[Sales] How to manage channel partners and lead through influence with Eszter Takacs

This will sound very obvious, but it is so important, is really building strong relationship and being there and available for them. That is very important. Why? Because you want to make them feel like they are part of your team. It's a little bit easier, I think, when you're selling innovation, because when you're very much excited about selling what you sell, you can embark them on the same journey. And I worked with a lot of general partners who were really excited with that idea of, you know, really making that innovation happen and changing, you know, pushing Life science. This is why it's important that you find a partner that's aligned with the dynamic of your own company, with the goals, etc. So that's. The recruiting process is quite important so that you can change a lot already if you have the right partner. But making them really feel like part of your team is really important.

Before we get into today's show, I wanted to tell you a little bit about what we have going on over here at Succession. So Succession is a Life Science sales membership that includes on demand courses to uplevel your sales skills, resources to plan and execute your sales process, a community for peer to peer networking and learning, and live workshops delivered by experts twice a month. You can get access to all of this as an individual for just $79 a month, or you can uplevel your entire sales team with courses and customized learning designed for each individual rep. Come and join us over at Succession Bio. Okay, let's dive back into the show. Hey, welcome to another episode of the Sales DNA podcast. Really excited for this one. Today we're going to talk all about channel partnerships and how you can build up your channel, network and distributors. And so on this episode we have Esther Tolkach and she calls herself the friendly neighborhood commercial Swiss army knife. So lots of different experiences that she has. And most recently she was the channel manager at Bionano. So, Nick, I know we talked about a lot of interesting stuff here. What stood out to you?

Yeah, so in a previous life I had a side quest of managing the Asian channel partners. So a little bit of experience in this, but nothing like Esther. She's got a lot of knowledge here, but what stood out was when she spoke about companies and when they should go into channel management or when they should actually put a, maybe a sort of a rep in place that's sort of a subsidiary of your company kind of thing and how to make those decisions. And I think that's really important for a lot of people to know when or why to put in place Channel management and also how you actually have to then management and not just let them get on with their life. They don't just bring you business. They're not unicorns.

Yeah. I think the other interesting thing she gets into at the end is sort of like, what are the types of people that you should be looking forward to? Well, one, if you want to get into channel management yourself, but also if you're looking to hire somebody to manage channel partners and build out that team, she kind of gives a layout of a little bit of a blueprint of who you might want to be looking for. So lots of great stuff in this episode. What should we do?

Nick, dive right in.

Yes, sir. Welcome to the podcast. We're excited to have you here.

Hey. Hi, Harry Z. Nice to see you.

Yeah, it's good to have you.

So we gave you a prep ahead of time. Give us a crazy or funny story that's happened in your career.

Yeah, yeah. So yeah, I actually wanted to tell you about a story that is not related to work, but one of the biggest lessons that taught me, you know, about accepting things that I can't change and really concentrating on like things that I can and being solution oriented. So I actually battled with, you know, a little bit of anxiety and also I wanted to control a lot of things, you know, when I was younger. And actually so the story is that I was a prisoner basically, quote, unquote, quote a prisoner at an Airport for 24 hours. So I, I, I planned this backpacking trip to Turkey and I really wanted an adventure and but that's what I got because I got there and my passport was only good for five months, not six. So they didn't let me into the country. Right. Because you get that visa and you know, whatever. Transavia didn't see that I arrived there. There's a police that come and put me in the, in a route. So they close the room. I'm in there with a bunch of, you know, people with paper problems, immigrants, whatever, and they basically come and tell, tell me that I would, they would send me back to Paris, but it's the next, next day because there's no plane before. So I have to spend 24 hours in this room closed in, you know, guarded by police. And so my adventure is, you know, the, the Turkish one, the backpacking is done. And so I have my phone calling my parents back then and you know, try they called the embassy. They, I don't know, they even called like a politician try to get me out of there, you know, nothing, not possible and, and so it was, it was a very fun moment because I realized that in that moment that I could do anything, right? I could shout, I can cry, I can't be angry, whatever. It's not going to change it. So my, you know, privileged backside, we really need to sit that one out. Like, I will have to sleep there on the floor. Like, there's nothing that I can do to control this situation, right? And it was in a moment in my life when I was really desperately trying to get everything in order, like in my personal life, also in, were at work. And it was just such an important moment when I understood that sometimes you just have to say, you know what? Okay, shoot me there. This is not something I can change. I'm. I'm there. I have to wait this out. And at that moment, I don't know, I just. It totally changed me. And then I went back home, like the day after. I was tired, I didn't did anything. And I put down my backpack and the first thing that I did, which is so not me, was sit down, sat down at the computer and I just bought a plane ticket for the next day. The first place, like the cheapest plane ticket because I wanted to go on a vacation. And I was like, I'm not gonna, you know, I'm not gonna cry. I'm not gonna. I'm just gonna go on a weekend. And I had the best ever backpacking trip in Andalusia because Sevilla was the place where I could find a ticket. And I always, you know, think about this moment when in my work, I'm stuck and there are a situation that I really cannot change. And I'm like, you know what? You're not gonna spend energy on this. It's not, it. There's no use crying, shouting, trying to change it. Just sit down, concentrate on the positive, let this one go. So, yeah, I was a prisoner and it cost me a lot. You know, to the good pace.

