Business Forum • 29 April, 2024 at 1:48 PM
At least 75% of world trade is conducted through indirect sales channels (through partner networks) and 80% of executives consider them important for business. However, only a third of the companies manage to capitalize on this opportunity, shows a study carried out by Horváth - a management consulting company with 40 years of international experience, present in Romania since 2005 - and Channel Advisors - a specialized consulting company in the field of indirect sales channels, with experience in the CEE area.
According to the "Unexploited Potential of Indirect Sales Channels" study, completed in April 2024, sales through partners can generate benefits such as: (1) entering a wider market; (2) access to partners' specialized expertise; (3) reducing logistical challenges and (4) reducing marketing and sales expenses. The study also details the impact in various industries, where companies in the manufacturing, healthcare/pharma, IT&C and financial services sectors achieve the highest revenues through partners, some even over 75%.
"A partner sales strategy can be the best model, applicable in almost any industry, to launch a new product or service on the market. An indirect sales channel can be scaled quickly, in multiple business verticals and various geographical areas, and the partners' direct expertise with the needs of end consumers and their familiarity with the local business ecosystem can lead to significant resource savings. Some companies are using this model successfully, but others still have many shortcomings, as our study revealed. The positive aspect is the desire of executives to learn how they can increase their sales through partners," said Kurt Weber, Managing Director, Horváth Romania.
However, two-thirds of companies believe they are not fully leveraging these benefits, and only a quarter have the tools, knowledge and data to build and manage an effective partner network. For example, one in five firms does not have enough data to understand the potential of partners and only one in three firms plans its sales activity together with partners. Regarding the support provided to the partners, it is mainly only partial (57%), and regarding the monitoring of the partners' performances, this is done insufficiently (55%) or not at all (11%).
Beyond these issues, the Horváth team that took care of the study identified five success factors of the relationship with partners:
- Prioritizing ease of doing business (Ease of Doing Business) in terms of company processes and culture.
- Monitoring and continuous improvement of partner engagement. On average, less than 20% of partners feel involved.
- Partner selling facility, given the directly proportional relationship between an indirect channel's sales and the level of support provided to partners.
- Providing the smoothest possible experience for partners, by implementing a PRM (Partner Relationship Management) type system.
- Investing in the indirect sales channel, so that the partner, in turn, invests in this partnership.
"The benefits of selling through indirect channels were clear to all study participants, but building a solid relationship with partners is a challenge for most companies. For a successful partnership between a 'vendor' and a network of 'resellers' an initial contract is not enough, but a living relationship, the structuring of collaboration, processes and allocated resources will be needed, which - properly managed - will constitute a net competitive advantage on the market", added Marius Perșinaru, Managing Partner, Channel Advisors.