Most businesses begin with either a direct sales or indirect sales approach and stick with it. LogMeIn grew into a $1 billion business on the strength of direct sales.
At that point, however, LogMeIn decided to try something new: Building an indirect sales channel inside a billion-dollar direct selling company.
Faced with unique challenges and opportunities as a result of this position, LogMeIn took a rigorous 10-step approach to creating its indirect sales channel.
1. Talk to controlling authorities first
Many companies avoid talking to their legal and finance teams as long as possible. LogMeIn started with this conversation.
To prepare for it, the team composed answers to anticipated questions from the legal and finance departments:
- What’s your strategy?
- Why are we doing this?
- What risks will we have?
- How disciplined is your program?
- What is the remuneration?
2. Set and socialize reasonable goals
Create an “upfront contract” with the people who will be affected by the decision. Clarify what’s going to be done, when it will be done, how it will be done and by whom.
“Ultimately if you’re not clear and transparent and declarative around what it is you intend to do or how you intend to do it, there’s a good chance that the program could hit a bumpy road,” David Kubick says.
3. Win hearts and minds
Connect with people across the company to discuss, and share how the indirect channel will help them achieve their current goals. Here, it’s helpful to avoid jargon. Instead, talk about how products move, how the channel will affect that movement, and how each party in the process adds value.
4. Articulate partner value
What do your partners bring to the table? For LogMeIn, partners added value by doing things that LogMeIn couldn’t do, didn’t want to do or that the partner could do better.
Also, consider the customer’s perspective. It’s wise to delegate to a partner in situations where the customer would actually prefer to buy the product or service from the partner, rather than from your company directly.
5. Get leadership to commit
Whether the answer is “yes” or “no,” get a commitment from key leaders. “Maybe” or “let me know if I can help” don’t provide the support that a growing channel program will need.
6. Bring business use to the table
Create a team that includes representatives of every business use of the channel. For LogMeIn, the team included people from games, products, engineering, sales and other teams.
This cross-functional group meets regularly to discuss strategy, define goals and identify the resources needed to put their plans into action. They clarify and define priorities for each business use as a team.
7. Build a stronger net, not a bigger one
More partners doesn’t necessarily mean stronger partnerships. By focusing on a smaller group of partners, LogMeIn was able to build better relationships with each partner. Both LogMeIn and the partner companies were able to see how the relationship benefited them. They were also better able to see how to add value to the relationship and how to sustain it in the long term.
8. Recruit leaders with experience
Lots of people have experience working with indirect sales channels. Fewer have experience building an indirect sales channel program from scratch.
For project leadership, look to the latter. If needed, reach outside the company for experience and assistance.
9. Let the data do the heavy lifting
Analytical rigor is a must, in order to convince controlling authorities and to track progress on the project itself.
Granular data collection and analysis can help maintain momentum in the planning and early implementation stages. By pointing to specific numbers, project leaders can get buy-in from early detractors. They can also avoid making empty promises and instead focus on the success they’re already seeing.
10. Understand the motion of your products
Jargon can obscure the real goal of an indirect sales channel: To improve sales. LogMeIn avoided the jargon trap by focusing on the motion of its products.
Talk to partners to learn who buys products and why, as well as which tasks are best assigned either to your company or to the partner.
Next steps: Balancing the complexities success brings
LogMeIn exceeded its expectations in the first year after its merger with Citrix, seeing 171 percent performance to plan in the fiscal year 2018, 300 percent growth since launch and the addition of more than 1,000 partners.
The channel has “almost obscenely high” conversion rates compared to direct sales, as well as a greater propensity for multi-product sales. The next challenge is to balance the increasing complexity of the indirect channel as it grows.