There are a number of pros and cons to using direct sales teams or channel partners. Read on to find out which option is best for your business.
When setting up your sales operation, most businesses are faced with two alternatives. You can either sell through an internal, direct sales team, or use channel partners, which are already-established companies that sell your products or services for you. There are a number of pros and cons to each option, and whichever one you decide will depend on factors individual to your circumstances.
Direct sales teams
There are several reasons why you might want to choose a direct sales team:
1) More control over the sales process
When using an internal sales team, you have much more control over the whole selling process. You can:
Having more control over the sales process also means you can better predict revenue - you get much more visibility over whether people are on track to hit their sales targets and can quickly remedy this if they are not. Therefore, businesses that prefer a more hands-on approach to selling may wish to opt for a direct team.
2) Don't have to achieve cut-through for your products
If you hire a direct sales team, the only products or services those individuals will be selling are your own. This is very different to channel partners, where they are likely to sell a number of different brands, including direct competitors. When using channel partners, you have to find ways of achieving cut-through so that they prioritise your brand over another. With a direct sales team, you have to make no such considerations, and can instead just focus on selling.
3) Can create a direct line of feedback with customers
Another key advantage of using a direct sales team is that it opens up an important line of feedback with your customers. You know exactly who they are, which means you can ask them directly what they think of your product and how you could improve it. This is not the case with channel partners, where you may not know who your customers are at all, much less have a vehicle for requesting feedback.
That said, channel partners also hold a number of unique benefits:
1) Channel partners are cheaper
If you use channel partners, you don't have to worry about setting up a huge sales operation. While there are certainly still costs involved, you are in effect outsourcing your sales, and therefore you'll spend much less in the long term than if you hire an internal team.
2) They already have established markets
When using a direct sales team you have to build up a customer base from scratch. When using channel partners, they already have an established market. This means you can much more easily tap into new markets without putting as many resources as you would with an internal sales team.
3) A channel partner network is much more scaleable
If you are anticipating significant business growth or tend to have more seasonal sales cycles, channel partners are a good option as a reseller network is much more scaleable. This is because you can add and let go of channel partners much more easily than with an internal sales team.
Whether you choose a direct sales team or a channel partner network, you'll need a well-thought out incentive scheme to help you get the most from your people. That's where Power2Motivate's Sales Incentive and Reseller & Channel Partner Incentive Programmes can help.