Sales is always the most expensive, wasteful and mismanaged department in every company

As bad as that statement is, the real irony lies in the fact that Sales is also the most important department (once you have a product to sell), and holds the potential to most drastically impact both the top and the bottom lines of any organization, with the least amount of effort.

A typical technology company will spend 50% or more of every revenue dollar, feeding its Direct Sales force.  That’s an amazingly inefficient metric, and yet it continues year after year without any significant innovation.  There are a few dirty little secrets associated with why Sales continues to trudge through the Valley of Dysfunction while the rest of the major business disciplines have undergone transformational change over the past 20 years.

·       Executive Sales Leaders are typically powerful “type A” personalities who have risen to the top based on charisma, competitive drive and reliance on their own intuition.  They trust in themselves and what they’ve always done to succeed.  In their minds, “It ain’t broke, so don’t fix it”.  They also tend to look out for their own, and paying multiple levels of high commissions to maintain Sales organizations is, in their minds, the way business has always gotten done.

·       Control and Visibility are rightly viewed as essential components of a successful Selling Organization.  Utilizing any one of the many leading CRM’s or Sales Automation tools on the market provides Executives with both the ability to control the process and track the progress of deal flow, within their own Direct Sales teams. Indirect or Channel sales are much more efficient, from a cost/benefit perspective (typically consuming just 30-35% of revenue), but many Sales VP’s who cut their teeth carrying a bag Direct selling are loathe to give up control of their revenue to the wild unknown of the Channel.  CFO’s, who live and die on the predictability of their monthly and quarterly numbers seem willing to trade 30% in profit margin delta (Direct Sales costs vs. the Channel) for the deal visibility that comes with a purely Direct selling strategy.

·       Leads and deals that are passed onto Partners, Distributors, VARS and Integrators seem to disappear into a “black hole” from which no “light” (information) can escape, until the deal is either magically closed, or the word comes back that it has been lost entirely.  Most large technology vendors will privately admit that the only methods they have to track the progress of big deals in the Channel are manually pestering their partners with phone calls and emails, and then filling out spread sheets with whatever information they can extract.

This archaic state of affairs seems incomprehensible in the age of the internet, the cloud and ubiquitous mobile computing.  But the truth is, the big CRM vendors have little to no motivation to integrate with their competitors, and the nature of a channel ecosystem are no common processes and wildly varying systems. How does a vendor enforce visibility, control and common sales processes among a completely heterogeneous partner organization?

The time has come for true innovation in the Sales world. Rightsizing and optimizing the mix of Channel and Direct to reduce costs, increase profit margin and drive overall revenue are the changes that can mean the difference between barely surviving and dominating your market.

Soon we will be able to show you how real companies are utilizing this kind of innovation to transform their businesses.