helps immensely. Finder’s fees help immensely. Trust is critical.
As well as understanding the company’s own product, the CAM also:
1) Defines the optimal composition of partner organizations – demographically, technically, and by sales abilities
2) Maps and recruits new partners appropriately
3) Performs business planning exercises and customer pursuit plans
4) On-boards and enables those partner sales and support teams
5) Maintains and manages partner program policies
6) Performs QBRs and defines two-way KPIs
7) Finds a way to retain partner loyalty in the face of competitive offerings
8) Discovers and understands the business model of the partner to find mutually-beneficial cross-over points
9) Understands where the vendor’s product fits into the partner’s line card (helping drive loyalty)
10) Enhances the advocacy level of the partner’s sales force through constant, relevant communications
And, very importantly:
11) Just as importantly as good communications from the company, a good CAM doesn’t over-communicate to the partners
12) Creates and drives interesting co-marketing programs, contests, events, etc.
13) Reminds the company about how the channel impacts the company’s overall success
14) Distributes in-bound leads that best fit the specific partner strong points
15) Handles channel conflict
This is by no means a complete list, but it represents the “Top 10” (OK – Top 15) issues that a CAM handles on a daily basis, that a direct rep has little or no exposure to. Of course, there are many tasks that a direct rep undertakes that a CAM has no clue about.
Again, neither job is easy, nor does a CAM necessarily make a good direct rep. I’ve had conversations with direct reps that feel a direct rep can jump into a CAM role more easily than a CAM can jump into a direct rep’s role. I’m not saying either of us is correct, and this person’s comments may be totally on-point.
If you have opinions, please share them – I’d be more than happy to entertain a conversation here, rather than just a one-way communications path.
Thanks for reading.