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Dan McDermott
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Min Read
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March 14, 2024

How can channel sales strategies help your business overcome growth obstacles and achieve the next level of success? 

In this article, we will delve into the key aspects of channel selling for B2B companies, providing insights and solutions to drive revenue growth and market expansion.

What is Channel Selling?

"Channel selling" is a strategy where a company sells its products or services through third-party intermediaries or partners, rather than directly to the end customers. These intermediaries, known as channel partners, can include distributors, resellers, value-added resellers (VARs), agents, brokers, and other entities that facilitate the sales process to the final business customers.

The primary goal of channel selling is to leverage the strengths, market reach, and customer relationships of these partners to increase sales volumes, penetrate new markets, and achieve greater market coverage more efficiently than could be accomplished through direct sales efforts alone.

Channel selling allows manufacturers and primary vendors to focus on product development and production, leaving the sales and distribution logistics to partners who have the necessary expertise and infrastructure.

What are the Different Types of Channel Partners? 

  1. Distributors: Ideal for businesses looking to expand their market reach without directly managing logistics and distribution. Distributors can offer rapid market penetration, especially in new geographic areas.
  2. Resellers: Useful for products that do not require significant customization. Resellers can help manufacturers reach smaller businesses or niche markets more effectively.
  3. Value-Added Resellers (VARs): Particularly valuable in technology and software industries, where products often need customization and integration with existing systems. VARs add significant value by tailoring products to specific customer needs.
  4. Agents and Brokers: Effective for businesses that prefer to outsource their sales efforts, especially when targeting specific industries or complex markets where specialized knowledge is beneficial.
  5. Affiliates: Suitable for B2B companies with online sales strategies. Affiliates can help drive online traffic and generate leads or sales through their networks and platforms.
  6. OEM (Original Equipment Manufacturer) Partnerships: Best for manufacturers whose products can be incorporated into other products. This channel is common in the electronics, automotive, and machinery industries.
  7. Strategic Alliances or Partnerships: Ideal for companies looking to offer comprehensive solutions that require collaboration, such as combining technology platforms or co-developing new products.
  8. E-commerce Marketplaces: Increasingly viable for B2B sales, especially for standardized products. Marketplaces can offer access to a wide range of buyers and simplify the purchasing process.
  9. Dealer Networks: Effective for companies selling complex or high-value products that require personal selling, demos, installation, or after-sales service. Dealers provide a local presence and expertise.

Channel sales metrics

Tracking the right metrics is crucial for B2B companies to evaluate the effectiveness of their channel sales strategies. One key metric to monitor is the conversion rate, which measures the percentage of leads that turn into actual sales.

By analyzing this metric, companies can identify areas for improvement in their sales processes and partner performance. Another important metric is the average deal size, which helps companies understand the value of each sale and the overall revenue generated through channel sales. Monitoring this metric can also provide insights into product performance and market demand.

You should also track the sales cycle length, which measures the time it takes from initial contact with a lead to closing the sale. A shorter sales cycle indicates efficiency and effectiveness in the sales process. Moreover, tracking partner engagement and satisfaction levels can help companies assess the strength of their relationships with channel partners. By monitoring these key metrics, B2B companies can make data-driven decisions to optimize their channel sales strategies and drive revenue growth.

Channel sales training

Effective training is essential for ensuring that channel partners have the knowledge and skills to represent B2B companies' products or services accurately and persuasively. One way for companies to provide training is through online learning platforms, which offer flexibility and accessibility for partners to access training materials at their convenience. Companies can create interactive modules, videos, and quizzes to engage partners and reinforce key selling points. Additionally, hosting live webinars or training sessions can facilitate real-time interaction and Q&A sessions to address partners' specific needs and challenges.

Furthermore, B2B companies should develop comprehensive training programs that cover product knowledge, sales techniques, market trends, and competitive analysis. By equipping channel partners with in-depth knowledge and understanding of the products or services they are selling, companies can empower partners to have meaningful conversations with potential customers and address their pain points effectively. Providing ongoing training and support is also crucial to keep partners updated on new product features, industry developments, and sales strategies. By investing in continuous training, B2B companies can enhance partner performance and drive sales growth.

Channel sales technology

In today's digital age, leveraging technology is essential for B2B companies to streamline channel sales processes and enhance efficiency. Customer Relationship Management (CRM) software is a fundamental technology that enables companies to manage customer interactions, track leads, and monitor sales activities. By using a CRM system, companies can gain valuable insights into customer behavior, preferences, and buying patterns, allowing them to tailor their sales strategies accordingly. Moreover, CRM software can help companies automate repetitive tasks, such as data entry and follow-up emails, freeing up time for sales teams to focus on building relationships and closing deals.

