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INSIGHT: Should growing businesses embrace the channel?

INSIGHT: Should growing businesses embrace the channel?

It’s one of the stock pieces of advice given to small providers: to grow your business you need to develop an indirect channel.

It’s one of the stock pieces of advice given to small providers: to grow your business you need to develop an indirect channel.

All the arguments about scale and reach get trotted out, as though they were a universal law that all companies are obliged to follow.

Based on 200 small and medium software businesses that we’ve studied over the past few months I’ve developed a different view.

Inside Sales are highly effective in delivering growth

What I found was that using an Inside Sales team was one of the most effective ways to deliver sales growth.

Of the different channel choices available (field sales, inside sales and partner sales) Inside Sales were the sales team that was most likely to deliver their sales quota or over-achieve against those targets. Their sales cycles were shorter and they had a better win:loss rate that other sales colleagues.

Partner Sales are more unpredictable

In contrast the Partner Sales teams were the most likely to fail to achieve their sales targets, their sales cycles are longer and their win:loss rates are poorer. However, there were two distinct communities within Partner Sales teams.

First, is a group of relatively poorly paid and relatively inexperienced Partner Sales people, and these people have comparatively low levels of performance.

On the other hand a second group of Partner Sales people were much more experienced and much better paid, and delivered much better results.

What does it mean?

If you are going to invest in a low-cost sales channel to drive growth then a low-cost Inside Sales channel is likely to out-perform a low-cost Partner Sales channel.

If you’ve decided to invest in a Partner Sales team then you should either finance it properly and hire more experienced partner sales people… or you shouldn’t pick this option.

For most providers… unless have the maturity and management competency to manage a complex and multi-faceted channel program… the recommendation is that you should grow your Inside Sales capabilities.

By David Mitchell - Research Director, Gartner

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