By Louis Foong, President and CEO, The ALEA Group
The relationship between manufacturers and their channel partners is always an intriguing one. Even the most profitable of relationships have a set of intricacies and complexities that require deep understanding and careful handling. The accepted trust factors imply that manufacturers want to provide their channel partners with consistently good leads. The partners, in turn, will accept these leads and work to turn them into sales.
But in reality — as we know — the situation is quite different.
If we were to examine what the general scenario is like, it would look something like this:
What a waste of good, qualified leads! But this is something we see happening all the time in the B2B market place; especially in the technology hardware/software, telecommunications and healthcare/pharmaceutical industries.
Top executives from these companies call The ALEA Group Inc. to ask common questions, including “Why aren’t our channel partners following up on the leads we provide? Are they not motivated enough to want more business and increase sales?” Well, of course they are! Any business exists to be a profitable one, unless it is specifically not-for-profit; so manufacturers that jump to the conclusion that their partners are lazy or complacent could not be further away from the truth.
You need a universal definition of a lead that all parties agree on. This will help prevent hand-raisers and new contacts being misinterpreted as leads and pushed out to channel partners. It’s when this push carries on for too long that partners will tend to ignore leads rather than follow up on them.
Pull Versus Push Lead Optimization Strategy: A Case Study
At The ALEA Group Inc. we have seen many instances of the traditional “push” methodology being practiced by companies with their channel partner lead management programs. Because of the sheer number of leads that are put on their plates, it becomes a number play versus a quality play for channel partners. Manufacturers start to measure partner potential based on historical conversion rates and are inclined to drive the highest net-worth leads to the partners that have delivered the best sales numbers. The partners that have yet to display that potential end up receiving the lower grade or lower revenue-generating leads and their perception of lead quality coming from the manufacturer drops even further. It’s a vicious cycle!
I’d like to share a case study to illustrate how “pull” versus “push” is a better strategy for partner lead management programs. Although it is not strictly in the channel partner realm, it is within the B2B context and ALEA worked closely on this project.
Getconnected, a division of Discover Communications headquartered in Ontario, Canada, offers technology solutions that help streamline companies’ business processes. The company ran a pilot lead generation program using the Pull World of ALEA solution, a web-based, CRM-agnostic platform that enables management and sales to easily control and monitor the lead follow-up and reporting process. “The Pull World of ALEA solution exceeded our expectations,” said Carl Watene, Sales Manager at getconnected. “Out of more than 170 leads that were identified as warranting sales follow-up, only two were weak. This translates to a phenomenal 98.8% lead acceptance rate from sales.” You can read the full case study here.
Manufacturers Must Transform Lead Management Model From ‘Push’ To ‘Pull’ Methodology
Manufacturers are striving regain control over their partner lead management programs. As a result, we are seeing a paradigm shift from the “push” to the “pull” methodology. Channel partners typically expect that receiving ongoing quality leads from the manufacturer is their right. Manufacturers, however, need to realize that this is indeed a privilege they offer to partners. Following the 80%/20% rule, where 20% of channel partners drive 80% of revenue, it is completely justified that the high-performing, 20% minority gets the best leads, and consider it their privilege. For those that don’t perform, there is no “right” to expect ongoing leads. It’s as simple as that.
Now, by measuring partner potential, manufacturers also can simultaneously track and measure their own return on investment. You need to have a solid lead tracking mechanism in place so that once a partner accepts a lead, as a manufacturer, you can track the progression until the sale is successfully implemented and the key performance indicators (KPIs) have been delivered.
Remember: As we talk about improving channel partner lead management programs, I feel obligated to put in a word of caution about sales automation and funnel monitoring systems. Even the “best” CRM tool cannot deliver the right results until there is full and total adoption from all parties involved. You can push leads all you want through your automated lead management system, but if your channel partners have not bought into your sales and marketing strategy and do not have a high-perceived value of the lead quality, not much will be achieved.
This reminds me of the Pied Piper of Hamlin — he played a great tune and gathered up an army of mice, but they ultimately all drowned to death because he led them into the sea. Don’t let this happen with your channel partner lead management programs.