article | May 11, 2011
CSO Interview: Using Channel Sales to go from $0 to $1 Billion
Q: Can you tell us a little bit about what brought you to Data Domain?
A: I had been looking for the right opportunity to run sales for a startup. Frank Slootman, the CEO, and I knew each other from my prior company. We started talking and he had some specific things he needed to accomplish:
The company had great technology; the addressable market was huge and ripe for their solutions. They had come up with an effective way to use disk storage to replace tape backup. All of this was too good to pass up. When I joined, we had 2 sales people, 2 sales engineers, no pipeline and no channel program
Q: How did you leverage channels in the early years?
A: We were the new kid on the block. Data Domain needed channel partners that had established a trusted advisor status with our target market. Leads were also critical. In 2004, lead generation was still being done the old fashioned way. We relied on the channel partners to advise us of potential opportunities and we would work the deals with them to closure. Our selection criteria included:
Q: How did your channel strategy evolve as you grew?
A: Initially, we understood that channels do not just drop everything they are doing to deliver outstanding results for you. Once we reached 5% of their business, we were strategic. So, we monitored our position on the line card and revenue contribution to the partner. As we grew in importance, we asked for greater commitments.
We were always channel-centric which helped set the right perception. The best channel sales organizations steer clear of companies that view channels as an afterthought. We never segmented markets except in Europe where we provided some level of exclusivity in exchange for commitments to train on our products
Q: Did the lack of segmentation create any channel conflict among partners?
A: No, we had a tight registration process. If we accepted a registration the partner needed to bring us in for a meeting within 2 weeks or the deal would be automatically unregistered. This kept partners from registering the phone book.
Q: What was your most significant challenge with the channel?
A: Trust. It is earned over a long period of time and lost quickly. At times we would overstep; other times we got lied to. You need mature channel sales managers and sales reps to avoid blowing up the relationship over one incident
Q: What advice would you offer to someone who expects to ramp channel sales as quickly as you did?
A: Define a clear program on how partners can make money and differentiate themselves with your solution. Remember a VAR is a Value Added Reseller — I often told partner prospects that we would allow them to show Value add. Value equates to better margins and more business for a VAR. Be ethical – don’t ever say one thing and do another.
Insights from the interview:
Dave spent a couple more years at EMC after the acquisition and oversaw the integration of his sales team into a new business unit. He recently moved on and is now an executive-in-residence at Greylock Partners and NEA helping other start-ups get off on the right foot with their sales efforts. You can read more about his experience at Data Domain on his blog at http://theride-zerotoabillioninhightech.blogspot.com
CALL TO ACTION – Schedule 30 minutes with your VP of Channels to discuss the insights listed above and confirm if you are doing all of these things.
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