Working with a Channel and Tools to Help Stay Top Of Mind with Your Partners

Hi everyone, this is Steve Snap and I'd like to thank you for joining us for this episode. I have Kevin Brown, our CEO with me and I wanted to just ask him a few questions about channels and just to share some of his experience with not only the manufacturing side, but also the rep or the agency side when using third party channels. So Kevin, would you just take maybe 30 seconds and just give a quick overview of your background and then after that if you could just describe what a channel is and then we'll just talk about what that concept is and how that applies to people.

That's great, Steve. Happy to do that. So I've spent the last 25 plus years of my career working in the distribution world. So I've been working with manufacturers. I started my career actually as a distributor person, a distributor rep, and, and worked for a large international distributor of industrial safety products. A number of years later I became a manufacturer's rep. So I became an independent agent representing a number of companies and selling to their distributors on their behalf. So we handled, as a manufacturer's rep, we handled the sales, marketing, and I'll say business development and local support for as many as 15 different companies at a time. Following that, I exited that business in 2003, 2002 actually. And then 2003 is when you and I met, is when I became a manufacturer. I got into the manufacturing business, invested in a manufacturing company. And so I've really covered all scopes or all areas of a spectrum of distribution from a distributor, an independent agent and a manufacturer.

Okay. And from in your opinion or in your experience, what type of markets and what type of companies use channels.

Yeah, so let's talk just briefly about channels because you know, the word channel isn't used in every different vertical arena. So you know, when we start thinking about technology. Right. So technology companies, SaaS, software companies, traditional companies, software companies, VoIP, phone systems, server companies, they all use the term channel regularly because they work through a network of resellers and dealers and so forth. When you get into other arenas, perhaps as an example in the industrial world, we typically call it our distribution network as opposed to channel. But really when we talk about a channel, a channel is the method that we use, typically with an external partner to get to market with our products. How do we get to the end user? Do we use a broker, an agent, a reseller, a var, a negotiat, an agent to get to our distributors or our dealers and that then sell to the end user customer? So really that's what the channel Is the channel is about how do we use external partners that bring some variable costs to things to us to get to our end user customer.

Got it. And so obviously there's pros and cons to any strategy that we implement. Let's start with maybe some of the benefits that you've seen for manufacturers that use third party channels or that use reps in this case.

Yep. So we can talk about it from two sides, both from the, from I'll call it the broker, agent, rep side of things. And then we'll talk about the distributor dealer relationship. And it really comes down to a couple of things. One is local expertise. So if I'm a manufacturing company in Italy, but I want to sell into a Ford Motor plant in Detroit, it's going to be very difficult for me to have the one exposure to know who the right person to talk to is and, and have any credibility there. But that local industrial distributor is an example in Detroit or the local value added software reseller in Detroit. He knows how to get into that auto plant because he has local relationships and they've worked together before. So really what happens is you're piggybacking on top of existing relationships. And the same thing happens when we start talking about distribution. Right. If we're talking about, you know, maybe, you know, just lack of a better example, a hammer. Right. You need to get that local distribution network, whether it's a distributor or a dealer interested enough in your product that they'll take on and represent your product. So you can use a manufacturer's representative in this case to get into that network because they have that local relationship with the distribution network. So whether it's a hard good or a technology product is having that local, local knowledge to get into that end user customer because you, it's a little more difficult for you to do that directly. It's getting easier every day now with the technology tools we have with email and social media and so forth. But that's the mindset behind it. The second piece that's critical with that is there when you start talking about using a broker or an agent or a manufacturer's rep is now you have a variable cost of sales. Right. If you. I could hire an entire. From that Italian manufacturer I referenced, referenced, I could hire my own team of people throughout the United States. And I've got all the fixed costs that goes with that. I have salary, I have travel, I have insurance. All the loading that goes with that, I lose that when I use that agent.

So with that sort of variable cost, I'm imagining there's probably some downsides to that. What would you say the struggles are? And obviously I think people watching this probably would. Are familiar with what channels might be. But I'd like to talk a little bit more in detail about some of the challenges that come when you're working with someone that isn't necessarily an employee.