Another essential technology for channel sales is Partner Relationship Management (PRM) software, which is specifically designed to manage relationships with channel partners. PRM software provides tools for partner onboarding, training, performance tracking, and communication, enabling companies to collaborate effectively with their partners and drive mutual success. By centralizing partner data and activities in a PRM system, companies can streamline partner management processes, improve visibility into partner performance, and strengthen partner relationships. Additionally, integrating PRM software with CRM systems can create a seamless flow of information between companies, partners, and customers, enhancing collaboration and driving sales growth.

Channel sales best practices

Implementing best practices is essential for B2B companies to maximize the effectiveness of their channel sales efforts and achieve sustainable growth. One best practice is to establish clear communication channels with channel partners to ensure alignment on sales goals, expectations, and strategies. By fostering open communication and regular updates, companies can build trust with partners, address challenges proactively, and drive collaboration towards shared objectives. Additionally, providing partners with access to sales and marketing resources, such as collateral, presentations, and product information, can empower partners to represent the company effectively and drive sales success.

B2B companies should prioritize partner enablement by offering training, support, and resources to help partners succeed in selling their products or services. By investing in partner enablement programs, companies can equip partners with the knowledge, tools, and skills needed to engage customers, overcome objections, and close deals. Encouraging feedback from partners and incorporating their input into sales strategies can also enhance partner engagement and loyalty. Furthermore, recognizing and rewarding top-performing partners through incentives, rewards, and recognition programs can motivate partners to achieve sales targets and drive revenue growth. By implementing these best practices, B2B companies can strengthen their channel sales relationships and maximize sales performance.

Channel sales compensation

Designing a competitive and motivating channel sales compensation plan is essential for B2B companies to incentivize their partners and drive performance. One approach is to offer tiered commission structures based on sales performance, where partners earn higher commissions for exceeding sales targets. By setting clear and achievable sales goals and providing attractive commission rates, companies can motivate partners to focus on driving revenue and achieving results. Additionally, incorporating performance bonuses, SPIFFs (Sales Performance Incentive Funds), and rewards for reaching specific milestones or objectives can further incentivize partners to excel in their sales efforts. This is similar to how you would reward and incentivize your salespeople.

Furthermore, B2B companies should consider aligning partner incentives with strategic business objectives to ensure that partners are driving the desired outcomes. By linking compensation to key performance indicators (KPIs) such as sales growth, customer acquisition, and market share, companies can reinforce partners' focus on activities that contribute to overall business success. Offering non-monetary incentives, such as exclusive access to training programs, marketing support, or co-marketing opportunities, can also enhance partner motivation and engagement. Moreover, providing transparent and timely commission payouts, along with performance feedback and recognition, can build trust and loyalty with partners, fostering long-term relationships and driving sustained sales performance.

Channel sales automation

Automation tools play a critical role in simplifying and optimizing channel sales operations for B2B companies, enabling them to streamline processes, improve efficiency, and drive productivity. One essential automation tool is a Partner Portal, which serves as a centralized platform for partners to access sales and marketing resources, training materials, product information, and communication tools. By providing partners with self-service capabilities through a Partner Portal, companies can empower partners to find the information they need quickly, collaborate effectively, and stay informed about the latest updates and promotions. Partner Portals can also facilitate seamless communication between companies and partners, enabling real-time collaboration and support.

Additionally, companies can leverage marketing automation software to automate lead nurturing, email campaigns, and customer segmentation, enabling them to engage prospects at every stage of the sales funnel effectively. By using Marketing Automation tools, companies can personalize communications, track customer interactions, and measure campaign performance, allowing them to optimize marketing strategies and drive lead conversion. Moreover, integrating Marketing Automation software with CRM systems can create a unified view of customer data and activities, enabling companies to deliver targeted and relevant content to prospects and partners. By automating marketing processes, B2B companies can increase efficiency, reduce manual tasks, and accelerate sales cycles, leading to improved results and revenue growth.

Channel sales challenges

Implementing channel sales strategies can present various challenges for B2B companies, requiring them to navigate complexities, overcome obstacles, and adapt to changing market dynamics. One common challenge is partner recruitment and onboarding, as companies need to identify and onboard the right partners who align with their brand values, target market, and sales objectives. To overcome this challenge, companies can establish clear partner criteria, conduct thorough due diligence, and provide comprehensive onboarding programs to ensure that partners understand the company's products, processes, and expectations. Building strong relationships with partners from the outset and offering ongoing support can also help companies overcome partner recruitment challenges and drive successful partnerships.