What I've taken from that is that I've got three kids and a busy life. If I need some downtime, I need to travel to Turkey with a passport. If I've only got a few months, I get 24 hours to myself in a room.

Exactly. Well, you know, I wouldn't recommend that because it's not very comfortable. There's. I was. There was no chairs. Like, I was literally, literally sleeping on the floor, you know, so that was. And I could do with the, with the youth hostels, but that was like another level of, you know, and the room was closed. So we Couldn't get out. So that was. That was bad.

Yeah, that's crazy. It's all. It all worked out. So that's good. A good learning experience from it all. But especially in sales, right?

To. To learn what you control and what you can't control is where you find your success. So there's a good.

Some doors are closed and, you know, whatever you do, they're not going to open. You have to wait it out.

Yeah.

Yeah.

All right, well, let's dig into one of the main topics that we wanted to talk about today, which is sort of the difference between channel distributor sales and direct sales. That got a little bit of background and then both, but not really, not as much on the channel distributor side, I think more from like an enablement side. I've done some stuff there, but would love to kind of get. Hear your thoughts just around it in general. Maybe we start with give people a high level. How do you define channel distributor type sales functions?

Yeah. Okay. So a lot of people actually don't really know when I tell them, but channel management means that that's something that I have been doing at Bionano for the last, well, almost five years in my last job. And so the best way I can describe that is imagine that you have to manage a sales team, right, with sales executives who are so managing other products that do not enter into basically your objectives. Right, who rarely tell you what they do or how they do it. They don't update your CRM, so they don't send you reports. Right. Each of them are paid and also report to a different boss and not you or not just you. And you can almost never have them in the same room. So they are all working differently and separately. So this is basically what channel sales is with all the challenges. So what. When you're managing indirect countries, you are basically responsible for training and recruiting the right people and the right partners. You need to build different strategies with them. You need to forecast the revenues and report to your management the same way that you would, you know, as a. As a direct salesperson. You have to have the regular meetings with them, you know, really monitor the deal progresses and, you know, the prospection, whatever. You need to evaluate their performance basically regularly. And you need to motivate them and keep them happy, to also keep their company happy, not just the people, right? Because if they. They are selling other products. So if you're not, you know, happy or motivated, they're not going to sell your products. So basically, when you're a channel manager, you have a very Important sales management leadership role of, you know, managing all these people together. I don't know if that.

Yeah, I just think maybe one thing to clarify too would be. So these are essentially other companies that sell many different products for many different companies. Right. So they're typically maybe a distributor of 10 different companies products and they have their own sales team, their own company, their own organization. And then you come in and you basically say, hey, I want to hire you to also distribute our products. Right?

Yes. Okay, that's, that's exactly it. And most of the time, so I worked with capital, capital equipment like. Right. So innovation instruments. In that case, sometimes it's a little bit easier I would say because sometimes they, they dedicate a team or dedicate a person to your product. Which might not be the case if for example, you're selling a lot of different types of consumables because it's a very technical sale. So there needs to be one or two people who are really trained on your technology. But, but yeah, in general it's companies, sometimes it's sales agents, independent agents, but we can talk about that difference. But the agents will not have all the infrastructure to tell your products they're just going to bring in prospects. But in the end you can do the selling directly or make the deals directly between the your company and the customer.

