Channel selling can be extremely lucrative. But it’s also very difficult to get right. Find out more about this challenging area of sales from a true expert.
Dylis: Hi there this is Dylis Guyan and welcome to the Inspired Selling Podcast, the place where coaches, consultants, trainers, and service based experts who sell to bigger businesses discover how to attract, convert, and retain more of their ideal clients on a consistent basis. I have a wonderful guest for you today and that is Marcus Cauchi. Now let me just tell you a little bit about Marcus. He started sales in 1987 so a veteran, much like myself, he’s a licensed Sandler trainer and co-author of Making Channel Sales Work. He’s served clients across 450 segments of the market, helping them find, win, protect, and grow sales with triple digit growth rates, which is phenomenal results.
He’s a leading expert in channel sales development, specialising in helping 3 to 50 million turnover technology scale-ups who want to scale up fast without losing control. He developed the Channel Sales Excellence Program to help vendors build a Special Forces unit of highly profitable loyal partners. He provides CEO’s and channel chiefs with the framework, strategy and tools to build, develop, and sustain productive, manually beneficial partnerships and that’s exactly what we’re going to talk about today. So, welcome Marcus. I’m thrilled to have you here with us today.
Marcus: Thank you for having me Dylis.
Dylis: You’re welcome. So, before we get into things, just share your back story and give us a synopsis of how you got to where you are today.
Marcus: I did a degree in Middle Eastern studies, which was essentially four years of watching spaghetti hoops run across a page in a slightly hung over haze, and realised that I was never going to work in the Middle East given that then I could probably speak about five minutes of Arabic and three minutes of Farsi. I ended up getting into sales quite soon after. At university started out in media sales, then got into recruitment and did that for 10 years. Then got headhunted by an old client to set up the first practice specialising in recruiting for the single currency conversion. So that was a good 20 plus years ago. I’ve always tended to be able to connect the unconnected. So, spotted the opportunity. I was the first recruiter in Europe to specialise in that, which is slightly ironic given where we are with Brexit.
I then got into selling software cause my old CFO headhunted me and then did that for a while, got into selling consultancy. 9/11 happened and had a 3 million pound pipeline that disappeared overnight. Then decided to set up on my own cause I’d just had enough. I had a telemarketing business and on my first day, with my first client and they said to me, “Marcus, we’ve just been on this great training program. Have listened to these audio CDs and read this book” And by that point I’d listened to probably 300 books on sales or read them and they were all telling me stuff that was out of date when Queen Victoria was a girl. So I shoved them in my inbox for five months and one day took them home, and in 15 minutes I had 10 road to Damascus moments.
So it was like being whacked on the back of the head with a mallet 10 times in 15 minutes. I realised then that this was what I wanted to do with my career, and never really look back. So being with Sandler for 15 years, I’ve helped people sell everything from aircraft carriers to naked plasters, matchmaking and female fantasy fulfilment coaching. [Inaudible 04:03-04:06].
Dylis: [Inaudible 04:06] you.
Marcus: Absolutely. Well, I had a former dominatrix as a client who ironically used to struggle using the concept of pain to sell. She used to coach women on how to seduce their partners and she’d sell fantasies. So they would be kidnapped by ex SAS soldiers, and then taken off to a Kasbah in Marrakesh and then the boyfriend would have to spend four weeks on a treasure hunt trying to find them. All sorts of weird and wacky stuff.
Dylis: We could say very varied.
Marcus: Yeah, very, varied. But the one common theme is…what we actually teach is a human communications model, which is why it works across the board. And by and large, what I realised was that our biggest obstacle is the six inches between our ears and the noise that goes on in there. So that’s my background.
Dylis: Excellent. Excellent. I love it. I love your sense of humour too Marcus.
Marcus: Thank you. Can you tell my wife please.
Dylis: So, getting down to the mundane, but this doesn’t need to be mundane because actually this is quite exciting channel selling. So, tell us what is channel selling? Just give us a description of that. So that our audience is very clear about what we’re talking about.
