In your business, there are many most likely a number of ways that you sell your products or services to customers. Most businesses sell their products directly to end customers via one or a combination of different methods including:
- Inside Sales
- Outside Sales
In addition to direct selling methods, companies sometimes also employ indirect sales methods to reach customers. The advantages of an indirect sales model include lower cost of sales and the ability to scale your business quickly to reach new customers. However, there are many considerations to take into account when evaluating whether an indirect sales model is a good fit for your company. Some of the questions that you should ask are:
- How easy is it to learn how to sell your products/services?
- Do you have enough margin in your product/service to support compensating an indirect seller while maintaining price integrity across direct and indirect channels?
- What is the initial investment required to support an indirect channel (e.g., training, back-office support, sales tools, etc.)?
At RingCentral, we employ a mix of selling models. On the direct side, we sell via e-commerce and inside sales. On the indirect side, we reach customers by partnering with carriers like AT&T and resellers.
While we started off with a direct-sales model, over the past few years our indirect business has become a key strategy for driving growth (since it enables us to quickly scale our business by adding new resellers in the markets we serve).
As we prepared to launch our channel program in late 2010, there were several factors that we that we took into consideration:
- Who are the end customers that we are trying to reach? And what types of companies currently do business with these customers?
- For example, one of our target segments is small and midsized businesses. SMBs typically work with an IT consultant or managed service provider for their computer and networking needs. Therefore, we created a program to give these types of companies the option to sell RingCentral in addition to the other services that they provide.
- How are we going to train and support our resellers?
- Training is a critical component to any channel sales program. We have an online training portal that provides self-paced certification and sales training, along with marketing collateral, support guides and various other tools that enable our resellers to sell effectively.
- Support for resellers (outside of your standard customer support processes) is also very important. Resellers should receive a higher level of support from your organization, since they are on the “front lines”.
Today, RingCentral has a multimillion-dollar channel sales organization with thousands of resellers in North America. Having a well-executed and -coordinated multi-channel sales approach has allowed us to diversify our revenue streams and scale our business. Expanding your distribution channels may help you do the same for your business. However, it is critical to answer some of the questions above to help you understand whether a channel sales program will be effective – and if so, what resources and investments will be required to support it.
I wish you the best in exploring and finding success in new routes to market to grow your business. If you have questions, please feel free to connect with me on LinkedIn. We may also look to host a webinar in the future to discuss this topic in greater detail (and perhaps provide input from some of our resellers).
Interested in learning more about becoming a RingCentral Partner? Please go to www.ringcentral.com/partners!
Originally published Dec 03, 2013, updated Oct 23, 2020