In today's world, Indirect Channels should be a core part of your sales strategy!

Indirect sales channels provide the flexibility to up scale and down scale as required without locking into significant OpEx. I am of the opinion that at least 60-70% of sales should come from Indirect Channels. Among other things, I deal with Indirect partners on a daily basis and find them competitive on a number of parameters:

1. Faster sales adoption of new rate plans than direct teams
2. Focused improvements in sales volumes and revenues based on a directly correlated incentive structure
3. Typically pay variable compensation only at much higher attainment cutoffs than what's specified for internal sales teams. In one instance, I found that one of our partners set a minimum 70% quota attainment for a sales rep to be paid.
4. Better at prolonging Customer Lifetime Value (CLV) as a residual commissions based system incents them to prolong the tenure of the customers
5. Can be tailored to play in verticals and zip codes that return higher ARPU, lower churn, and lower cost per gross add.
6. Productivity per Rep (PPR) and Participation Rates (# of reps in a team reaching quota) levels tend to be higher as generally the compensation payout is correctly structured to enable the partner to meet their goals of locking in into a specific operating margin only if their PPR and Participation Rates meet certain thresholds.
7. A partner can be held more accountable than the internal sales teams due to an arms length relationship and specific penal mechanisms such as commissions chargeback and the threat of relationship termination. Direct sales teams have much trouble enforcing accountability as much as a channel strategist would want and commission chargebacks are virtually non-existent.
8. Partners sometimes bring in unique sales strategies and enablers such as GPS tracking their reps for highly efficient time utilization tracking, especially when selling to small business channels - technologies that large companies might not readily adapt for their direct sales channels.

To point out a successful case, a program I nurtured with a partner now produces sales volumes almost comparable to what the internal teams bring in. Granted it took some time to get there but so did the internal teams.  This was not always the case but the right handholding and incentive structure that was repeatedly redesigned and tweaked through several field visits helped us gain our partner's trust and align our objectives.
 There are some pitfalls as well when dealing with indirect partners and I will elucidate them in my next posting. But my experience has been that the pros significantly outweigh the cons.

Here's an extract from an article on worldcityweb (http://www.worldcityweb.com/event-coverage/marketing-connections/113-avaya-working-to-build-indirect-sales-channels-grow-sales-padilla-says), which speaks to how companies focus on even acquiring other companies just to improve their indirect distribution. In this case, Avaya, a large unified communications company is even looking at going 100% indirect sales

"Avaya, a spinoff from Lucent Technologies, which was in turn a spinoff from AT&T, is a combination. It provides the software for call centers and for on-line help as well as selling telephone systems. About 60 percent of its sales are indirect, to resellers, or through a distribution channel. The remaining 40 percent are direct, including to a large customer like Bank of America.Avaya's goal, Padilla indicated, is to move away from direct sales. "That's what's we're aiming for -- 100 percent indirect."It recently acquired Nortel Networks, the Canadian telecommunications company, which was 90 percent indirect, according to Roberto Ricossa, formerly of Nortel and now a part of the Avaya team.The answer to the "why" is relatively simple: "Greater coverage," said Padilla, meaning your sales network can more easily expand since it is essentially outsourced."