Israel Business Management

So, now you have a product or service. The next question is what is the route to market (RTM) for you product - meaning how will a customer buy the solution? Will the customer come to you directly and buy from a sales person or from your web site (this is a full discussion for a different time and day) or will they buy it from a reseller, retailer, agent or someone else?

1. How complex is the solution? If the solution is complicated, will require much hand-holding during the sales process or a lot of work for implementation - you may want to sell directly, at the least for the first number of sales (we will speak later about how to correctly enable the partners once you have chosen that (RTM)). If you are selling your product or service based on ease of use and simplicity, you cannot have a long implementation process and you may want to consider using a channel strategy to build more "feet on the street".

2. Make a market vs delivering into an existing one - If you are trying to create a new market or new solution (one not defined by industry analysts or the media), it is difficult to believe that someone outside of your organization will be successful selling the solution. If the channel is already selling similar solutions, they will be successful in selling yours.

3. Expense - In today's economic reality, companies need to judge every shekel carefully. Does the cost of having direct sales people on staff (probably backed by some pre-sales support people) outweigh a discount that you have to give to the agents selling on your behalf. Remember, acquiring the customer is very expensive and the agent may be able to give you access to a new customer for you, but an existing one for them. Also, remember that there is a cost to training and maintaining a good group of resellers acting on your behalf.

4. Trust - A buyer may not trust the marketing material form a vendor, as they assume the marketing material is self-serving. The partner may be a "trusted advisor" of the buyer and may be able to give an "independent" validation to the product or service.

5. Hybrid - Is It Really Greener - A hybrid model of both direct and channel sales can generate conflict. Who owns the client? What if they call on the same client? If a direct sales person is ready to close a deal, but the customer wants to buy it from a 3rd party, how does the direct sales representative get paid? Some companies therefore choose to develop a strategy to go 100% in one direction or the other. Others choose to allow partners to call on customers of a certain size, but block them from larger companies. Others offer "double compensation" to allow for a direct sales person to sell to the client, but the client can then decide to buy however he/she wishes.

There are some good ways to validate and measure what is a better RTM for your business. Contact me for some ways to do this for your business.