CJNg _ 2.jpgHi!


    My name is c.j., and here's the November 2008 issue of Psyche-Selling TM eNewsletter.      


    As we are experiencing some sweet November rain, and as the new American President is looking at ways to improve the world economy, let's look into more ways on how we can help ourselves to generate more sales and profits.


     I've been speaking a lot lately with different Channel Sales Managers across a number of industries, and they all arrive at the same conclusion: channel partners are a pain in the a*s!


    Hence, this month's topics:

  1. How to Motivate Your Channel Partners to Contribute More to Your Bottomline; and

  2. Can You Sell What Money Can't Buy?

    This issue's main article is on  "How to Motivate Your Channel Partners to Contribute More to Your Bottomline", and as the title says, it's a common challenge faced by sales people in China, and the key strategies can be applied worldwide.


    In brief:

  • Identifying ways to select and develop Chinese channel partners that will deliver their promises to you

  • Understanding the sales strategy of each channel partner so that you can map your sales strategies according to each of their strengths

  • Commit enough time and resources to develop and motivate channel partners to sell more of your products and services

    To read the rest of this newsletter, pls. click here (http://www.psycheselling.com/page4.html).


    In the meantime, I'll also be conducting public seminars on related topics. 

How to Motivate Your Channel Partners to Contribute More to Your Bottomline


by c.j. Ng


     Given that China is such a large market, most companies will either rely 100% of their Chinese market sales efforts on a channel partner network (distributors, agents, resellers etc.), or have a hybrid of direct and partner sales networks. However, here are some of the channel partner challenges faced by many companies:

  • Many channel partners tend to over-promise and under-deliver sales results, with some cases delivering no sales results despite the claims they made;

  • Channel partners selling at the lowest possible prices, which at times may cause serious price under-cutting for your direct sales force, as well as for other partners;

  • Channel partners have no loyalty towards their principals, i.e. they will only warm up to you when your products and services are well in-demand, and deliver optimal levels of profits, etc.

    The actual list of challenges and complaints is much longer than this.  These are but just some of the most common issues companies faced when managing a channel partner network.


    To tackle the above problems, some companies in China have realised that a one-size-fits-all strategy to manage channel partners.  Instead, successful companies in China have implemented Partner Relationship Management programmes to customise the ways to develop and motivate each of them to deliver the best results.

Selecting the Right Channel Partner

Traditionally, the criteria use by most companies to select channel partners is to look at their track record, i.e. does the channel partner has a good track record of delivering large volumes of sales revenue for your kind of products and services.  However, using such simple metric to select channel partners will have some inherent flaws, such as:

  • It is unclear if the sales revenue will translate into healthy sales margins,

  • It is unclear if the same track record will be applicable to your kind of targeted customers;  and

  • It is unclear what strategies the potential channel partner to deliver results, and if such strategies match the way you do business

      Hence, to have a clearer picture of what your potential channel partners are capable of, here are some suggestions for you to observe their sales strategies, i.e. how they sell, and if those strategies are a good fit for your products and customers.  The 3 partner sales commonly identified are:

  1. The Trader;

  2. The "Mafia"; and

  3. The Consultant

       Traders are those who rely on high sales volume and high trade discounts.  Besides yourself, they are also selling for a large number of other brands.  They don't do much of the selling, relying on customers enquiries and quoting the relevant prices instead.  Instead of advising customers what will be a better choice, they simply ask customers what brand or what budget they have.  Most industrial parts, retail and travel services channel partners belong to this category.


       "Mafia" here does not refer to people with organised crime background, but rather refers to channel partners who have generated lots of sales due to their very extensive personal networks.  These end-customer networks in turn become loyal customers for the channel partner based on the relationship or "guanxi" they have.  "Mafia" type channel partners specialise in products and services where the distinction between competitors aren't clear, BUT customers prefer to buy from someone they trust, lest something goes wrong after the sale.  Channel partners who use the "mafia" sales strategy may invest substantial amount of  time and resources in wining, dining and golfing as means to cultivate the relationship. 


      Consultants are those who help customers solve problems.  Even when customers don't have problems, they'll somehow unearth one.  Channel partners that are consultants tend to focus on complex products and services to solve complex problems for the customers, such as IT, infrastructure, engineering etc.  There are the people who use the term "selling solutions" as their middle name.  In some cases, channel partners who are pursue the consultant strategy may only carry a brand or a principal, such as some partners of SAP, Dell and Motorola.

Mapping Your Sales Strategies Accordingly

       If you are a foreign company trying to penetrate a market filled with low-cost competitors like China's, chances are you'd either look for the "mafia"s with the right connections, or for the consultants who can add value that a local low-cost competitor couldn't.  Unfortunately, most of the would-be channel partners you that are available in abundance are the traders, those who will let end-customers do their price shopping, and takes no effort to add value or provide good after-sales service.