Marcus: Channel selling is selling through third parties. So it’s value added resellers, managed service providers, systems integrators, franchises, agents, distribution, anything like that. Referral partnerships are effectively a channel, joint ventures are a channel. Selling through the channel is the hardest job there is in sales bar none. Selling to enterprise where you have a complex committee is like herding cats. Essentially this is like cat herding with both arms and legs tied up because the only currency you have influence and trust. You don’t decide who does the selling, you don’t compensate them or you don’t decide on their compensation. You have no influence and no direct control.
You have to be able to achieve a result where the decimal point normally moves to the right. So you got a much bigger number without any of that direct control. What I’ve learned over the last 32 years is that control is an illusion anyway. People do things for their reasons and you have to, as a channel manager, as a partner manager…I’d rather call it partner management to be honest, because partners consider themselves to be partners. Channel is a term vendors use to describe their distribution, and it treats them as a utility. But the definition of partnership is you help each other get better.
So the best channel managers are really more like a general manager than a sales manager and the best channel chiefs or like a CEO rather than the VP of sales. They have to be really in tune with their partners. Why they’re in business? What they’re trying to achieve, and train them, help them, develop them. If you’re not putting money in the backs of your partners, they’re going to go dark on you very quickly. So you have to be really attuned and you have to stay in contact and you also have to take ownership and responsibility for the results despite the fact that you’re depending on other people to achieve them.
Dylis: Yes. That is so critically important because often, certainly with people I’ve worked with, you know, they’re working in partnerships or distributors very often and they just expect the distributors to do the work without any real great communication. There’s no partnership then. I’m glad you’ve used that word because I think partnership is really critically important to the success of working in this way. So the communication and having that objective and doing some training with your partners is so essential.
Marcus: Dylis it’s a bit more than that, there’s a lot spoken about the customer experience, but there’s nothing spoken about the partner experience and that’s what we’re all about. The partner experience needs to be a frictionless, seamless, delicious experience for the partner. From the moment you first engage them or engage with them through your outbound marketing or their inbound contact. Through to their recruitment, their onboarding. Training needs to be something that happens repeatedly, religiously, consistently, and you are obligated…in my opinion, to train your partners how to sell your products and services. If you don’t do that, then you’re effectively leaving it to chance. We teach a rule in Sandler, if your foot is hurting, you’re probably standing on your own toe. If your partnership isn’t working, the first place you look is the mirror.
If your partners aren’t producing, that’s your fault. Either you recruited the wrong partners, you fail to on-board them properly. Now the on-boarding process in our approach is 120 days minimum, and they need to know, what they need to know, by when they need to know it, where they can find it, how to do it. 75% of your time needs to be spent coaching and developing your partners, helping them to sell your products, your services, and creating an ecosystem where for every pound people spend on your products, there’s four, five, ten pounds for your partners, because you depend on them. If you don’t understand the proverb that, you know, rising tide raises all boats and you’re selfish in your approach, and you see this a lot where CFOs say “Well, why should I train my partners if they’re going to…if I train them to sell my stuff, they’re just going to use that to sell my competitor’s stuff.”
Well, shame on you because if you don’t behave like a partner and you treat them like a channel, then you’re going to get reflected back what you project out. It’s, there’s a guy called Kieran Crohn who won the unlikely and slightly overblown sounding award of the world’s best channel manager. I interviewed him for my podcast, and by God, he is the world’s best channel manager. He is spectacular. He spent 75% of his time coaching individual salespeople. He spends time working in the business of his partners, helping them to achieve their goals and objectives. He doesn’t sell selfishly. It’s not about him. It’s not about HubSpot his company, it’s about helping them achieve their goals. Emerson’s law of compensation states to get more, give more. The more people you help to achieve their objectives, the more likely you are to achieve yours. That’s what channel sales it’s all about.
Dylis: Really, there’s a lot of similarities there between a leader and salespeople. You know, the sales person has to take on a leadership role and develop that partner as a leader board with a salesperson.
Marcus: That is exactly why I said the channel manager is closer in profile and makeup to a general manager, and the channel chief is closer to a chief executive than they are a VP of sales. You cannot be selfish in either of those roles. It’s all about service.
