You know what's more frustrating than not having enough channel partners for your government sales efforts? Having partners that aren't helping you generate government sales revenue.
In the Getting the Best Out of Your Government Sales Channel Partners episode of Myths of Selling to Government, host Rick Wimberly of Government Selling Solutions tells a story of how a company won partnerships with much, much larger government vendors. Then, the smaller company convinced the much larger companies to become aggressive in producing government sales revenue for the smaller company.
In this true story, Rick was skeptical that the new larger partners would really give the smaller company a seat at the grown-up table until he saw it really work. What motivated these big companies? The question is answered in this episode of Myths of Selling to Government.
I just didn’t understand it.
We were a small, niche communications technology company…Less than 25-million in sales at the time. I was in charge of government sales. We sold to local, state and federal clients to help with their critical communications. Most of our sales were made directly by our sales team to the client. One day, the company hired a couple of fellows for partnerships.
I didn’t really get it. Rather than channel partners, I wanted more people on my sales team. I wasn’t sure that an aggressive partnership strategy was good for us.
We had built a nice market for ourselves from scratch. Along the way, we developed relationships directly with our customers. I didn’t want us to give up those direct relationships.
I wasn’t sure the channel would understand our technology, which could be a bit complex.
It seemed like one more thing for me to manage when my plate was already full.
Our sales folks didn’t like the idea. They were afraid the partners would infringe on their opportunities.
Plus, for another company, I had scoured the land…actually several lands, as we targeted other countries, too. We found a few international partners…and, all we really got were trips to interesting places for Rick.
One of these fellows…let’s call him, um, George…was a rainmaker type. He was pretty dang good at getting into companies, finding the right people and getting them fired up. The companies George was bringing in were much larger than us…much larger. (You would know their names.) I could not imagine why these big companies would want to partner with our little company. Seemed like a wasted effort to me.
The other fellow…Scott would be a good name for him...had the job of turning these partnerships into revenue. I figured I would be spending a lot of my time either traveling with this guy, or on the phone with him (back before Zoom, and when remote workers were common). I was right. (I wasn’t optimistic.)
So, here’s what happened.
What I’ve told you is all true. (I didn’t even change the names). I was skeptical…and, looking back, I was right to be skeptical. Besides the concerns I mentioned, what George and Scott were trying to do was counter to the company’s culture.
But…but…it worked. It took a while, but it worked. Revenue and other cool things started coming in.
You see, these guys were hard workers, and they knew what they were doing. They were both relentless and were both likable chaps. Slowly but surely, they began to win undevoted support from my team and me.
Let’s go back to my concerns, one-by-one.
I was concerned about our direct relationships with our customers. As it turned out, they got better…not to mention the fact that there were more of them. Our channel partners already had relationships with these new customers and were more than happy for us to build our own relationships within these organizations. We were handling installations, training and upper tier technical support. Of course, the partners wanted us to have good relationships with the customers. In fact, they insisted.
Remember, these partners were much larger companies with their own main product lines. We were a sweetener for them. They weren’t going to directly produce a lot of revenue selling our stuff, based on their volume, even if they produced a lot of revenue for us, based on our volume. So, what would be their motivation?
It’s not really that difficult to sign up partners, but what good will they be if they have you in their portfolio and are not actively pushing your product. Some will want you in their portfolio just in case one of their clients might want your stuff…one day. (yay) What good does that do you?
George and Scott found larger companies that were motivated by more than booking revenue from our product. You’d be hard pressed to find a better example than this one: A large communications company, one of many resulting from A-T-and T’s incredibly complicated spin-offs.
As I recall, George brought them in and Scott took over management of the partnership and convinced the partner to make our tiny company part of all of their government road shows…and, they did a lot of them. We were featured attractions. We were something new for their customers. Plus, we had done a good job building a high profile customer base in government. From these road shows, We got leads. They got leads. Sales followed.
Their mark-up for selling our product wasn’t high…but they remained dogged in moving our technology. Because their mark-up was small, they called on our salespeople to support their opportunities. And, because their mark-up was small, we were able to pay our salespeople a commission to support them. So much for that concern of mine. We maintained direct relationships and commissions, which kept my team and me happy.
Through an awful lot of work, George and Scott had worked out a deal that worked for the big company and the small company.
Still don’t understand the large company’s motivation? I didn’t either…at first. (I was just enjoying attention from the grown-up table.) Here it is. Everytime they sold one of our systems, at a price point of around 150-K, the client needed to enlarge their communications infrastructure. And, who sold them the infrastructure enlargement? Our client, of course…at at least ten-times our price point. They built infrastructure, so no margins to pay out. We won. They won. It was a thing of beauty.
As you can imagine, our company jumped all-in on this partnership and others the two fellows developed. We all pitched in to support the partners, both in their sales and their first-tier support efforts. (Heck, I paid for a daughter’s wedding with a commission from one of the partner’s sales).
If you want a partnership to work, you’ve got to work the partnership. Don’t think you’re going to work hard on the front end, then sit back and watch the money flow in. That’s like hiring a salesperson after a tough search and negotiations, then not supporting and holding them accountable. Same thing applies with your partners.
Now, let’s see. What happened to George and Scott? George is still rainmaking, sits on several Boards, and runs his own company. Scott became President of our company, which was then sold to one of those big partners, which was sold to an even larger company, then again. When he’s not on his tractor in Vermont, he’s President/CEO of another company. George Nichols and Scott Aflieri are both still treasures to me.
Me, well, I teach people how to effectively use partnerships and do other things to build government sales, am host of this fine podcast and most appreciative of your listening. Got any cool stories to share regarding Myths of Selling to Government? Go to the Government Selling Solutions website at gov-selling-dot-com and let’s set up a chat. Maybe I’ll tell your story, or have you on as a guest.