Thursday, December 19, 2013

B2B Go-to-Market Strategy

Your B2B application will transform the business world… once it's in the right hands. All you have to do now is find those hands and get your application into them — but how? There are two key approaches: you can either target business clients directly or you can go through channel partners who will sell your product and/or service to your B2B clients. Both approaches have benefits and limitations.

Going to market direct gives you much more control over the sales process, from deciding how the offering should be branded and positioned to choosing how to close the deal. This approach enables you to develop close relationships with your customers; to learn about their needs and address them at first hand. The disadvantage, however, is that your rate of new deals is in direct proportion to your available sales resources. Optimizing your offering for self-service sale might help, but generally, to be successful, a B2B sale requires that human touch.

On the other hand, the channel partner strategy will enable you to leverage your sales resources to land more channel partners who will then pursue the end-user clients. While it may take longer to get a partner empowered to sell, when executed successfully, this method allows you to grow your client base faster while leveraging the same sales resources. Channel partners may be regional, national, or global players with well-established client bases to whom they can offer your product or service. Additionally, when exploring new geographic or product domains, channel partners with specific or local expertise can provide guidance and reduce the inherent risk of venturing into new territory.

However, going to market through channel partners can lead to a certain loss of control over branding and positioning. It may also hinder the development of direct relationships with the people who actually use your offering, ultimately denying you a direct insight into your clients’ needs. Moreover, if the product is particularly complex, it can take partners a long time to get up to speed and ready to sell. And, on top of all that, the infrastructure and costs required to compensate your channel partners will lower your margins.

A combination of both approaches can help to manage the limitations, but you will have to take a number of decisions about things like how to manage incentives for your sales team and how to resolve conflicts between your direct and your channel sales. The latter can be tackled by establishing clear distinctions between the product types, branding, positioning, target client sizes and sales territories that these two go-to-market strategies will use. Most importantly, internal and external transparency and fairness throughout the entire process will go a long way towards creating good will for all concerned, at whichever end of the rainbow they find themselves.

Rachel, Daniil, and Dmitry

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