I remember years ago, one of my clients, set up a speaking agency and we had Dr Stephen Covey come over, and I asked…I can’t even remember the question. It was very mediocre, but Dr. Covey came back with an answer that was a watershed moment in my life. His response to my average question was “The greatest among us serve the most” and partnership is about service. It’s not about servitude where someone else is on a pedestal, and that’s what you see with a lot of large vendors or lots of large distributors, there’s a tendency to be them and us, you know, parent child. This is about a partnership of equals.
One of the rules that we teach is even on your worst day, you are never less than or more than your partner or your customer’s equal. Creating that parity is really important. It’s about mutual respect, mutual trust, being fully authentic. None of this blaming, whining, moaning, grumbling, complaining. No persecuting, no rescuing, helping without boundaries or permission. It’s all about operating from what we call the winner’s triangle. You need to be vulnerable. You need to be willing to ask questions, knowing you may get answers that you don’t want to hear. You need to take personal responsibility. You need to be assertive and agree what the lines of demarcation are between what’s acceptable and not acceptable, and be ready to enter into constructive conflict. You need to be nurturing and empathic. Operating from there is one of the hardest things that any human being can do. In a channel or a sales environment, if you don’t operate from there, you are what we call, I sent it and that makes you selfish. You cannot be selfish in sales or in partner sales and expect to survive and thrive for long.
Dylis: Yeah, exactly! I know that you will see this so many times and what I absolutely loved is that if it’s not working, look back on yourself. It’s not…
Marcus: Absolutely.
Dylis: You know, you will get what you’ve given as you so rightly said. So…
Marcus: Absolutely.
Dylis: How do you…so any of our audience that are listening and thinking, actually I’m really interested in setting up a partnership, whether it being distributor, whether it be joint venture, whether it be a referral partner or something else. What are the steps? What should they be thinking about?
Marcus: Well, the first thing is ask yourself “Are you a good partner?” The partnership process should be a courtship you know. Before you put a ring on each other’s fingers, make sure that you’re compatible. So in the book we have 14 important questions to ask before I say “I do.” So can you put your logo on their office door? Now if they’re too small or you know, then they’re not present enough you may have to question whether they’re gonna be a good partner. Does somebody beside the CEO, make all the sales. Cause if it’s just the one person who owns the business, if they get hit by a bus, you don’t really have a partnership. How do they get new business? A big alarm bell, and I know a lot of your listeners will be thinking, well, we got our business by referral, the referral pipeline will dry up unless you have a system for generating referrals deliberately, intentionally systematically.
What kind of reputation do they have? Is their culture more technical than sales? Are your business cultures compatible and complimentary? How easy are they to do business with from the outset? Do they allow you to speak to their customers? Because very often partners are very protective because they don’t trust their partners or their vendors. Are their sales people asking good questions? If all they’re doing is just a lapping up product information, they’re not going to make great salespeople. Do they welcome an onboarding process?
Now, if you want to build a Special Forces unit of effective profitable partners where you have a mutually beneficial relationship instead of a land army of conscript….I was talking to a chap at the Hyper Growth Conference run by Drift a couple of weeks ago. They have a thousand partners of whom 200 have produced something in the last year. Of those 200, 20 i.e. 2% produce 60% of their total turnover through their channel. So why would you not be spending your time developing those 20 and finding the B+ players from the 200 who are going to become A players.
Dylis: Yeah.
Marcus: So you need to be aware that it’s not about you, it’s about them. Pay attention. Attention is a currency, you pay attention and you have to build that emotional bank account by genuinely investing in them being fully present. Not worrying about your target, making sure that you’re focusing on helping them achieve what they need. Make sure there is that compatibility. Make sure that before you start, you’ve identified what it’s going to take for this partnership to be deemed successful. How each of you are going to measure the performance of the other. What the ground rules are? What the demarcation laws are? What’s acceptable and not acceptable.
Creating a cadence of accountability. Creating a culture where you regularly hold each other’s feet to the fire. Where you challenge each other. Where constructive conflict from an adult to adult perspective is not only allowed but expected. That you can disagree, but once you’ve agreed a course of action, you both commit completely.