How do you motivate them? Because I've done a, let's say it's almost a hobby. I've done a little bit of channel management, but nothing like you. It was like an additional part of my job. And when it's a technical product, you salespeople are lazy. Right. They want to find the easiest deal and close it quickly and find the money. But when you've got a technical product, that may not be the case. So how do you work on motivating those people when you're not connected directly to them?

So, you know, this will sounds very like obvious but is so important is really building strong relationship and being there and available for them. That is, that is very important. Why? Because you want to make them feel like they are part of your team. So again it's, it's a little bit easier I think when you're selling innovation because when you're very much, you know, excited about selling what you sell, you can embark them on the same journey. And I worked with a lot of general partners who were really excited with that, with that idea of, you know, really making that innovation happen and changing, you know, pushing life science. This is why it's important that you find A partner that's aligned, you know, with, with the dynamic of your own company, with the goals, etc. So that's, the recruiting process is quite important so that you can change a lot already if you have the right partner. But making them really feel like part of your team is really important, you know, being with them on the field as well. Right. So in the very beginning, when they learn, you go there with them, you present with them, you bring your scientific experts with you so they can be there on the field with them. And just creating this relationship is so important. The other thing is really, I think being available to help them succeed. You know, again, it's a little bit like between when you're a salesperson and, and, and you know, you want your customer to succeed in the same way. This is why I prefer to call this like channel partners and not distributors. Because it's true partnership. Right. They're not working for you. You work together. It's a, it's a true partnership. It always has to be a win, win situation, otherwise it doesn't work. And when they feel that, you know, and they trust you, they, they love the product and you make their lives easier. Easier than maybe other companies that they work for, then naturally they gonna sell your products. So there are many other little points there, I think, but these are the most important ones. Does that make sense?

Yeah, I think one of the challenges that we had, and maybe this is the difference between selling reagents and selling like an instrument where you have a larger dollar value tied to it. So when we were selling reagents, it was really challenging to get distributors to sell them because we're talking a couple hundred bucks, right? A couple hundred dollars for some reagents. So the volume really isn't there for them to get value from it. Right. So it's almost, you have to kind of think about who are the right types of distributors for our types of product or even our, excuse me, channel partners. Right, our channel partners. The right approach to even take with our product, service, whatever it is, right?

Yeah, yeah, definitely. I mean, again, you know, we, I sold consumables, but it was usually consumables, like, linked to a specific technology. So I don't know really how it would work, you know, with. When you're selling a lot of consumables and high, high volumes. I don't know. But the same stands, I think if you work with people who really, how can I say, you make their lives easier, they. They will want to work with you because if they see the Value on the long term. And I think if you have really trouble building that out, then it's probably not the right part. You know, it's, it's, it's possible to change partners. It's not always easy because it depends on what was put in the, in the agreement. Right. There's many, many things. It's something. It's not. The fun part of general management is that you're responsible of, you know, setting up these agreements and it's not, it's not that fun. I mean if you love legal work it is, but otherwise it's a little bit complex. And same with the transfer price, right. Some you say, well there might not be a value for them. Well, if the transfer price pricing so their, their price list is set up badly, then there's a lot of risks. They don't make money out of it. You know, if they don't have enough margin, again they cannot, you know, really make a business. And if the transfer price is, is too high, for example, they're going to price it too high. And one of those territories may not work out because it's just too expensive compared to other regions. So that's, that's something that is, that is adding a complexity. And it's different from direct sales as well because it's not like every time you're going to make a coat you can. But there is usually a pricing that is already defined in advance regarding the.

The contracts and way they're set up. So we had this kind of a similar kind of conversation with recruiters and I was, it kind of aligned a little bit. So when you're setting up those contracts, you could go with one channel partner in that territory and give them exclusivity or you could have the ability for non exclusive and your team to work there as well. What kind of relationships do you think work best in that setup?

