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The Communication Problem in Channel Sales

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The Communication Problem in Channel Sales

LeadMethod, headquartered in Bend, Oregon, is a lead and channel management software company that works with industrial manufacturers which sell through outside reps and distributors. Co-founder and CEO Justin Johnson talked about the challenges that manufacturers and their distributors face throughout the sales process. He can be reached at jjohnson@leadmethod.com or 800.390.5578.
Modern Pumping Today: How does an industrial manufacturer sales process work? What is unique about their process?
Justin Johnson: Industrial manufacturers generally sell through a direct sales force or through a channel of outside reps and distributors. The latter is most common for manufacturers in the fluid handling market, and it certainly comes with some challenges.
Inherent to a distributor sales force model is a lack of communication and understanding between separate entities on the status of their leads and sales pipelines. Manufacturers send leads to their distributors but rarely get feedback on what happens with those leads, the opportunities they represent, forecasted sales, or the pipeline as a whole.
MPT: What are the challenges with how leads are currently managed in the channel sales process?
Justin Johnson: There are a few problems with the current lead process. The first is visibility. Manufacturers need to be able to clearly visualize and understand what is happening to the leads they send to distributors. Right now, manufacturers distribute leads by email—and then often lose track of them. Sales and marketing managers at these manufacturers have no way of knowing how quickly reps are following up or if they’re following up at all.
This lack of visibility is a real issue when you look at the statistics around sales and leads. According to the Harvard Business Review, 47 percent of leads are contacted after 24 hours or not all.  Meanwhile, 43 percent of the time the sale goes to the company that makes the first contact, according to Gartner Research. Sales managers don’t have the tools they need to understand their channel sales, and the result is missed opportunities.
The second challenge is communication and the lack of a feedback loop. Since manufacturers and distributors have different systems and tools to manage their sales process, they don’t have a centralized way to communicate about leads, opportunities, and sales performance.
MPT: What other services have tried to solve this problem?
Justin Johnson: There are several CRM (customer relationship management) software products on the market, but they don’t address the specific needs of manufacturers that sell through a channel distribution network.
CRM systems are complicated, feature-heavy, and require every user to login to the system; that combination just doesn’t work for an outside sales channel. Plus, most manufacturers use their own system—and no distributor wants to access thirty different CRM systems from thirty different manufacturers.
The lead management solution needs to be simple and not disrupt the current sales process.
MPT: What is LeadMethod and how does it provide a solution to manufacturers that sell through outside sales channels?
Justin Johnson: LeadMethod is a lead management and sales performance software built for manufacturers that sell through channel distributors. We developed this system because we clearly recognize and understand the challenging relationship between manufacturers and distributors in their sales process.
LeadMethod is a powerful, yet easy to use web-based software program that automates the lead capture and distribution process. It helps manufacturers clearly understand what is happening with their leads. Manufacturers can confirm that leads are being followed up by distributors and how quickly that happens. They can also see the opportunities and sales projections in the pipeline.
LeadMethod also features powerful reporting and analytics surrounding the data provided by sales reps. Manufacturers have a dashboard showing them sales performance details about each of their reps and distributors and the ROI for each of their lead sources, allowing them to identify opportunities and weaknesses in their channel sales process.
MPT: What benefit can technology bring to managing the lead process? And what types of companies does LeadMethod work with?
Justin Johnson: There is a huge opportunity for companies to save time, improve efficiencies, and ultimately sell more products. In fact, a study by the Gartner research group tells us companies that automate their lead management process can increase revenues by 10 percent or more in only six months.
Most of the companies that we work with are in the fluid handling business (pump, valve, motor, seal manufacturers), but we are also talking to companies in the electronic chip business and other industrial sectors. Any company that sells through outside distribution could benefit from LeadMethod. ■
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MODERN PUMPING TODAY,  January 2014
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