Shifting to Direct Sales Without Alienating the Channel

It’s no secret that business-to-business (B2B) buyers have come to expect the same ease and convenience of online buying they enjoy for personal shopping experiences when it comes to making corporate purchases. With Forrester Research conservatively estimating nearly US$560 billion in B2B e-commerce transactions in 2013, B2B companies are facing immense pressure to deliver this kind of consumer-friendly online shopping experience.

However, building a multi-channel ecosystem without upsetting existing channel relationships is a real challenge that requires balancing the concerns of referral and resale partners with the needs of end customers. Aside from channel conflict, internal resistance can also make the transition difficult.

The key to successfully making this transition is understanding how the three main components — direct to buyer, reseller enablement and long-tail channel enablement — can work together in a symbiotic and harmonic program that balances the needs of all three.

Tips for Success

Follow these tips to build a successful multi-channel model for your online B2B business:

• Focus on user experience: When developing a direct online presence, create an engaging, interactive experience that spells out business benefits, offers reviews and provides an easy, intuitive purchase process.
• Begin with subscriptions and renewals: Online renewal portals provide the visibility and account management businesses want, while leaving the first-sale opportunity to resellers.
• Concentrate on closed niches: SMBs and educational institutions often feel left out by the traditional reseller model that seems to focus on high-volume, high-average-order customers. Providing a direct sales channel for these niche customers that suits their unique needs can be a very lucrative move.
• Determine your revenue and reseller landscape: Understanding how and from where channel revenue is currently generated will help determine who needs to be involved and what challenges you’re likely to encounter.
• Define where the power resides: Organizational harmony is just as important as channel harmony. Know what part of the organization is responsible for each revenue stream and properly align your online B2B commerce program with your corporate structure.
• Determine your objective: What exactly are you trying to achieve? Analyzing your exact sales and marketing objectives — and whether your B2B tactics support those goals — will help you create a more successful strategy.
• Phase your rollout to build momentum: A graduated rollout with measurable deliverables at each stage allows you to build a consistent track record for success. Small successes build upon one another to demonstrate business value, fuel momentum and generate buy-in from internal groups that might be skeptical of a direct B2B sales strategy.
• Find a channel champion: Identify a key reseller ally who supports the addition of the direct channel. Call upon this channel champion to not only provide valuable advice along the way, but also to become an advocate for a direct B2B sales plan.
• Analyze your technology ecosystem and its future: A direct online sales program can be a major undertaking. Engage the IT department early on to determine whether sufficient staff and budget resources exist. Work with the team to determine what vendors and technologies might be needed to supplement internal resources and sustain the effort.
• Be sensitive to compensation concerns: Direct online sales can have an impact on compensation for sales teams, partners and resellers. Recognize that the change may be difficult for some and plan to provide a form of commission to help shorten and smooth the transition. Utilize available tools to create your compensation program. For example, after the initial sale is complete, have your e-commerce provider track future purchases by that customer and manage the commission payouts. Or, organize your CRM tool to link customers with the sales representative who maintains that relationship.

Delicate Balance

Developing a direct online sales program requires carefully balancing business buyers’ needs with those of the existing channel partners and internal stakeholders. In addition to devising a well-thought-out strategy, consider partnering with a technology provider who understands the challenges, and has a proven track record for success in overcoming them.

The right technology and a smart plan can make the transition a much smoother and more successful endeavor, allowing your business to take advantage of the lucrative B2B direct-sales opportunity.