How to Build a Successful Channel Sales Model in Asia

Jul 20, 2020
Asia Market Entry
How to Build a Successful Channel Sales Model in Asia

When entering any new market many businesses are inclined to think first about their direct sales team and the direct sales model.

However, the indirect sales model is well proven in the software and SaaS industries in Asia as it is in the rest of the world. Over the past few years, we have been lucky enough to see this model in action in Asia specifically observing how both the direct and indirect sales models can be mixed to create the foundation of a successful sales model in the region.

In this post, we are taking the point of view of an international software vendor entering into a partnership with an organization in Asia in the form of a distributor, value-added reseller, or a simple referral partner.

Any Regional Sales Manager in Asia has one key question in their mind:  ‘How do I build a qualified pipeline in several totally different markets with the limited resources I have to hand?’ A really effective way of doing this, is through a channel model.

Firstly, it is important to already have a developed Partner Program. This is a separate and equally important topic. For the sake of simplification, let’s imagine we are lucky enough to have a structured and proven Partner Program in place at our company. Now, expanding the program into Asia, there are some important considerations to make it successful.

1. Let your Partner take care of cultural nuances

As a Regional Sales Manager in Asia, you will be given the difficult task of becoming an expert in communicating and building relationships with people from totally different cultures and backgrounds. In Europe or North America, often we’ve built enough cultural knowledge to navigate this fairly well without making too-many missteps (although we can all remember the embarrassing times when this wasn’t always the case!). In Asia, one of your partner’s key value-adds will be their local language ability and deftness at quickly building relationships with the end customer, by being naturally familiar with their culture and background. Let your partner take the lead in this area, to support the selling process with a cultural sensitivity that will be valuable right from the initial contact through to negotiation and closing.

2. Leverage your Partner’s local market reputation

As an international software vendor coming into a region with few local reference customers, it’s going to take time to build some local credibility. Your China-based prospects will not care about your great customer base in the US as much as you think they will or would like them to. Partnering with an established distributor or value-added reseller that has credibility and a customer base in the market is a real asset. Prospective customers can be confident that they will be supported locally by your partner, who may be more attuned to their specific needs than perhaps your company is. Your partner will lend their local credibility to your product, pairing their local market expertise to your best-in-class software solution, which can really strengthen your proposition to prospective customers. Finding a partner with a strong standing in the local market is important for these reasons.

3. Learn from your Partner’s understanding of the market, and even make product changes based on this

Linked to the previous point, your partner will have the pulse of the local market. They will understand what level of support customers will expect, the price they are willing to pay, and which product features they require. This local market knowledge is incredibly valuable, and software providers would be silly not to pay it real attention and then act on it. In our experience, there isn’t a software provider that hasn’t had to make changes in some or all of these areas when entering Asia (at least those who have entered Asia successfully). Listen to your partner and consider which of these changes should be made to your strategy, even those that may not be immediately in alignment with your strategy in your home market. It will both strengthen your relationship and help your partner to sell successfully.

4. Use your Partner’s existing customers as your first target market

Partners will have existing customers in other areas of their business. In most cases, your product will be relevant to them. Here is a ready-made base of prospects that your partner can approach with your solution. Use this as a place for your partnership’s first steps, as your partner gets to know your selling process and product more intimately. The warm relationship with these customers is also a great testbed to refine and localize the selling strategy before expanding out to the broader market.

5. Help your Partner be successful and your success should take care of itself

Never forget the original reason why your partner chose your solution - they believed that they could sell it successfully and use the profits to grow their business. If you help them in achieving this goal, you will achieve your own too. As you progress in your partnership, you should care about your solution can build a sustainable business for your partner. Advice on how other partners are developing complementary services that wrap around your solution. Bring in your professional service team to advise how your partner build their own professional service practice. Adapt the commercial model as business conditions change and ensure it is always making financial sense for your partner to stay with you. Look after this, and you should have a partner for life.

This list is simply some of the things we think Channel Managers should focus on when setting up a Partner Program in Asia. While it takes time to build the foundations, the long term results will pay for this many times over.