Manage Your Sales Team: Sales of $1.5 Billion from Only 200 Salespeople

This article is based on a conversation with Braham Shnider, the founder and president of Channel Enablers, a global channel training and channel consulting solutions company. He has developed channel strategies in more than 20 countries, and his clients include AT&T, Cisco, EMC, Hewlett-Packard, IBM, Oracle, Nokia, SAP, Symantec, and Telstra. He can be reached through Channel Enablers, 2033 Gateway Place, 5th floor, San Jose, CA 95110. Phone: 408/573-5900. Web: www.channelenablers.com.

“AcmeSoft,” founded in 1995, is a provider of IT security and software-development services. It has 3,650 employees worldwide, approximately a third of whom are located outside the United States, principally in Europe, Asia, Australia, and the Americas. Of those employees, approximately 200 are involved either in direct sales or channel sales. Despite the relatively small sales force, AcmeSoft generated $1.5 billion in revenue during its most recent fiscal year.

AcmeSoft was founded during the rise of the Internet and, like many such firms, has gone through significant changes throughout the dot-com boom years, during the ensuing crash, and during the rapid build-out of high-bandwidth connectivity. As a result, it has acquired and organically grown a number of different businesses, each with different business models.

In mid-2000, AcmeSoft’s management set aggressive revenue and profitability goals. Two divisions in particular were important to achieving those goals:

IT security: In the wake of a series of well-publicized hacker break-ins at major corporations, AcmeSoft believed that its suite of software security tools could easily be expanded from its large-enterprise segment base into the much larger (in dollar value) small-to-medium business segment.

Software development: In order to build effective Internet-based tools, AcmeSoft had developed a suite of software-development tools that the company believed other firms could use to make the programming staff more productive.

To expand the IT security division beyond its large-enterprise customers, AcmeSoft added a separate channel-sales group to recruit channel partners who would sell to smaller companies. However, that channel-sales group had problems retaining channel partners.

To bootstrap and launch the software development division, AcmeSoft created yet another channel-sales group. The strategy was to imitate the high-margin, high-volume business model of Microsoft and sell primarily through a multitude of indirect channels. However, the software development division soon ran into difficulties recruiting partners, resulting in few sales and a revenue shortfall. To remedy this, AcmeSoft’s management added the software development division’s offering to the portfolio of the Internet-security division’s direct-sales group.

In short, AcmeSoft needed a workable channel-sales program in order to meet revenue and profit goal, but it was failing to recruit and retain partners in these two key divisions. The management therefore called Channel Enablers in order to determine the source of the problem and provide recommendations.

Channel Enablers conducted a detailed review and analysis of AcmeSoft’s global ability to meet its organic growth objectives through its various indirect channels. This analysis identified synergies and differences between AcmeSoft’s businesses with the goal of better understanding the opportunities to accelerate and protect indirect-channel revenue growth, lower operating costs, and lower selling costs.

Channel Enablers then evaluated AcmeSoft’s “ecosystem.” It looked at existing sales, implementation, and support capabilities of all of AcmeSoft’s routes to market, including options for increased up-selling and cross-selling. The research also delved into AcmeSoft’s messaging, including the delivery of effective value propositions and programs to all channels (why sell AcmeSoft products?) and partner feedback on the effectiveness of AcmeSoft’s value proposition to end users (why buy AcmeSoft products?).

Based upon that research, Channel Enablers analyzed AcmeSoft’s current outbound lead generation and demand-generation model and its effectiveness in motivating partners to sell AcmeSoft’s products, which included a review of the various partners’ specific needs in selling and bundling AcmeSoft’s products and the roles and responsibilities of both AcmeSoft and its partners in creating awareness and demand.

During this extensive research effort, a number of problem areas surfaced. Specifically, AcmeSoft’s IT security division never fully embraced the concept of channel sales. Instead, it had separated its sales force into two groups: 1) field-sales personnel calling upon large enterprises and 2) telesales personnel handling inbound calls from small to medium-size businesses.

As a result, the telesales group was directly competing with any channel partners that AcmeSoft recruited. The direct-sales group cherry-picked the leads coming in and expected the channel partners to search for whatever business AcmeSoft was unable or unwilling to pursue. The channel partners naturally resented this and were not inclined to work with AcmeSoft or sell AcmeSoft’s services.

The software development division had a very different problem. Its products were untested in the market, making it difficult to convince potential channel partners to commit resources. In addition, the reputation of the IT security division was well known in the industry, making channel partners leery of AcmeSoft’s ability to be a good partner – a perception that was abetted when the software development division began working more closely with the IT security division’s direct-sales force.

At the request of AcmeSoft management, Channel Enablers put together a plan for AcmeSoft to achieve its revenue and profitability growth objectives by modifying its current partnering strategy and sales investments.