Channel Partners

Driving Revenue through Channel Partners

If you decide to go with either a pure- or a hybrid-channel sales model, make sure you create the best foundation for success. You don’t have to do everything yourself. Channel recruitment and management are highly specialized, and there are companies that can handle parts of this process, including channel program setup, reseller recruitment, vertical strategies, territory models, incentive and loyalty programs, lead generation, training, and support. If you decide to find your own channel partners, here are some good sources:

Your competitors – This is an excellent source because the channel partners who currently do business with your competitors are already familiar with the industry and the types of products and services that you offer. Target your competitors’ resellers with pricing, margin, marketing, and training incentives. You will need to make your offer enticing enough to overcome the history that your potential partners have with your competition. Also remember that some of these companies will have loyalty to your competitors, so you will be exposing your business methods.

Industry conferences and events – Willie Sutton said that he robbed banks because “that’s where the money is.” Likewise, you should go to industry events because that is where you can find potential partners. Many will not be looking for a product or service line to handle, but a few will. You need to nurture these relationships over time, so be patient and make sure you keep prospective partners in your email and social media communications loops.

The internet – Most, if not all, of your potential channel partners will check you out on your website so make sure your partner pages display a clear vision of the benefits of doing business with your firm, as well as the process that a new partner will need to follow in order to do business with you.

Referrals from existing partners – Partners will be happy to refer other companies to you as long as they are non-competitive in their specific market area.

Perhaps the best source of new channel partners is the character and integrity that you practice as a partner-friendly organization. Partners know the good companies to do business with, and you always want to be perceived as one of the good companies to work with. Here are five ideas on how to co-market with your partners:

  1. Have a published, co-op marketing program.
  2. Make your channel partners put skin in the game.
  3. Don’t waste leads on partners that won’t work them aggressively.
  4. Always maintain control of the leads you give to partners.
  5. Manage leads as part of each partner’s business plan.

If you choose to offer co-marketing programs, make sure you have the proper metrics in place to measure items such as sales volume, growth rate, product share, history of making quota, lead closure rate, and customer satisfaction.

If your product is not currently channel-friendly, you will need to make it more attractive to your partners and their customers. Start by looking at ways to standardize and reduce the number of model choices. Likewise, simplify products by reducing the number of features, and use every method you can think of to streamline the buying process.

How to Manage Channel Conflict

Companies run away from the potential of channel conflict as if it were the plague. They cite issues such as the fact that channel conflict can kill deals, leads to friction with your direct sales team, causes the channel to leave you for your competitor, and forces you to make ill-informed, business decisions. These are the negative aspects of working with a channel that you will have to take into account.

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However, if managed properly, channel conflict can be a good thing. At first blush, this statement may seem counterintuitive. After all, who wants a bunch of channel partners who are fighting over deals with each other or with your direct sales reps? Nonetheless, a little conflict can be healthy and cause everyone to work harder and give you the security necessary to terminate under-performing partners. In fact, a lack of conflict can mean that your deal flow is weak and that nobody cares (a very bad sign).  Effectively managed conflict can create competition that benefits all parts of your business.

If your partners are not pursuing deals aggressively, they are not making you money. And if you have several partners in a particular geography, and they aren’t bumping in to each other, it indicates that you have anemic coverage in that area. There are ways to manage the conflict, for example, by tightly defining who gets which type of lead (by industry, size, geography, solution type, etc.). But my basic philosophy is that you should err on the side of whoever has the best chance of bringing in the business.

For more ideas on how to work get the best out of your partner relationships, visit Important Lessons for Working with Channel Partners.

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Christopher Ryan

Christopher Ryan has 25 years of marketing, technology, and senior management experience. As both a marketing executive and services provider, Chris has created and executed numerous programs that build market awareness, drive lead generation and increase revenue.
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