So one of the key skills is something called upfront contracting. This is where you agree at the beginning what will happen at the end. The terms of your upfront contracts must be clear, specific, and certain. There must be mutual agreement, mutual acceptance, mutual understanding, mutual comfort, mutual commitment, no wishy washy or ambiguous terms. Both sides know exactly what is expected of them and you’ve agreed how to escalate. You’re both willing to enforce the agreement to make sure that there is a genuine contract and you’re working towards common purpose, and this is so often missing.
If you do that, you can actually do business on a handshake. I mean for the last 15 -16 years I’ve done business on a hand shake. My wife now is making me put written contracts, but it’s never really been needed. But you know, she’s detail-orientated and that’s the reason we still have money because otherwise I would have spent it all. But, if you don’t trust each other and you don’t act with integrity, honour then why are you in business at all? Sorry, that was a rant.
Dylis: Nope, that’s absolutely fine. But that’s right. You’ve got to have this passion, you know, if you’re a sales person, a sales leader or you’re working in a partnership with someone, you’ve got to have that passion and that commitment towards it. So from your experience then Marcus, because I know you’ve worked with many people helping them to improve the channel selling or their partnership selling, what have you seen has been the biggest pitfalls? Even though they’ve got the structure and they’ve followed the rules, they’ve set the rules of engagement and they’ve committed to that partner. What do you see the areas that are in the main or the pitfalls?
Marcus: Okay. Whether this is channel or direct sales, honestly it doesn’t make a whole heap of difference. The first thing is that 98% of management problems start with wrong hires. So start by recruiting the right partners in the first place. So be clear about what a good partner looks like and what good doesn’t look like and don’t recruit the wrong type of partners.
Next, establish clear rules of engagement and mean them. Again, this is where things go horribly wrong because people pay lip service to it and they think it’s about creating a contract that we can beat them over the head with. It’s not, this is about understanding mutual purpose. Individuals with a purpose…
Dylis: Could you give an example of that Marcus?
Marcus: Well, individuals with a purpose invariably after…
Dylis: No sorry, the one before, your rules of engagement.
Marcus: I’ll come to that in a second.
Dylis: Okay.
Marcus: Where we have mutual purpose, where we are working towards a purpose, we find that people outperform people without one. So the first thing you have to do is understand why they’re in business and what they’re trying to achieve. And if you can’t help them achieve that, then you as the channel or partner manager have an obligation to tell them we’re the wrong people to work with.
You need to establish the ground rules of communication. You need to establish a cadence of accountability. So how frequently will we meet? How are you going to hold us to account? What are you going to measure? How are you going to measure us? What is an acceptable level of performance, as the vendor that you are going to hold us to in terms of knowledge transfer, training, support, communication, responsiveness, timeless, whatever those things are that matter to your partner, those are the things.
Have you ever been to a hotel, and when you leave they give you that survey about customer satisfaction. They ask you about the quality of the shower cap. How easy the checkout was. When actually what you really care about is soundproofing, because you were on a corner room next to the lift by the ice machine, overlooking the pool and there was a stag party and you didn’t get any sleep. You really want to talk about that, but they never tell you that you can talk about that, and they never give you feedback. I think what’s really important as partners you need to communicate. You need to engage.
Another element of the contract would be that, you will have a regular pipeline review. You will do joint prospecting. You will give honest feedback about the quality of the leads that you are receiving or giving, that you will do pre-call planning. You will rehearse together, you will do a post call debrief, you will refine your pre-call plan for the next conversation. You will do territory planning. All of these things need to be built into your agreement so that you can help each other be successful.
But too often it’s glossed over and they say well, they ought to know this stuff. You know, they’re grownups. It’s like hiring sales people and assuming that they can sell. 98% of salespeople are not sales people. They are order takers. They’re not salespeople. They don’t know how to find someone who thinks they’re well and engage in a dialogue with them to diagnose that they have a problem and help them understand that they need help.
So as a result of that, what happens is then its mutual mystification. I think you’re going to do one thing. You are doing something different and when my expectations aren’t met, then I blame you. Now, when you point the finger, there are three pip fingers pointing back. That’s where the real responsibility lies. So contracting is an essential part of the process. But our rule is ABC always be contracting. Lots of little agreements all the way and make sure that your relationship is still fit for purpose. Every quarter make sure that you’re sitting down and establishing are we still in sync? If we’re not, do we have to reset anything? Is it…have we now come to the point where we need to go our separate ways? But if we’ve agreed upfront who keeps the kids, then there’s no conflict. So we need to make sure that we are always clear. We always know what’s going to happen at the beginning, by the end.