       Does that mean that the traders would have no value to you at all?  Not really.  If you are a new brand in town, or if you want to increase the market share of certain (new or strategic) products, here's what you can do:

  • Give a special discount on that product that will be close or even beat the prices of low-cost competitors; AND

  • Give attractive payouts to the traders who are taking on your products

       Obviously, if you were to give huge discounts AND give good payouts, you are going to end-up with a loss leader.  However, if you are going to make huge marketing and promotional efforts anyway, you may want to make the best use of traders to flood the news (of your promotion) to the market.  Do note that for such strategies to work, you may need to have eventual access to the end-customer (via after-sales service and maintenance contracts perhaps) so as you can cross-sell higher-value items in future.


        The other type of potential channel partners that you will bump into quite a fair bit will be those people who claim to have lots of contacts and connections in your target markets.  Sometimes, they will even want to charge upfront fees so that you can tap into their "inner circle" of contacts.


        The thing you have to be aware is that there are the real "mafia"s, and there are those who simply make empty claims.  Here are some simple tips when selecting the right "mafia":

  • If possible, get the channel partner to purchase upfront inventory at very attractive prices.  If their connections are so good as claimed, they will make money in no time;

  • If the above is not possible, invite the potential "mafia" to bring along some potential end-customers to some wining, dining or golfing.  There key isn't about whether there will be people turning up (in some cases, people just turn-up to get a free meal), but to allow you to gauge if those end-customers are the people you want to sell to

        Generally, successful "mafia"s are very protective of their contacts, and will jump instantly if you are being perceived to poach their customers.  To them, the customers belong to, and only to them.  These are the contacts they have taken years to cultivate, and they will protect them with their lives.  Hence, whether you are providing pre-sales technical support, or post-sale maintenance contracts, be sure to communicate the benefits clearly, and put the "mafia"s at ease.  Also, be sure that your product and service quality is up to par when selling to customers of the "mafia", because you will lose the partner and all of their contacts if there are customer complaints.


       Consultants are the rarest of breeds, and are largely found only in the IT industry.  Even in the consulting or engineering industries where partners with the consultant sales strategies are badly needed, they are still extremely hard to find.  Channel partners who are using the consultant sales strategies tend to be ex-technical people who are sick and tired of being technical people.  They also believe that they can deliver better value and service than their previous employer, and that's why they are in business themselves.


    While consultants can add a lot of value to customers, they lack what the traders and "mafia"s have, i.e. they don't have the resources to prospect for a lot of customers, and they may lack the connections too.  Some companies have helped these consultant partners to get a head-start by providing leads and other means of market-access, and just let them deliver what the customer wants.


Committing Time and Resources on your Partners


     Many companies equate spending time with channel partners with holding an annual partner/ reseller/ distributor convention, where there will be lots of food and drinks, some announcements and some pep talks disguised as sales training.


     The problem with that is, all the other brands that these partners are representing will also be holding such conventions as well, and to them, such events are nothing more than having free food and drinks in a 5-star hotel.  The partner convention is NOT going to give you additional "mindshare" from each channel partner, and it is unlikely that they will be motivated to sell more of your products as such.  This is not to say that the partner convention is unimportant.  Rather, if you want to get better results, more needs to be done.  Furthermore, the more engaged your channel partners are, the less likely they will be under-cutting prices or engaging in other vicious competition with you (or other partners).


     The things you can provide for channel partners may include:

  • Providing periodical promotions or new product launches for the traders;

  • Providing product benefit workshops for "mafia"s so that they appear more professional in front of their contacts;

  • Providing training on how to sell complex solutions for the consultants

     Obviously, not all channel partners, be they traders, "mafia"s or consultants, are equal, or deserve equal attention from you.  Just like defining and managing key accounts, you will have to prioritise which are those whom will more add value to you in the sustainable long-term, and then commit enough time and resources on them.


     For more information on how you can get better results from your channel partners, please e-mail info@directions-consulting.com or call +86-136 7190 2505 or Skype: cydj001 and arrange to buy me a mocha.  All information shall be kept in confidence.

Power Breakfast Hour: 16 December 2008

How to Motivate Your Channel Partners to Contribute More to Your Bottomline


     Join China Sales Leadership and Performance Coach c.j. Ng in this one-hour breakfast meeting where he will be sharing with you the following insights:

  • What kind of sales strategies your channel partners have, and how to play to their strengths;
  • Understanding and providing the right kind of support your channel partner needs; and
  • Motivating your channel partners to make them sell lots more for you

VENUE: Le Equilles Restaurant, Ground Floor, Xin Jin Qiao Plaza, 23 Beijing West Road (by Xizang Middle Road), Shanghai.  Pls. enter via Citadines Apart'Hotel at 55 Beijing West Road.

