Kris's space

I was walking yesterday thinking about all the trustworthy people I've met in my life.  A disproportionate number of them I'd say.  So I started to analyze why that would be the case.  It turns out, for the past 16 years, I've been working within the "channel" (resellers, consultants, influencers).  Now, what does the channel have to sell to customers?  At its very essense, what they sell is TRUST.  As a customer, you trust that you somehow have gotten to know each other sufficiently well (whether you trust a DJ's taste in music so you go to their mixes on iTunes or you live down the street from your computer professional and they stop by your office from time to time).   

 

Corporations want a piece of that action more than anything else in the world because it's something they can never become because a corporation is not consistently perceived as human  (yes, there are humans within and you might like one of them, but I'm not sure that liking one person transfers to liking the company most of the time).  Community trust is the new function of a brand.  But with about 10,000x more impact. 

 

Over lunch yesterday, Robert Scoble was modeling for Buzz Bruggeman and I a "conversion system" of bringing people in and converting them to buy. (I'm sure he will relay to the world here shortly) and as he was talking, I realized that the reason corporations are so very interested in harnessing the Web 2.0 world is because Web2 (or NextWeb, or Web3 or whatever strikes your fancy) enables TRUST to established between people having personal experiences with each other every day in blog forums, social networks, etc... An entity such as Coca-cola cannot establish a relationship so Coca-cola's choices are:

1)  Spend billions on a brand that relays some notions of trust or relationship  ("have a coke and a smile")

2)  Get influential people to talk about your stuff

3)  Be part of the conversation whereby people are sharing a personal experience of some sort. 

 

I think I'd rather pick 3.  That's the channel.  That's where your corporate entity becomes a trusted advisor.

 

Nurture your advisors and foster their growth and you win.  And win.  And win.  Good luck.

I want to prove a point about the power of good channel marketing, so let's just say you sell a software product for $2,000 to small and mid-sized businesses.  This is a gross oversimplification of an ROI, but just to make a point. 

 

Scenario 1:  You go it alone.

You have a staff of 10 people.   

3 of them are FT sales.

You promote the product on the web and to regional business with your 3 highly efficient (and traveling) salespeople.

 

You set up demos with 50 new prospects a month resulting from your web downloads, mailings, call-downs and some tradeshows

Optimistically speaking, you close 60% of those each month.

 

Annual Sales Revenue:  $720,000

 

Scenario 2:  You have a channel of capable experts

You've trained these folks on how the software works, how to sell, install and support it. 

Now you have 10 technical providers (a channel) who can close more of your leads, but they still rely on leads from you. 

Now, you're able to speed up your sales cycle and close, say 70% of those leads and through word of mouth, those providers are able to generate 10% growth each year.

Annual Sales Revenue:  $924,000  (we have liftoff, but wait...)

 

Scenario 3:  You get your channel to take on lead-generating activities

Whether you dedicate resources such as templates, joint marketing funding or ready-made marketing camapaigns and support, you give enable them to easily build their own marketing and bring in new business.