This is where people are lazy…in my experience and they’re in a rush. I think one of the most useful rules that we teach is slow down to speed up. Don’t rush. Make sure that things are right. Make sure that you’re setting people up to succeed, in the on-boarding process. Teach them how to sell your stuff. Don’t just talk about the product, make sure that their sales people are asking the right kind of questions. “Like Dylis that’s great and how do I use that to sell it? Why would anyone care? What problem is it going to resolve? Why do they care about that? Why does that matter? How does that affect them personally?”
So you as the partner manager need to help them be successful. You need to understand why they’re in sales, why they’re in this job, why the work that they do is important and meaningful, who they’re doing it for. If you don’t understand all of that, then frankly you’re lazy and you get what you tolerate. You deserve what you tolerate.
Dylis: And for those who are recruiting partners, who feel that…I just forgot what I was going to say. I think [Inaudible 27:05].
Marcus: Happens to me all the time.
Dylis: Yes, those who are nervous about training and coaching and working tightly and having, you know, setting the rules of engagement and so on and so forth. They are worried about then the other company, so other partners could benefit from that relationship so that they might be selling the services of another company. They are not going to lose you. They are going to value you so much because you really are that trusted valued expert that’s helping them in their business overall. They’re not gonna…
Marcus: I’ll give you a great example of this. I have a managed service provider and IT support company as a client. I asked Graham, the VP of sales, “Have you ever had a partner who bothered to find out about you and what you’re trying to achieve?” And he said “Yes once.” “Are they still a partner?” “Yes.” “How long have they been a partner?” “17 years.” “Yeah, what about the others?” “Oh, they come and go.” If you invest in your partners, you will get reflected back what you project out.
Now some of them, they won’t played nicely, in which case you made a judgment call and it was wrong. But you didn’t establish those ground rules, those boundaries. Again, one thing I learned as a kid is bullies bully because they can, because no one sets a boundary. I used to get bullied at school. There was a guy called Tim who made my life a misery. When my fingers met behind his trachea, that was a boundary and it stopped. The same thing with partnerships. It’s not about, you know, using extreme violence. It’s about establishing clear boundaries and expectations. Agree upfront what is acceptable, what isn’t. If something that isn’t acceptable happens, then you already know it. You can recognise it and then you can call them on it and if they don’t remedy it, pull the plug.
Dylis: Yeah.
Marcus: Be a grown up about it. You have no room for emotional attachment to the outcome. It’s your job to do an excellent job at every stage of the relationship and the process and to systematise. This is another reason why things go wrong. They randomise the sales process, they wing it. Systems set you free. I spent the first 17 years of my career pushing back against systems and process with a misguided belief that it, you know, nullified my creative juices. It doesn’t. Having a framework, and a structure, and a system allows me to be as creative as I like within the framework and constraint allows creative freedom. You have the tyranny of choice when you don’t have constraint and when you’re operating in one…using one system, your partners are using another, there’s confusion. The customer doesn’t have that frictionless, seamless experience and so they buy from someone else.
The single biggest reasons why prospects object is because you take them there. It’s something you’ve said or done or not said or done, that has caused them concern and they won’t voice it because they want to be liked. They didn’t want to confront you. So why have you not set up the arrangement, the contract, so that they can confront you? So that you have an open authentic, honest relationship based on trust, honour and integrity.
Dylis: Yeah and this again is why setting the boundaries is so important, because you can set those boundaries to say we’re going to sit down and review and see what’s worked well, what hasn’t worked well and what we’re going to do differently.
Marcus: I took issue with one word, set. It has to be mutually agreed. This is about partnership…
Dylis: That is exactly what I was…Yep.
Marcus: Yeah. So we have to listen to our language, because the language of control is not something that works in partnership. The language of alliance, the language of mutual self-interest, mutual benefit. We talk about in our book a win, win, win or no deal outcome. It’s got to be good for the partner. It’s got to be good for the end customer. It’s got to be good for you or you pull the plug.