Well, I didn't really like working with several distributors on the same territory. I think, I think it, it makes just life more difficult for them. I think it again it depends on the product. If you want to sell huge amount of consumables, that's something. If you want to sell a capital equipment equipment or for example a technology that is new to the market, to the market where you're going, it doesn't make sense engaging several distributors. It just. And usually they, they don't really, the good ones, they don't want to work with you if you don't give them exclusivity or a sense of exclusivity. Because sometimes companies they don't like to give out the exclusivity. But in the end, if you don't give it to another channel partner, but you only concentrate on one, it will be exclusive. But if they don't perform right, there's. The thing is not working, then you can easily, easily change. That's, that's okay. But it doesn't make sense because it's like, you know, shooting yourself in the, in the feet, like we say in French, doesn't make sense. It's just going to slow down the whole thing because they're going to compete with each other. So I think as a first step it's best to go with one channel partner. I would even prefer sometimes in certain territories go with just a, a sales agent. So some one or two sales agent who knows the territory, who has all the contact that you need, and who knows the rules, regulations, etc. And you know, you can move from there to central channel sales later.

Can you define the difference for us, like for some of the people here listening, like, what's the difference between a sales agent versus your channel partner?

Yes. So a sales agent is going to be basically like a consultant, right? You have, you have this independent salespeople who, who can like work for a company on a, on a, on a mission contract or something. So it's basically they are consultants. They usually don't have, it's quite rare, but they don't have the infrastructure to sell your products. So again, you are going, they're going to help you find the right prospects, they are going to introduce you to the right people, they will help you to build up opportunities. But when it comes to closing a deal, you are going to make that deal directly with the end user, right? And that has a certain limitation. It works very good in the beginning when you want to develop a market. Why? Because you don't have an intermediary between you and the customer. And that is very important. You have that visibility to, to the, on the customers. You know, if you want to build awareness, you know, building the user groups, etc. You have all that visibility, but you don't have the infrastructure that's going to help you in places. Right. Sometimes you have these big tenders if you want to apply to certain tenders. You cannot do that if you don't have an entity in that, you know, in that region or country. And sometimes it's so complicated if you couldn't do it, like, you know, it's in Spanish, it's in whatever I work with Eastern Europe, it's in Hungarian. I'm Hungarian, but I couldn't do, you know, a tender in Hungarian. So you need a local, someone who can do that. And that's when you usually move to a sale channel partner because a channel partner has all that infrastructure. They can do the tenders for you, they can buy the instruments, the consumables, they can, you know, move the whole thing through them instead of, you know, do you doing the selling directly. But again then you kind of lose the Visib a little bit of visibility on your customers and on, you know, what's happening on the field.

Which I guess that, that leads to another point which is how do you decide which territories to go into?

Right?

Because I imagine there may be some territories that are better for a sales agent first or better to try and sell direct to versus distributor like or, excuse me, a channel partner. How do you make those decisions?

It's, it's not a, it's not an easy question in the sense that really, really every country is different. But I think it comes back to simple things like we just talk about the tenders, like what is the complexity of selling in that country? You know, for example, in France or even Germany or England, I'm not sure because I never covered England, but I. Benelux, you know, these countries you can actually as, for example, as a American company, you can easily sell to the universities, to hospitals. I mean, you don't need a specific structure to, to do that. They speak English, right? Language barrier. Sometimes it's, you know, it's, it's a very. You. We would think that in life sciences or even like hospitals, this is not a problem, but it can be. Right. So there's the cultural thing as well. I think just in general, the complexity of selling in, in a, in a region is it has to come into, you know, come into the, the factors when, when, when you decide. So and I think in general also the logistics. So if the logistics, for whatever reason, sometimes for example a hospital, they, they cannot buy from outside in, in for example, I think it's in the Baltics region. Um, I don't know. I don't remember if it's Latvia or Lithuania, but they can even buy from a country that is not, you know, sorry, they cannot even buy from a company that is not based in the same country, even if it's a little bit small country. So you have, so you actually have to have someone with an entity in there. So it's better to have a salesperson. But if you have too many tenders, like in the Nordics we never had finally directed person. Even if everyone speaks English. Right. They can actually buy from outside. But the tenders are so complex. 160 pages of tenders in Swedish. I don't think, I don't think that even if we had like a direct person that could like take care of that all by themselves. So yeah, it's, it's a very fastidious work to sit down when you're going to a region to really consider all these points and see, okay, what's, what's better and should we go with the, with the sales agent?

Okay.

In the end.

So following on from that, that kind of moves nicely into. So okay, you've decided that you're going to go with a channel partner over a direct.

Yeah.

One thing I came up against as well before is like you're going somewhere new so you're going to be experiencing new channel partners. How do you pick one that's right for you and your technology or the, the technical level of your equipment or product? How do you pick the right partner?