So there's pluses and minuses to everything. Just like everywhere we look in life, right? The challenge that comes in that while it's great that you do have the variable costs, you have the local knowledge that you get the challenge with it. Whether we're talking about a broker, an agent or a reseller, distributor, dealer is they're busy with other things too. So, you know, you and I wake up every morning and the first thing we're thinking about is lead smart. They wake up in the morning and think about what they have to do to take care of their customer. They're never product specific on a day typically. So if you're a broker or a manufacturer's rep or an agent, you start your day thinking about what do I need to accomplish for maybe 10, 12, 20 or 30 different companies that you represent. Right. If you're a distributor, you're starting off your day thinking about what do you need to do? Because you represent literally hundreds, if not thousands of manufacturers of different products. Right. Okay.

Now, given that, why do companies struggle with their manufacturing reps, like when they struggle with communication? You sort of touched on already that the manufacturing rep or the distributor has got a lot of irons in the fire, so to speak. So what is the issue and how do we solve that issue related to communication?

Yeah. So again, perfect question to feed into this is that everything is about staying top of mind. We all want to stay top of mind of our consumer. Right. Of the company or people that are using our product. And the same issue happens as we're talking about a dealer, a reseller, a distributor and. Or that middle place there for an agent or a manufacturer's rep or a broker, right. It's how do we stay top of mind with those people so that they are thinking about us constantly? And that becomes the biggest challenge because they have so many other companies that they're involved with is how do you find the way to keep you and your products and your leads or end users top of mind with your. With your channel partners.

So I know you talked a little bit at the beginning about when you were a rep and you had your own rep agency. What kinds of things did manufacturers do that enabled them to Stay top of mind for you.

Sure. So it's interesting, I've told this story many times. We represented a large manufacturing company. It's literally a household name. We represented a division of Baoshan Lomb and so we sold eye protection related products and we managed the entire western United States for them. Wonderful relationship. But they weren't one of the bigger product lines that our rep agency handled from a revenue standpoint they were, they were down the, down the run on the ladder. They worked. And this would have been in the late 1990s, early 2000s. So we didn't have the social media tools, we didn't have the email campaigns we could do in the same way those were the days where people were still doing broadcast faxes from a phone line. Right. Plug the phone in at night when you leave the office and you hope they all went through the next morning when you, when you get up. And we did that in our company and literally I did that from my home while we had another fax line going from the offices. But I'll use the spouse alarm relationship as an example. Great people, great products. It wasn't a high selling product in our marketplace but they stayed in such close touch with their internal sales support team and so closely involved and engaged with us by phone and then soon what happened is by email to let us know what they were doing to support us in the marketplace. We couldn't help but support them because they stayed actively involved with us and the end user consumer. So we knew what was going on with them. So while it wasn't necessarily the largest revenue producing product for us, they had done a phenomenal job of staying engaged much more than our companies that we represented. That might have been 3, 5, 7 times the revenue production for us we're doing.

So that reminds me of another video on our channel. You did an interview recently with Alex Burrell from Cleanspace and she talked about what the idea that Lead Smart really enables her to. How did she say it? It enables her or her company rather to really stay focused on the end user and not just focus their internal team but for everyone across their channel to stay focused on that. And it just sounds very similar to what you described with Baosha and Long. Can you just touch on a little bit more detail of what she was really describing in that interview and we'll link to that video so other people can see what we're talking about, but maybe just touch on what she was describing.