Dylis: Yeah.
Marcus: That requires courage and it also requires a good full pipeline, because where people go wrong…another reason why partnerships go wrong is scarcity mentality. If they haven’t focused on the front end filling the top of the funnel, then what will happen is they will go after everything and they need the business. If you want it but don’t need it, then you give yourself the illusion of control because you can walk away, and you can walk away from unreasonable requests and demands from the end customer.
But if you want it but don’t need it, you have that power. If you need it, then you’re desperate and no one… scared money doesn’t sell. So if the partner is needy, desperate and skit, you’re needy, desperate, and skit. You project it out to the buyer and it sets their alarm bells going and you’ve got 300 million years of evolutionary hard wiring you aren’t going to beat, because their alarm bells would be kicking off saying, hang on a second, something’s wrong here. Don’t quite… can’t quite put my finger on it, but I’m not going to buy it. I’m going to give them a wishy washy think it over, send me a proposal and we’ll be in touch. That doesn’t…because what you end up with there is a constipated pipeline, and you see that happening a lot because the channel manager, the partner manager is not clear enough about how to coach the partners to move stuff with sufficient velocity through the pipeline. They’re not challenging them. So very often what they’re doing is they’re allowing happy ears to exist where people are taking maybes instead of getting a clean no…or advancing the sale.
Dylis: Yes. Absolutely. Well, I think we could talk for three weeks Marcus because were so attuned in terms of, you know, making sure that you are taking on the right partners, miscommunication, the agreement between you when it’s not going right, that you’re challenging it and you’re working and moving forward. It’s like having a little mini sales force if you’ve got some really great partners working for you and with you, and you know, really having that tight relationship going forward.
Marcus: What you’re going to see increasingly is partner with partner happening, because the vendor in IT certainly is going to become more of a bit player, because they are just one part of a complex stack of…within the solution and the partners have the end user relationship. What we’re starting to see is channel chiefs occurring or being created within the partner network. So partners are working with partners. We’re also seeing a lot of niching happening. That will increase over the next few years because you’re no longer going to be the managed service provider in healthcare. You’re going to be the manage service provider for care homes in southeast London. You’re going to need to bring in partners who have specialisations in security, in data analytics and so forth. That’s going to create a really interesting shift in the market. More has changed in the channel over the last two years than in the past 35 years. So it’s going to be a really interesting time, and that partner experience is going to be critical to those who thrive.
Dylis: Yes, indeed. So, Marcus share with us how people can get in touch with you, share your book and where they might be able to find that.
Marcus: Thank you. So the book is called Making Channel Sales Work. If you want a copy on kindle, it’s on Amazon. If you want a paperback copy then email my wife Suzanne at scauchi@sandler.com with MCSW in the subject line and she’ll invoice you for £20 and send you the book. You can get me on LinkedIn, I’m prolific on there. I’ve got 415 articles. I’ve got about 400 videos on there, thousands of short posts, and YouTube channel and I have a podcast. So just Google me, Marcus Cauchi, or the inquisitor.
Dylis: Excellent. Is it Suzanne with a Z or with an S?
Marcus: S-U-Z-A-N-N-E. Thank you for asking.
Dylis: That’s okay, you’re welcome. Thank you so much Marcus, you are an absolute, leader and trailblazer actually in terms of channel selling, partnership selling and it’s been a pleasure to talk to you.
Marcus: Still learning, but thank you very much. Really appreciate it.
Dylis: Aren’t we all. Okay, thanks so much. Bye for now.
Well that was certainly some insights into channel selling, partnership selling and actually I prefer that term of partnership selling. So if you are in that situation right now please take note of what Marcus has said that this is about working together as a partnership, setting your objective, setting your boundaries, training your people, reviewing, being accountable and working with them in such a way that this really does provide benefits for both sides.
So, until the next time if you feel you would like to work closer with me come and join my Facebook group Inspired Selling. Or if you would like a 30 minute strategy session with me to see where you are now, where you would like to be and the challenges that might stop you getting there, please just drop me a line to dylis@dylisguyan.com until the next time, be great at selling and enjoy every moment. Bye for now.
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