Feedback For Sun: Do The Math When It Comes To Your Indirect Sales Force
I don’t purport to have all the answers as to what ails the company overall, but here is some public feedback I am certain of: Sun has a woefully undersized channel. It is and has been a problem the company has largely ignored for years.
The solution providers it does have are very good, but sales is a volume game.
If I make 10 sales calls today and you make five, I’m likely to capture more business than you do.
Yes, I’ve heard all the arguments surrounding the 80/20 rule. It’s in all the business books, and far be it from me to argue against its validity. Instead, let me argue in favor of it to prove why more feet on the street selling means more business.
If I have an indirect channel of 600 solution providers and 20 percent of them are going to do 80 percent of my business, it fundamentally means that 120 of my 600 sales drivers are top-tier and able to drive lots of business for me.
If I compete against a company that has just as strong a product lineup as I do and all other things are equal—including price—but that company has 10,000 solution providers selling its products, how do I compare?
Well, if we do the math again, instead of having 120 top-tier sales drivers, my competitor has 2,000 top-tier sales drivers in the market every day selling its product.
So let’s assume that the bottom 80 percent of my channel partners make two sales calls per day. That means 80 percent of my less-than-stellar performers are making 960 sales calls per day.
If my top 20 percent are doing just one more call per day, then they are making 360 calls for a total of 1,320 sales calls per day. Now, to keep this simple, let’s assume that every successful sales call is for exactly the same amount of money, and that the top-tier solution providers are successful 80 percent of the time and the bottom tier are successful just 20 percent of the time. Heck, why shouldn’t the 80/20 rule apply here as well?
The top tier is generating 288 successful calls per day and the bottom 80 percent are generating 192 successful calls for a total of 480 successful calls, with my top 20 percent generating almost 100 more successful calls each and every day.
Now let’s take a look at my competitor. It has 2,000 solution providers making three calls per day, or 6,000 calls with an 80 percent success rate, meaning it is getting business from 4,800 customers every day through its top solution provider partners.
But what about the bottom 80 percent that make just two calls a day and have only a 20 percent success rate?
Well, 8,000 partners making two calls a day with just a 20 percent success rate generate business in an additional 3,200 accounts for a total of 8,000 successful calls each and every day. Don’t you just love math?
Any way you argue this equation, bigger numbers produce more sales. But if you also consider that a smaller channel means there are some customers where my competitor isn’t even coming up against me because I don’t have the feet on the street, then you start to realize that my enemy’s success rate increases just because I’m not in the fight. In this example, my competitor finds success in 7,520 accounts every day without any competition from me. No wonder the success rate is likely to go up.
Other problems aside, it’s hard to argue that Sun wouldn’t see real improvement merely by doing what most of its competitors have already done—and that’s expand the size of its indirect sales force.
Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].