Another challenge that B2B companies face is channel conflict, where conflicts arise between direct sales teams and channel partners over customer ownership, pricing, or territory rights. To address channel conflict, companies can establish clear rules of engagement, define territories, and implement transparent communication channels to prevent misunderstandings and disputes. By fostering collaboration and alignment between direct and indirect sales channels, companies can create a cohesive sales ecosystem that maximizes revenue opportunities and minimizes conflicts. Moreover, providing incentives for collaboration, such as shared revenue goals or joint marketing initiatives, can encourage teamwork and mutual support between sales teams and partners, fostering a harmonious sales environment.

Channel sales performance

Measuring and improving the performance of channel sales partners is essential for B2B companies to drive revenue growth, optimize sales strategies, and maximize profitability. One way to measure partner performance is through Key Performance Indicators (KPIs) such as sales conversion rates, lead generation, customer acquisition, and revenue contribution. By tracking these KPIs, companies can assess partner effectiveness, identify areas for improvement, and align partner activities with business objectives. Providing partners with performance dashboards or reports that highlight key metrics and benchmarks can also enable partners to track their progress, set goals, and focus on activities that drive results.

Moreover, B2B companies can conduct regular performance reviews and feedback sessions with partners to provide guidance, support, and coaching for improvement. By offering constructive feedback, sharing best practices, and addressing performance gaps, companies can help partners enhance their sales skills, overcome challenges, and achieve their sales targets. Implementing performance improvement plans, training programs, and incentives for top performers can further motivate partners to excel and drive revenue growth. Additionally, leveraging data analytics and sales forecasting tools can help companies identify trends, opportunities, and areas for optimization, enabling them to make data-driven decisions to improve channel sales performance and achieve sustainable business growth.

Conclusion

Do you have questions about how you can incorporate channel selling into your wider sales strategy?

You can get in touch with us here. In the meantime, you can download our free sales resources below.

{{download-all}}

 

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Channel Selling Strategies for B2B Companies

Play icon- Vouris Images
Author Icon- Vouris Images
Dan McDermott
Book Icon- Vouris Images
14 min Read

How can channel sales strategies help your business overcome growth obstacles and achieve the next level of success? 

In this article, we will delve into the key aspects of channel selling for B2B companies, providing insights and solutions to drive revenue growth and market expansion.

What is Channel Selling?

"Channel selling" is a strategy where a company sells its products or services through third-party intermediaries or partners, rather than directly to the end customers. These intermediaries, known as channel partners, can include distributors, resellers, value-added resellers (VARs), agents, brokers, and other entities that facilitate the sales process to the final business customers.

The primary goal of channel selling is to leverage the strengths, market reach, and customer relationships of these partners to increase sales volumes, penetrate new markets, and achieve greater market coverage more efficiently than could be accomplished through direct sales efforts alone.

Channel selling allows manufacturers and primary vendors to focus on product development and production, leaving the sales and distribution logistics to partners who have the necessary expertise and infrastructure.

What are the Different Types of Channel Partners? 

  1. Distributors: Ideal for businesses looking to expand their market reach without directly managing logistics and distribution. Distributors can offer rapid market penetration, especially in new geographic areas.
  2. Resellers: Useful for products that do not require significant customization. Resellers can help manufacturers reach smaller businesses or niche markets more effectively.
  3. Value-Added Resellers (VARs): Particularly valuable in technology and software industries, where products often need customization and integration with existing systems. VARs add significant value by tailoring products to specific customer needs.
  4. Agents and Brokers: Effective for businesses that prefer to outsource their sales efforts, especially when targeting specific industries or complex markets where specialized knowledge is beneficial.
  5. Affiliates: Suitable for B2B companies with online sales strategies. Affiliates can help drive online traffic and generate leads or sales through their networks and platforms.
  6. OEM (Original Equipment Manufacturer) Partnerships: Best for manufacturers whose products can be incorporated into other products. This channel is common in the electronics, automotive, and machinery industries.
  7. Strategic Alliances or Partnerships: Ideal for companies looking to offer comprehensive solutions that require collaboration, such as combining technology platforms or co-developing new products.
  8. E-commerce Marketplaces: Increasingly viable for B2B sales, especially for standardized products. Marketplaces can offer access to a wide range of buyers and simplify the purchasing process.
  9. Dealer Networks: Effective for companies selling complex or high-value products that require personal selling, demos, installation, or after-sales service. Dealers provide a local presence and expertise.