Yeah, well, it's a lot, I think. I, I did want some research when I tried to find. Right. Because you need to find someone who, for example, if you're selling equipment is if you work with someone who never was never sold. Right. Complex instrument. That's not a good idea. So looking at their product portfolio, what they have been selling is, is one important things. Also you don't want to work with someone who's working with your competitors. Sometimes if it's not like a hundred percent overlay, you can because they actually have access to, you know, your potential customer base, which is like kind of the second point. So you have to see what are, what are the targets, the target customers that they work with. Because it happened to me once that I, we finally. We decided to work with a company who didn't have a lot of like big capital equipment experience or complex technology experience. But they exactly had our targets. So they had all the good contacts already kind of built out. And that's, that's like a second point that it's really important to consider. And I guess, you know, just talking to, I mean it's, you know, it's so stupid. But it come back to, comes back to really talking to these people and understanding their values. And you can very quickly see, you know, how sharp they are when it comes to, you know, technical expertise. So usually and I ask them to bring in an application scientist or support person, you know, we can invite someone from support. And, and I never, I, I Never evaluated these things alone. I mean it has to be because in the end you will work. You want them to be in your team. But it also means that your team is going to work with them. Right. And it's a very complex environment where they need to fit in not just with you or with the company, but with the teams they're going to work with, including support or you are scientific experts. So they going to evaluate a lot of those things as well for you. So again, many factors to take into account.

And imagine too, like a big part of this is the ongoing training of these teams. Right. I feel like there's one way that people do this where they'll onboard a new distributor, they give them the training, hey, here's the sales deck. Now go, go do it right. And like occasionally they'll go with them out in the field and whatnot. But how do you think of like ongoing training to make sure that they're consistently, you know, getting better using the new information that you're learning from headquarters and how does that make it back out to them? But how does that fit in?

Yeah, so that is very necessary. The problem in many places it is, it is not really built out very well. And it's small companies is definitely the case because they go into channel sales and they don't have the system set up to train the channel partners almost the same way that you would train your salespeople. Right. So what I was battling with and what I was doing is trying to set up these systems, you know, that where they can regularly be trained because if they are not, and this is just the most, you know, evident thing, if they are not, they're not going to be able to sell your product. So it was a little bit always my battle with our marketing teams and you know, the train and support team that we need to train them the same way they have to have the access to the same documentation that then they can adapt to their or month market, but they have to have access to that. So you know, you need to have an onboarding plan. And even if your company doesn't have it, as a channel manager, you need to figure that out. So it's your responsibility to make sure that they are well trained. It's also important, as I said, I think in the beginning, go with them on the field. Like, it's not like, okay, I have them signed and then the whole thing is it's going to work out. It's not, it's not so. So you have to like save the planet. It's Good. You don't have to be there, like every month, but go there in the beginning, twice, three times, be with them, you know, do the rounds with them. And I think that's very important because in the very beginning you can see what their strengths are, what is, what are not working, and then even have the, you know, the training plan adjusted to that. And just in general, like, listening to what they need because they don't need the same thing. Like, one partner is going to be very good with the technical part and the other one, one is going to be a very good salesperson and sometimes both. But in general, just listening to each and every one of them in the very beginning, like how you can best train them and then adjust. But the sad thing is that when you're a channel manager, you sometimes can't rely on the company's onboarding plans for salespeople. You have to really make that happen yourself. I actually made some sales training for them. It's not just that you give them a sales pitch deck, as you say, but you have to train them to be able to sell that right, use that. And, and you also need to help them understand the targets and the USP and, you know, all those things like what, what are the. When you have a discussion, the customers, how you handle objections, same thing as you would do with the direct.

Well, imagine it's even harder though, because they have to keep 10, 15, 20 products in their head, whereas your reps on your team have to remember one. So it's almost like training is more important. You have to be top of mind at all times because they're going to have a lot less conversations to actually practice in the field because you're just one of the things that they're selling. It kind of, to me, feels like it has to come back to the leadership team where they have to say, channel is going to be a major part of our business, so we are going to invest in it versus, like, oh, let's just kind of like do this thing because we might get some revenue from it, which, like, I feel like I've seen it happen like that in the past. And when you don't put the resources behind it, it's gonna be tough, right?

