International Sales Channel - Please? Pretty Please?

Ed Marsh | Aug 15, 2012

They'd be crazy not to add you!

After all you're offering them a great American made product which is far superior to the limited offerings in their backward, developing market.  And you're even gifting them the opportunity to make some money selling it.  Everyone wins.

international sales channelBut they seem unsure.  Are they nuts!!?

Maybe...but maybe you are. Too many companies assume that they need to simply add bodies.  Driven by a desire to publish press releases announcing each addition, or some simple-minded business growth metric of channel partner agreements signed, companies broadcast that they are willing to sign up parters with the qualification that they have a local phone number and can fog a mirror.

And their international sales channel develops into a collection of...mirror foggers.

Let's back up

First, let's look at your ideal channel partner profile.  This should be based on broad requirements and tailored to specific market (geographic and industry vertical) conditions.  Do you even know what you are looking for, exactly?  If not you're neither going to find it, nor convince the other party why the fit would be good.

Second, how did you find them?  Do you view your channel partners as an important target group to whom you actively sell, or merely as a necessary evil?  If you sell through channel then at least one of your primary target personas upon which you build your marketing effort should be a channel persona.  You should be actively targeting channel partners as part of your international inbound marketing effort.  (Just as a good HR department constantly trolls for exceptional talent, you should be harvesting channel leads continuously - even if you have all spots filled.  Channel management involves a continuous upgrade mentality.)  

I can assure you from experience that you will find the most closely matched channel partners through focused marketing.  You will discover the best fit among those who respond naturally to your presentation.  And partners will feel a inherent comfort with a company which already has a localized approach.  Even though only 5% of American companies export, your domestic competitors may already be dabbling in the market - and certainly foreign competitors are.  This is a great opportunity to distinguish yourself from the get go, and demonstrate why you may be the best fit.  (Caveat - make sure your inbound marketing targeting channel partners really reflects what you are searching!)

The Department of Commerce Foreign Commercial Service offers some great programs to identify potential channel partners.  The Gold Key service and International Partner Search are worthwhile tools, and value priced.  The best approach is to use a series of Gold Key meetings alternately for both end users and channel partners.  This allows you to conduct independent market research (not all through the filter of a channel partner) and find out from key, high profile potential customers to whom they would turn among local channel to find a solution such as yours.  That's valuable information and a great lead for a potential partner.

A cell phone and email address?

Returning to your ideal profile, you understand what a partner needs to succeed with your product.  Be careful about compromising.  In emerging markets where it seems everyone has the particularly seductive ministerial contacts it's easy to lose sight of elemental business considerations.  Don't!

At the same time it's easy to underestimate potential partners.  Just because their office may be substantially different (small, dirty, smelly, etc.) than yours, remember that these people probably built their businesses in far more challenging conditions than you; they are often quite savvy.  Further, despite contrary appearances, they very likely have substantial relative wealth and in many cases enormous absolute wealth.  They are successful business people.  They don't need you.

And if you show up with an attitude that they should represent your product "just because", you will manifest a comical naiveté.

A compelling business case

Assuming you are intent on adding channel that has an active and vibrant customer base (the best place to get initial traction, wins, references, etc. in a new market) then you are going to have to displace another product.  It may not be a competitive product - but a well managed company will be carefully maximizing its resources.  They aren't sitting there with capacity just waiting for your call.

Therefore you're going to have to make the case that it's worthwhile for them to abandon a product in which they have invested.  Maybe it's not producing much for them, maybe the principal is frustrating for them to work with, or maybe the market has evolved.  Nevertheless there is a natural hesitance to simply jettison a product which has been marketed to customers.

So make the case for why that's sensible.  Understand the market and how your product fits.  Understand what partnerships have worked and failed for them in the past and why - and therefore why yours would be particularly fruitful.  And most importantly (we're all business people) make the business financial case for why this is the right move for them today AND over the next decade.  This means having a simple business plan prepared - not a perfunctory "we offer 20% distribution discounts."

Everyone says they're different - here's your chance to demonstrate it

And use this as an opportunity to sell yourself as well.  In addition to mapping out engagement expectations (demonstrating your intention to travel frequently to support them), consider for example how your policy of open account terms (insured!) allows them to circumvent constrained local credit conditions; or how Ex/Im buyer financing (at US rates) positions them with a huge competitive cost advantage in markets with high interest rates.

Acknowledge that you understand there is an inherent friction in channel relationships and articulate why you will be atypical (in a good way!)  And never agree to a blanket exclusive.......

Want to step your international sales channel up a notch (or a bunch of notches?)  Contact Consilium Global Business Advisors to discuss how our broad international channel management expertise can be brought to bear on your challenges.

channel management

picture by Deiter Appelt