So that was a great interview with Alex. As you mentioned, Alex is with Cleanspace. She was One of our early adopters, really our first adopter of Lead Smart power user, as I describe it, she has 20 plus people around the world growing very quickly using our product and literally thousands of distributors and manufacturers, reps or agents around the world that she's dealing with and using Lead Smart to manage. So, you know, I use the phrase in my conversations regularly and we use it in a lot of our marketing literature about visibility and accountability and what people are missing in the equation out there right now with the concept of one, turning leads into revenue, but two, staying top of mind is they don't have visibility into what's going on in their business. They have accounting reports, they might have a CRM that they can say, oh, I had a lead here and somebody said, oh, this is, you know, 70% likely to close. But none of that is relevant real data about what's going on in the marketplace with their products. And, and what Alex was talking about is how she uses LeadSmart to really get deep insights into two specific things. One is what is her channel partners doing? What are her manufacturers reps that she has in North America and some of the agents she uses in Europe, what are they doing to engage with both her distributor partners and the end user leads? She has full visibility and accountability because she has details that I'll describe in a moment from the that. But then secondly, it gives her full insight into what the lead is continuing to do. So through the marketing automation components with leads within LeadSmart, we're able to look in and get deep insights into the activity of a lead. So you may have somebody that comes by a trade show and scans their car, gets their card scanned, or enters an online event because they want to win a trip to Hawaii or there's a pretty girl in your booth or whatever it might be, but they're not really interested in and are engaged in doing business with you. Well, we'll know that because that person doesn't stay engaged. But when you have somebody that has true interest in doing business with you and your product offering, they're continuing to fill out a form on Facebook because they saw an ad or they're engaging on LinkedIn or they're watching a video on your website or signing up for a webinar. And that's what Lead Smart tracks for Alex. So she knows what both how the lead is engaged with her company and how her channel partners are. And there's never any question to who is doing what because she has insight too. When was the last time the lead was contacted? What were the Results of that, who's responsible for it. And she gets that in daily updates.

So I'm going to overlay on top of the video a screenshot of kind of that email that gets sent to the manufacturing rep on a weekly basis. But could you just describe real quick when we were designing this and working with Clean Space to solve this problem, can you just sort of reveal some of the secret sauce that went into our strategy for using a weekly email and what you were thinking about not only as a manufacturer but also as a rep? Like, what problems in your mind were.

We solving with that? That's good. I think it goes back to that top of mind issue, right. If you're a manufacturer's rep or a distributor, you've got a lot going on, right? These days, all of us, you could have one job for one company that you work 8 to 5, you're still overwhelmed with information and data. So if you take that out a level to a broker, an agent, a reseller, dealer, distributor, that exponentially grows in the amount of noise you have going on around you. So the concept for somebody to be able to say, I'm going to remember, or even go check a spreadsheet that was sent to me with a list of leads, it's just difficult for people to do that specifically as we now, as we get so much more technology that's bombarding us day in and day out. So with the scenario that we have within Lead Smart, where we're able to send this weekly ongoing email update and you know, companies that are using Lead Smart could have that email sent out to their channel partners twice a day. They could have it sent once a month. They set and decide how they want to use it. But we recommend out of the box that you do it once a week. We've chosen and Clean spaces we're referencing back to Alex there. They send it out on Sunday evenings. So they have channel partners, their reps and distributors that might be planning their week out Sunday nights or first thing Monday morning. There's their list of leads that they can say, I'm Joe Smith, you know, I cover this part of Italy and I've got these leads that are at this status and this is the amount of engagement that that lead has. And I know from our color coding sequence of red, green and yellow lights that how long it's been since I've contacted them last. So we do this as a mechanism to help people stay top of mind with the client that's using Lead Smart in this spot, it would be clean space all of their manufacturers, reps, all of their distributors who have been assigned to a lead get this information every week. And they have the same view into what's going on as Alex and her international team have.

So I'll show some examples, Kevin, of how the Clean Space employee can see what's happening and how the external channel partner can see what's happening. So we can assume that people will see that. Can you talk a little bit about the aging status or the stoplight concept that we built in there and what we baked into that and what red means and what green means specifically. Specifically for CleanSpace. And obviously you mentioned that we can define what that means, maybe talk about some of our other clients who use it differently. But from your perspective, from the point of view of keeping something top of mind, can you just talk to the psychology of what that stoplight means and what it communicates to both the manufacturer and the rep?