Yeah, yeah, yeah, it's. Yeah, it's true. It's. It's when, when you don't have the channel strategy figured out right, it's a, it's a big problem. So in the end, the channel manager is gonna just try to save, you know, and put outside everywhere. It's a very Good experience. But most of the cases, like, sometimes not most of the cases, but sometimes companies are just doing channel sales because it's easier. They cannot like, recruit, you know, enough direct salespersons. Like, okay, this, we want to go here and we want to go there and we're just going to, you know, do it by channel sales. But there's none.

Well, they're just like, I want to bring somebody in to figure this out. Like, hey, I'm going to bring you in, you figure this out. But I'm not going to give you any real resources to do it. Yeah, but like, yeah, go do it. Thanks.

We're paying them what we're paying them to do, right? Yeah, we're paying them.

But, you know, the good news is that when you are doing channel sales, learning it, you know, on the go. Well, actually, you know, you're learning very good because you really have to figure it out for yourself. There's no, like, something. It was the case for me at least, you know, I was learning a bunch of stuff also from other channel managers. I, I also was lucky because our director was actually a channel manager before. So our sales director. So actually he could, you know, gave me a lot of tips, which was really useful. But that said we really had to build out a lot of things and a system, you know, because if you make their lives easier, I think it's really, it's, it's. I think this first thing make their lives easier, make their sales easier, figure out the way how to do that. And it's half of the success almost, you know, in, in my opinion, because then they going to really go selling.

Your product and it's just human nature. Right. If they feel like you're investing in them, you're supporting them, who are they going to drive harder for? The, the company that's not giving them the tools, resources they need to hit their target. Because they're just sales guys trying to hit their target too, as well. These channel partners. Yeah, if you invest in them and give them the tools, they're going to. They're going to go out and use them.

Yeah, exactly.

I was going to say, well, unfortunately we're coming up on time here, so we're almost at the end, but wanted to give you one last question. Yeah, I'm sure there's some people out there who are kind of thinking about going through, you know, becoming a channel manager, kind of thinking about that from like a career progression, career choice. What kind of advice would you give to them or what would you recommend or things to consider.

You know, I think mostly just think about the type of person you are. If you know it will help you to know if this is a type of job that you would like. For example, if you would like to have a good leadership experience, this is fantastic because managing people who are not reporting to you is one of the best leadership experience that you can get. Because there's no way for you to use your positional power, you know, like, oh, I'm your manager, give me the report. No, it's. You have to motivate these people in a total different way. You have to ask them to give. Use stuff and information in a totally different way. So if you're that kind of person who wants to have that experience and have, you know, this type of leadership role, that's a great way. If you're someone who loves to go to places that you don't know and you know, you don't know anything about.

In a jail in Turkey.

Yeah, but a little bit. But if, if you love to go to challenge, like, you know, this is a challenge to go to a new market and figure everything, how you sell your products there. And you have a good, also a good, I would say talent to adapt to different cultures to. Because there's a business culture in every country is different. So when I worked with southern Europe and then I work with northern Europe and it's just two different things. I mean Nordics, they're not going to tell you anything. You really have to build a relationship. And the stuff Hanish, they gonna be like very happy one moment and very sad in the other. And then, and then sometimes they like tell you all the information. And the other day like, no, I'm not going to talk to you. So it really, you know, it's a really different. So if you love going to different cultures and adapting to different, you know, business businesses and, and creating relationships, I think that's amazing. If you don't like routine, go channel managing. Managing. Because there's not two days there are the same honesty and it's very creative. It's. I really love it. It's. It's not for everyone. If you prefer to like really know your country and be the type of salesperson who's like, you know, I know everyone here. I'm. I know like, I'm gonna build this out on the long term. Don't do channel management because then, then it's a totally different job.

That's great. I think all of those were like very good bullet points for, for people to consider as they're you know, deciding if they want to go down the channel route or even potentially, you know, I think for companies and earlier stage companies that are thinking about when do we bring in the channel, like, who would be the types of people we might want to hire? I think you also kind of just laid out a hiring profile for them, too, so. That's awesome.

Yeah. I hope I could help a little bit.

Yeah. Well, awesome. Thank you so much for coming on the show. Really appreciate it. And it's great having you here. We'll talk soon.

Thank you, both of you. Was lovely. Bye. Yes.