Will an Indirect Consultant Cost My Business More?

Getting more while paying less

Recently, a prospective customer asked me, “Will an indirect consultant cost my business more than negotiating with the service provider directly?” It’s a fair question, one I can answer with minimal effort. Working on a cloud or telecommunications solution with a supplier agnostic advisor (indirect) doesn’t cost anything additional and often will reduce the total cost of a project.

The indirect model

Most cloud and telecommunications providers today will utilize both the direct and indirect sales consultant models. A direct sales consultant is an employee of the supplier who is given a sales quota and a limited variety of solutions to propose. An indirect sales consultant will represent a variety of suppliers and solutions. The consultant will also typically focus on a select group of suppliers and narrow the prospective vendors down for their client based on their specific needs. The indirect and supplier relationships have no quota or demands that create a false urgency or bias to the buyer. The primary goal for the indirect consultant is to save their client time and utilize their expertise to find the best supplier and solution for their customer. Since all suppliers currently embrace the indirect model the list of suppliers is unlimited. The consultant will focus on a few but is prepared to engage any supplier needed for a unique situation. The past decade has shown a clear trend for suppliers to move to the indirect model and many have engaged the indirect channel exclusively.

Why pay more?!

In What is the Difference between a Direct and Indirect Channel, I covered some of the advantages of the indirect partnership and why it enables long term sustainability. Many times, the indirect consultant will save the end-user the cost of a technology solution. Certainly, as some may surmise, suppliers that utilize the indirect model don’t add cost to the solution because it involves an indirect consultant. All suppliers budget for the cost of sales in their pricing, regardless of the channel it comes from. They understand that the opportunities from the indirect channel are unique from their direct sales funnel and don’t incur any additional cost to sales.

Due to their vast knowledge and experience, the indirect representative is very familiar with the sales process of cloud computing and telecommunications and know where the supplier may have flexibility. It may be in the term contract, the installation charges or the monthly recurring charges (MRC) for the service. The indirect consultant becomes a trusted guide through the discovery, sales, and implementation process. This has its greatest value in a cloud or data center acquisition. The discovery and decision process for this type of service may be completed once or twice in an IT leader’s tenure and many years can pass between engagements. As a result, they are unable to remain apprised of the current technology, sales trends, and processes. Conversely, the indirect consultant may lead his or her other clients through a similar process several times a month. They know how to get the best value and are rewarded by it. Cost is not the best reason to use indirect consultant, but it is never the downside of the indirect consulting process.

Today’s suppliers of telecom and cloud services have come to embrace the indirect sales channel because of its propensity to create a “win-win” for all parties involved. It provides a more customized and less expensive solution to the potential customer while introducing new opportunities and reducing the cost of sales for the supplier.