Indirect Sales Channel to Gain Steam in 2019 and Beyond

While about three-quarters of world trade flows through indirect sales channels, supporting technology that emerged over the past two decades – such as CRM and marketing automation – actually targeted direct sales teams. The good news: That’s changing with evidence of increased momentum for indirect sales in 2018 and beyond.

That’s according to Jay McBain, principal analyst, global channel at Forrester, who recently shared his 2019 channel predictions in a webinar with Diane Krakora, CEO at PartnerPath.

Forrester’s Jay McBain

McBain describes three industry stages; the first two are the rise of CRM tools followed by marketing automation, both of which targeted direct sales.

“One of the big predictions that I make going forward is that channels are the third stage,” said McBain. “It’s great that we spend all our time and efforts showing up for the direct side of the organization, and now we’re sitting here in the third stage, which I believe started in 2018 and will accelerate in 2019, which is really going to drive attention to this last mile or the 75 percent that goes through channels of all types.”

However, two key realities – everything is online and cloud consumption – will impact indirect sales. The fact that everything can be found online means more that buyers are well-informed, and they can buy direct. When it comes to cloud consumption, businesses are less reliant on the IT department for purchases, and switching products is easy.

“Channels aren’t needed to educate or inform buyers, but they are needed to give advice,” said Krakora.

Line-of-business buyers, pressured to show results, are not only making purchases outside of IT, but in 30 percent of cases are blocking them from getting involved, forgoing the bureaucracy and the time factor, according to McBain.

In fact, McBain contends that IT buyers – and two-thirds, or 65 percent, of tech dollars were spent outside of traditional IT departments in 2018 – look more like consumers and will continue to do so even more in 2019 when that 65 percent figure inches toward 80 percent.

“The B2B buyers of technology are 68 percent of the time doing all of their research online without ever talking to a partner,” he said.

Here’s the good news: Partners will be able to influence these buyers.

“Buyers are telling us that they need somebody to extend their journey, now that they’re 68 percent done. They need it to be consistent and to amplify what they’ve already learned,” said McBain. What these buyers want is someone to pave that last mile to purchase.

These buyers also don’t have the time to wait in line for an IT project to get done.

“Fifty-eight percent of the time, the line of business executives are hiring channels directly because they need the software and the stack that they’re buying to be installed, implemented [and] integrated, and they need it to be secured, compliant — and they need business continuity,” he said. “They’re going to run this project themselves. There’s no single throat to choke, no single trusted adviser — it’s almost a pure gig-economy project to get this done and get it done quickly.”

On this discussion foundation, Krakora outlined six trends for 2019 that partners need to be aware of so that they can …