Channel sales metrics

Tracking the right metrics is crucial for B2B companies to evaluate the effectiveness of their channel sales strategies. One key metric to monitor is the conversion rate, which measures the percentage of leads that turn into actual sales.

By analyzing this metric, companies can identify areas for improvement in their sales processes and partner performance. Another important metric is the average deal size, which helps companies understand the value of each sale and the overall revenue generated through channel sales. Monitoring this metric can also provide insights into product performance and market demand.

You should also track the sales cycle length, which measures the time it takes from initial contact with a lead to closing the sale. A shorter sales cycle indicates efficiency and effectiveness in the sales process. Moreover, tracking partner engagement and satisfaction levels can help companies assess the strength of their relationships with channel partners. By monitoring these key metrics, B2B companies can make data-driven decisions to optimize their channel sales strategies and drive revenue growth.

Channel sales training

Effective training is essential for ensuring that channel partners have the knowledge and skills to represent B2B companies' products or services accurately and persuasively. One way for companies to provide training is through online learning platforms, which offer flexibility and accessibility for partners to access training materials at their convenience. Companies can create interactive modules, videos, and quizzes to engage partners and reinforce key selling points. Additionally, hosting live webinars or training sessions can facilitate real-time interaction and Q&A sessions to address partners' specific needs and challenges.

Furthermore, B2B companies should develop comprehensive training programs that cover product knowledge, sales techniques, market trends, and competitive analysis. By equipping channel partners with in-depth knowledge and understanding of the products or services they are selling, companies can empower partners to have meaningful conversations with potential customers and address their pain points effectively. Providing ongoing training and support is also crucial to keep partners updated on new product features, industry developments, and sales strategies. By investing in continuous training, B2B companies can enhance partner performance and drive sales growth.

Channel sales technology

In today's digital age, leveraging technology is essential for B2B companies to streamline channel sales processes and enhance efficiency. Customer Relationship Management (CRM) software is a fundamental technology that enables companies to manage customer interactions, track leads, and monitor sales activities. By using a CRM system, companies can gain valuable insights into customer behavior, preferences, and buying patterns, allowing them to tailor their sales strategies accordingly. Moreover, CRM software can help companies automate repetitive tasks, such as data entry and follow-up emails, freeing up time for sales teams to focus on building relationships and closing deals.

Another essential technology for channel sales is Partner Relationship Management (PRM) software, which is specifically designed to manage relationships with channel partners. PRM software provides tools for partner onboarding, training, performance tracking, and communication, enabling companies to collaborate effectively with their partners and drive mutual success. By centralizing partner data and activities in a PRM system, companies can streamline partner management processes, improve visibility into partner performance, and strengthen partner relationships. Additionally, integrating PRM software with CRM systems can create a seamless flow of information between companies, partners, and customers, enhancing collaboration and driving sales growth.

Channel sales best practices

Implementing best practices is essential for B2B companies to maximize the effectiveness of their channel sales efforts and achieve sustainable growth. One best practice is to establish clear communication channels with channel partners to ensure alignment on sales goals, expectations, and strategies. By fostering open communication and regular updates, companies can build trust with partners, address challenges proactively, and drive collaboration towards shared objectives. Additionally, providing partners with access to sales and marketing resources, such as collateral, presentations, and product information, can empower partners to represent the company effectively and drive sales success.

B2B companies should prioritize partner enablement by offering training, support, and resources to help partners succeed in selling their products or services. By investing in partner enablement programs, companies can equip partners with the knowledge, tools, and skills needed to engage customers, overcome objections, and close deals. Encouraging feedback from partners and incorporating their input into sales strategies can also enhance partner engagement and loyalty. Furthermore, recognizing and rewarding top-performing partners through incentives, rewards, and recognition programs can motivate partners to achieve sales targets and drive revenue growth. By implementing these best practices, B2B companies can strengthen their channel sales relationships and maximize sales performance.

Channel sales compensation

Designing a competitive and motivating channel sales compensation plan is essential for B2B companies to incentivize their partners and drive performance. One approach is to offer tiered commission structures based on sales performance, where partners earn higher commissions for exceeding sales targets. By setting clear and achievable sales goals and providing attractive commission rates, companies can motivate partners to focus on driving revenue and achieving results. Additionally, incorporating performance bonuses, SPIFFs (Sales Performance Incentive Funds), and rewards for reaching specific milestones or objectives can further incentivize partners to excel in their sales efforts. This is similar to how you would reward and incentivize your salespeople.