DATE: Tuesday, 18 November 2008


TIME: from 08:00 a.m. - 09:00 a.m.

PRICE: Just Pay for your Own Breakfast (Est. RMB 50-100)

     To make this a more conducive discussion, we are expecting a small group of about 15 people only. The previous Power Breakfast Hour session was a sold-out and over-booked event within a week of notice. Please e-mail your registrations to sales@directions-consulting.com

      Pls. check out our web sites www.directions-consulting.com and www.psycheselling.com for more inspiration.

Practical Tips for Managers:
Can You Sell What Money Can't Buy?

by c.j. Ng

I was on a flight from Singapore to Bangalore (India) recently on Singapore Airlines, and I was travelling on Diwali (or Deepavali, as it's spelt in Singapore), a major Indian festival leading to the Hindu new year.

In most flights, most airlines will do their very best to reduce your inconveniences for your journey.  However, for Singapore Airlines, they do whatever it takes to make sure you have a great, enjoyable trip.  The airline provided what was to me the best South Indian food I had in years, when most airlines are struggling to provide decent food.  They made some great authentic Briyani rice where you can really taste the fragrant of the spices in the rice.  The masala tea they served is as good as the one I had in the 5-star hotel I stayed when I landed.  Their Diwali-desert-special is simply heaven.


This is truly a 5-star hotel in the air, and I'm just flying in Economy class.  Indeed, some experience that money can't buy.


Another example of selling something that money can't buy is Ascott the Residence.  The Ascott is a premier, leading global serviced apartment provider.  To make their long-stay guests feel more at home, they organise get-together cocktail parties for the breadwinners, shopping trips for the homemakers and baseball competitions for the kids.


The thing that money can't buy isn't so  much these free activities that the Ascott provides.  It's the sense of community or the home-away-from-home feeling that their guests experienced during their stay.  Imagine that if you are out-stationed for a couple of years in a foreign country with strange customs and you don't speak the language.  You will treasure every chance you have to chat up with others of similar cultural background as you are, and the Ascott does whatever it takes to make sure you feel at home during your entire stay.


Is this concept of "what money can't buy" confined to just the luxurious services industry?  Fortunately not.


Air Products is a leading provider of merchant gases, i.e. they provide industrial gases for manufacturers (or even hospitals) who buy the gases (pure nitrogen, hydrogen, oxygen etc.) in small quantities.  In the past, they just supply gases-in-containers.  Now, they are exploring ways that they can help customers store the gases longer, in more stable conditions and administering the gases in safer ways.  They are giving free expert advice to their customers that will help customers improve efficiency (i.e. save money by buying less) with their gas usage.  Again, this is what money can't buy.


The question is: if you were to sell something that money can't buy, will that translate directly into more sales and profits?  Yes, but not always.


What it really does is that you will get more loyal customers who are much less likely to defect when competitors are slashing prices.  While new customers may be skeptical about your services that "money can't buy", existing customers will appreciate it a lot more, and are more likely to see beyond price for the value they get.


If you need to find out more about how you too can sell what money can't buy, you can send your queries to info@psycheselling.com .  I will be signing up for Krisflyer, Singapore Airlines' frequent flyer programme, in the meantime. 

About PsycheSelling.com

Psyche-Selling TM is a wholly-owned brand of Directions Management Consulting Pte Ltd that specialises in the field of improving sales performance by enhancing the performance of the entire sales team.  Apart from the regular "selling skills training", Psyche-Selling TM conducts pre- and post-training analysis, interviews, monitoring and reviews, working closely with managers and even senior management, to deliver real improvements in sales leadership and performance.   

Directions Management Consulting Pte Ltd is a Human Capital Integrator that helps companies to improve business performances through people.

Psyche-Selling TM is currently a co-affiliate of the  HR Chally Group, together with  Shi Bisset & Associates, to help you identify gaps in your current sales force, and then formulate ways to help you get better results.

The HR Chally Group is a talent management, leadership development, and sales improvement corporation providing personnel assessment and research services for over 35 years.  Chally is recognised as an international technology leader in scientific assessment and prediction for selection, job alignment and leadership development, and for management assessment.  For more information about implementing Total Quality Sales Management in your company, pls. log on to http://www.psycheselling.com/TQSM-ExecBrief_email.pdf to get more insights.

Enquiries and suggestions, pls. e-mail info@psycheselling.com or visit www.psycheselling.com