Third-party sales channels—distributors, dealers, resellers, and partners—remain a critical component of many go-to-market strategies. They extend reach and scale coverage and often serve customer segments that direct sales teams cannot efficiently support.
They are also, for many organizations, a persistent source of margin frustration.
When margins lag in the channel, the default response is predictable: launch new programs, incentives, tools, or promotions designed to “fix” the problem. While these initiatives are often well-intentioned, they address only half the issue.
The other half—and the one that determines ROI—is sales execution. Specifically, whether channel sellers are equipped to sell value rather than default to price.
Put yourself in the position of a distributor or reseller salesperson today. Like your direct sales force, they face:
Intensifying competition
Increasing product and service commoditization
Buyers rewarded for short-term cost reduction rather than long-term value
Growing demands for customization, service levels, and responsiveness
Longer, more complex sales cycles that introduce margin pressure at every step
In many cases, these pressures are more intense in the channel than in direct sales. Channel sellers often operate closer to the “low end” of the market, where customers are more price-focused and less receptive to differentiated value messages.
In this environment, it’s no surprise that channel sales professionals emphasize closing the deal—often at any price—rather than negotiating profitable agreements.
The result is predictable: sales volume may increase, but margins erode. Given the strategic importance of channel sales, this outcome is unacceptable.
When channel performance disappoints, organizations often respond with additional programs—such as rebates, MDF, SPIFFs, certifications, pricing tools, or reporting dashboards.
While these investments may improve activity or alignment, they frequently underestimate a critical success factor: helping channel sellers move from closing deals to crafting value-based agreements.
In many cases, manufacturers have supported their channel’s ability to make the sale, but not their ability to negotiate the right kind of sale.
Not just whether the customer buys, but how the customer buys.
Here’s a simple fact borne out repeatedly in RED BEAR’s work:
When channel sales professionals focus on both the whether and the how of the deal, they close better business at higher margins.
High performers consistently demonstrate a different set of execution behaviors:
They frame the value of their solution in terms that matter to each customer—rather than relying on generic product or brand messaging.
They know how to uncover information that helps them sell, while avoiding unnecessary disclosure that weakens their negotiating position.
They sell in a way that signals, “I won’t devalue my solution by racing to price concessions.”
They understand all available sources of negotiating power—not just price—and use them deliberately to avoid costly concessions.
Rather than giving in quickly to surface requests (price cuts, faster delivery, customization), they probe to uncover what is truly driving the request.
They manage the give-and-take of negotiation carefully, trading value instead of giving it away to close profitable agreements.
These behaviors are not intuitive. They are learned, coached, and reinforced.
On the surface, a value-based, disciplined approach to channel selling sounds obvious. In practice, it’s rare.
Why?
Because many channel sales professionals receive less rigorous training and coaching than their direct-sales counterparts. When training does exist, it often reinforces behaviors that close deals faster—but at the expense of margin.
Common messages include:
“The customer is always right.”
“Be the customer’s advocate.”
“Reduce tension wherever possible.”
While these ideas may create satisfied customers, they often lead to unprofitable agreements. Ironically, tension is frequently the source of creative negotiation breakthroughs, but only when sellers know how to manage it.
One of the most powerful insights from this research is that margins suffer when channel sellers react intuitively.
Consider a few common situations:
When customers push for lower prices, average performers start negotiating price immediately. High performers acknowledge price—but keep the conversation anchored in value.
When customers ask for information, average performers overshare. High performers provide just enough to earn the right to ask better questions.
When customers signal competition, average performers concede quickly. High performers maintain high targets and justify them.
When customers request something extra, average performers try to comply. High performers explore needs and search for creative, low-cost ways to meet them.
Margins improve when sellers think and act counterintuitively.
So what does it take to improve sales channel ROI? Not more programs—but better execution discipline. Sales leaders who succeed focus on five priorities:
Implement a shared sales execution methodology, so channel managers and partners use common language, planning tools, and deal logic.
Invest in your partners’ ability to sell value and negotiate profitable agreements—not just in product knowledge or certifications.
Align incentives, coaching, communication, and tools to support value-based selling behaviors consistently over time.
Channel managers must model the same counterintuitive, value-driven behaviors they expect from partners.
Ensure the value proposition is embedded not only in marketing, but in how both internal and channel sellers think and sell.
Without disciplined execution, channel sellers will continue to take the path of least resistance—winning business by giving things away and cutting prices.
Taking charge of your sales channel ROI does not require more complexity.
It requires better negotiation behavior at the point of sale.
RED BEAR Negotiation helps organizations improve sales performance by building the behaviors required to negotiate value, protect margins, and execute strategy under pressure.
We work with sales leaders, channel organizations, and deal teams to replace intuitive but damaging habits with disciplined, value-driven execution—because profitable selling is rarely intuitive, but always learnable.
Explore How RED BEAR Helps Sales and Channel Teams Protect Margin!