The Difference Between Sales and the Channel

By Surinder Brar

Channels is a component of a company's sales strategy, and for companies that leverage channels, their senior sales leader must have some experience in partner management. But the tasks involved in leading a channels organization is very different than running a sales team!

Sales managers often think of channels as merely an extension of their sales force and expect them to behave accordingly. This is fundamentally wrong. Members of a company’s direct sales force don't compete for the same transaction, and more importantly, they never can sell competitive products. Channel partners, however, are independent businesses with their own objectives that sometimes align with the vendor and at other times do not.

In addition, successful sales executives are driven to sell their company's offer while the partners are more focused on what surrounds the offer. Because customers can get the company's offer from any partner, it is incumbent they differentiate themselves in the eyes of the customer by their own unique value-add that wraps the offer. This can lengthen the sales cycle and cause frustration on the part of those sales leaders who don't appreciate that the partner’s value lies in the surround and not just in the offer.

Finally, most vendors pay sales commissions largely based on revenue or bookings. During my time at Cisco Systems, the company recognized that partners mainly care about their margins, not revenue or bookings, yet none of our channel programs were focused on partner profitability. That is why we changed our entire partner go-to-market model and switched to a value-based channel strategy.

Not surprisingly, Cisco revenues through partners grew faster following this change. It also changed the industry— other IT vendors followed suit and adopted a value-based channel model over time.

Sales leaders must realize that building a loyal channel means not sacrificing partner margins to meet their own revenue targets.

Surinder Brar, channel strategy advisor, is former chief strategy officer for Cisco Systems' Worldwide Partner Organization.