Furthermore, B2B companies should consider aligning partner incentives with strategic business objectives to ensure that partners are driving the desired outcomes. By linking compensation to key performance indicators (KPIs) such as sales growth, customer acquisition, and market share, companies can reinforce partners' focus on activities that contribute to overall business success. Offering non-monetary incentives, such as exclusive access to training programs, marketing support, or co-marketing opportunities, can also enhance partner motivation and engagement. Moreover, providing transparent and timely commission payouts, along with performance feedback and recognition, can build trust and loyalty with partners, fostering long-term relationships and driving sustained sales performance.

Channel sales automation

Automation tools play a critical role in simplifying and optimizing channel sales operations for B2B companies, enabling them to streamline processes, improve efficiency, and drive productivity. One essential automation tool is a Partner Portal, which serves as a centralized platform for partners to access sales and marketing resources, training materials, product information, and communication tools. By providing partners with self-service capabilities through a Partner Portal, companies can empower partners to find the information they need quickly, collaborate effectively, and stay informed about the latest updates and promotions. Partner Portals can also facilitate seamless communication between companies and partners, enabling real-time collaboration and support.

Additionally, companies can leverage marketing automation software to automate lead nurturing, email campaigns, and customer segmentation, enabling them to engage prospects at every stage of the sales funnel effectively. By using Marketing Automation tools, companies can personalize communications, track customer interactions, and measure campaign performance, allowing them to optimize marketing strategies and drive lead conversion. Moreover, integrating Marketing Automation software with CRM systems can create a unified view of customer data and activities, enabling companies to deliver targeted and relevant content to prospects and partners. By automating marketing processes, B2B companies can increase efficiency, reduce manual tasks, and accelerate sales cycles, leading to improved results and revenue growth.

Channel sales challenges

Implementing channel sales strategies can present various challenges for B2B companies, requiring them to navigate complexities, overcome obstacles, and adapt to changing market dynamics. One common challenge is partner recruitment and onboarding, as companies need to identify and onboard the right partners who align with their brand values, target market, and sales objectives. To overcome this challenge, companies can establish clear partner criteria, conduct thorough due diligence, and provide comprehensive onboarding programs to ensure that partners understand the company's products, processes, and expectations. Building strong relationships with partners from the outset and offering ongoing support can also help companies overcome partner recruitment challenges and drive successful partnerships.

Another challenge that B2B companies face is channel conflict, where conflicts arise between direct sales teams and channel partners over customer ownership, pricing, or territory rights. To address channel conflict, companies can establish clear rules of engagement, define territories, and implement transparent communication channels to prevent misunderstandings and disputes. By fostering collaboration and alignment between direct and indirect sales channels, companies can create a cohesive sales ecosystem that maximizes revenue opportunities and minimizes conflicts. Moreover, providing incentives for collaboration, such as shared revenue goals or joint marketing initiatives, can encourage teamwork and mutual support between sales teams and partners, fostering a harmonious sales environment.

Channel sales performance

Measuring and improving the performance of channel sales partners is essential for B2B companies to drive revenue growth, optimize sales strategies, and maximize profitability. One way to measure partner performance is through Key Performance Indicators (KPIs) such as sales conversion rates, lead generation, customer acquisition, and revenue contribution. By tracking these KPIs, companies can assess partner effectiveness, identify areas for improvement, and align partner activities with business objectives. Providing partners with performance dashboards or reports that highlight key metrics and benchmarks can also enable partners to track their progress, set goals, and focus on activities that drive results.

Moreover, B2B companies can conduct regular performance reviews and feedback sessions with partners to provide guidance, support, and coaching for improvement. By offering constructive feedback, sharing best practices, and addressing performance gaps, companies can help partners enhance their sales skills, overcome challenges, and achieve their sales targets. Implementing performance improvement plans, training programs, and incentives for top performers can further motivate partners to excel and drive revenue growth. Additionally, leveraging data analytics and sales forecasting tools can help companies identify trends, opportunities, and areas for optimization, enabling them to make data-driven decisions to improve channel sales performance and achieve sustainable business growth.

Conclusion

Do you have questions about how you can incorporate channel selling into your wider sales strategy?

You can get in touch with us here. In the meantime, you can download our free sales resources below.

{{download-all}}

 

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Dan McDermott, our Chief Marketing Officer, is a seasoned copywriter and strategist who has helped over 500 businesses carve out a competitive edge. With a career spanning nearly 20 years, Dan has fine-tuned the art of developing compelling messaging that accentuates a business's strengths, setting it apart from competitors.

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