Pricing Strategy for Different Channels with Larry Walsh

Larry Walsh is the leading go-to-market advisor to technology executives, channel leaders, and solution providers around the world. Widely known for his ability to cut through problems and challenges facing vendors, distributors, and solution providers, Walsh is sought for his advice, counsel, insights, and consultation on channel strategies and technology market trends. In this episode, Larry shares how to determine channel profitability and the economic equation that goes with it. He talks about how brand presence is one of the determining factors to persuade channels to take the risk of selling your product. He also differentiates how you can make money or compensate channel partners for selling a product directly versus selling a subscription for a product. He also shares what his company, Channelnomics, does.   Why you have to check out today's podcast: Learn how to structure your process in terms of relationships you want to create with your channel partners in order to meet the types of need you have Understand the pricing strategy that goes with having channel partners, so you get them to convince to sell your product instead of the competitors' Find out the sales motion [sales model] you want to operate on so you determine how to set the compensation and who sets the price   "Once you fall out of that zone where there's none of the endemic margin in your pricing to support yourself plus your partners, then stop selling to your partners." - Larry Walsh   Topics Covered: 01:38 - How he transitioned from being the newspaper editor to a channel guy 03:22 - What he thinks of channels 05:17 - A channel being a sales motion 06:08 - Talking about parallel channels and channel strategy 07:20 - Pricing strategy for channel partners 11:15 - What he thinks as a mistake when dealing with channel partners 11:57 - Determining channel profitability and the economic equation associated with it 14:57 - How brand presence affects channel partners' decision to sell a product 15:57 - When can you go shallower on the margin 16:30 - First mover advantage in terms of consideration 17:30 - Selling a SaaS through a channel versus selling a physical product through a channel 21:53 - How to compensate a channel partner for a subscription type of sales 22:56 - How do you make money on a sell-through-sell on a more consumption-based model 24:19 - Differentiating the subscription and consumption-based models 25:03 - Talking about lock-in terms and renewal rates 25:44 - Larry's pricing advice that has a great impact on your business 26:57 - What is Channelnomics and what does it do   Key Takeaways: "What we look at when somebody comes to us looking for a channel strategy, the first thing we want to know is, who's the customer? What does the customer need from you, or what does the customer need to be successful with your product? And that will then define the chain or the channel that it goes through." - Larry Walsh "To me, a channel is a sales motion. And that can include direct relationships; it can include automated relationships. So, it's not the ‘what’ that's doing, it's the ‘how’ it's being done." - Larry Walsh "Often, a mistake that's made when dealing with channel strategies is thinking about this as what do I have to pay versus what do I have to do to enable? Or what do I have to do to engage with a partner to be a good go-to-market, have a good go-to-market relationship?" - Larry Walsh "When I think about channels, what I'm thinking about is selling relationships." - Larry Walsh   Resources Mentioned: HP: https://www8.hp.com Cisco: https://www.cisco.com Microsoft: https://en.wikipedia.org/wiki/Microsoft IBM: https://www.ibm.com   Connect with Larry Walsh: LinkedIn: https://www.linkedin.com/in/lmwalsh2112/ Email: [email protected]   Connect with Mark Stiving:  Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/