Sure. So we all like challenges and, and now we're surrounded by technology that allows some gamification of some sort, as it's called. And that's really what this has come down to. But as you mentioned, we use what we call kind of a stoplight system of red, yellow and green lights. Lead Smart out of the box. If someone just uses a standard system with Lead Smart, they're going to know that their leads that have been contacted from 0 up to 20 days as a green light. They're going to know that from 21 to 45 days as a yellow light and 45 days plus is a red light. So the last thing that you would want to see on that email report that you were talking about a few minutes ago, if you're a channel partner of a company using Lead Smart, is that you have a red light, which means that lead hasn't been contacted in 45 days or nothing's been updated. And it doesn't matter whether it's the channel partner updating or internally the company updating. So the Lead Smart user authenticated users could be updating and, and changing that, that scoring as well. But then you would see that red light and then if you saw a flame next to it, and that flame designates that the lead is actually engaged with us, ongoing and continuing to interact with us. So the worst thing you could see would be a red light, a flame that says that the end users engaged and have a large dollar volume assigned at this particular deal because nobody's following up the client isn't. The client's still engaging with you or potential client in the lead, but your team is not. So ideally, we like to see is consistently green lights that we can open that particular deal up or that particular contact up. We can look at all of the notes that have been entered. And what we do is we use processes as opposed to the traditional opportunities that people would say. And I say, okay, I call this an opportunity number seven, it's 80% likely to close. We actually do something different by using what we look at as processes and stages and statuses. So we can look at what flow of status that sales cycle is in. It's been a demo has been done or final review and purchasing, and that's all customized for each user of the product. But what we're able to do in that setting is we're completely quantifying the value of the opportunity, what its engagement is, how it's been contacted, and what status is it's at. So if you're a sales leader, in Alex's case, what she does is she looks at a series of KPIs on her dashboard. You could go into an open lead report very quickly and easily as a sales leader, look at it by geography. And how I like to do it is I like to sort it by the revenue opportunity. I sort the report by revenue opportunity. I go to my left side and I look, am I seeing green lights and flames is what I want to see by those big deals? And if I don't and I see red lights and flames and a big deal, I know who I'm calling or emailing immediately.

Okay. And I know we're almost out of time. I just want to close with one thing. At that same show where you interviewed Alex, you also had an opportunity to participate, I believe, in their global sales meeting. And I just wanted to ask you, you had said that you spoke to some of the manufacturing reps and the partners, and I was curious what they shared with you about what a red, what kind of behavior, what kind of reaction did they have when they saw, like you said, a flame and a red? How do they react to that? And not just what we think over here when we're designing software, but those guys are actually the sharp end of the spear that are out there doing this every day. What kind of, I guess I would say behavior or difference did that make for them, good or bad?

Well, I'm glad you asked that because really, what we find from them, in fact, participating in that meeting, I was kind of anticipating we'd get a mixed reaction. These folks have been using the product now for almost two years and had been with us when we were beta testing the product. But this particular group was really enthused about continuing to get the emails. It, as we've described earlier, as I was mentioning, the critical importance of this is to stay top of mind. And they clarify that it does that form, it gives them the data that they need. And then because we're able to do assignments within Leadsmart, they actually have, in this setting, the manufacturer's reps have the ability to assign the distributor that has it as well, so they can run reports and get data themselves right out of their portal that can, when they sit down with a distributor, they can talk about those end users. So we've been really encouraged with what the channel partners, as we would describe them, feel about Lead Smart because it helps them. Because nobody, I mentioned this very earlier in our discussion today about nobody does this maliciously by letting a lead fall into a black hole, right? Everybody is in this business to sell more stuff and make more money. That's just why they go to work, right? So it just happens that people can't keep up. And so when you give them the tools and the opportunity to get reminded on an ongoing and consistent basis how to stay on top of things, which is what Leadsmart does and what it was, what the three of us designed it to do, that it gives them the help that they need. So we had great encouragement from the team that we worked with.

That's great. Well, everyone, I'd just like to thank you for sitting through this quick conversation that Kevin and I had. As I said, I'll include any links to any other videos in the description and we appreciate you spending some time with us. Thank you. Thanks, Kevin.

Thanks a lot, Sam.