How do you know that you are working with the right channel partner? Recent research shows that at least one third of channel partners are unproductive and damaging to both parties. The cause could be the vendor’s failure to properly support and motivate their channel partners. However it might be that they simply choose the wrong partner, one who cannot, or will not, produce results. So how do you select the right channel partner? Here are my suggestions, a set of criteria to help you select the best partner:
1. Market Focus
Determine your potential partners' specific target markets, whether they are based on geographic considerations or business type. Discover their current selling and networking activity. Is their existing customer base demanding better, more advanced solutions? Does their existing customer base suit your business in terms of size, location and application?
2. Target Market
3. Business Stability
How stable and secure is the channel's business model? Consider factors like size, viability, suitability for target market, management competency, their profitability and growth.
4. Financial Security Soundness and Structure
Understand the the channel partner's financial position. Request information about their revenue, size, growth, gross margin and profit, balance sheets and cash flow, are they a private or public company, how is their business financed?
5. Does their process and practice fit with yours?
Will partnering with you create a ‘solution conflict’ potentially reducing maintenance revenue, territory size or services? Are you able to provide new business opportunities, services and competitive advantage? Will your solution allow them to sell more and provide maximum potential revenue for you?
6. Skills and Experience
Does the channel have the skills and experience to sell and support your solutions? What is their sales experience, what might your solutions be as a proportion of their total revenue? What specialist skills can they offer? Who are their employees, their background and experience? What is their SE capability, their marketing strategy, their staffing resource and their contact level for their customers and prospects? Do they have the staffing capability for field sales, telesales marketing etc? How do they measure progress and customer satisfaction?
7. Technical Expertise
What specialist resources does the channel partner have? Do they have sufficient training plans, experience in network infrastructure, experience in presenting/demonstrations, knowledge of your implementation issues, the ability to be self-sufficient technically, a customer service mentality?
8. Who else are they resellers for?
What is the channel's track record, and their experiences, (good and bad) are they locked-in to any specific agreements?
9. What Knowledge do they have of you?
10. What is their Partnership mentality?
How committed is the channel to partner with you? Are they willing to dedicate staff to your business? Do they have lead generation plans and lead follow-up processes? Are they prepared to invest in demo-capability and training? Are they focused on a long-term partnership, willing to work together to develop a partnership plan and to commit to minimum targets ?
Remember that unlike direct selling, the sales relationship between you as the vendor and your channel starts after the sale. Finding the right partner is definitely the first critical step. After that the key to building a successful partner relationship will depend on the education and support provided by the vendor.
What suggestions might you have, as a vendor, to maintain the mindshare of a channel partner and to help them sell, sell more of your product so that they win and you win too?
You’ve selected what you believe to be the right channel partner, what do you do now to ensure that that channel partner views you as the preferred supplier? How do you build a long term, stable, partnership with the channel based on trust and mutual business benefit? As a business partner, the channel manager, should try to develop a strategy to help the channel perceive the business win of partnering with you. For a successful relationship that gets results, the channel manager should aim to become a valued member of the channel’s team, helping them to improve their performance.
How to successfully implement an effective channel strategy.
1. Think Win/Win/Win - Win for the Customer/Partner/ You
Channel partners must perceive a real win for them to want to work with you. The most powerful way to achieve this win is to help them achieve a business objective which is important to them. Once they have agreed to the plan and are willing to resource it, show them what the business win will be and ensure that this becomes an ongoing reality.
2. Be proactive and involved
Be proactive and involved showing how partnering with you will help the channel partner achieve their business goals. Focus attention and resources on areas where you can provide the solutions. Identify business opportunities providing a business win for both parties. Sell those opportunities to the channel partner and build the partnership around them.
3. Develop a Partnership Plan
The development of a partnership plan will provide a business focus for the partnership. The partner’s business win needs to be clear and concise. A clear plan will define mutual expectations of commitment and return, enabling both parties to plan for and ensure success. It will help to focus partner activity, maximizing productivity and reducing channel conflict, concentrating the partner’s attention and resources on their activity with you. It will also provide a method for monitoring and managing the partnership. A medium and long term focus will then promote long term, not deal-based partnerships. This will provide a means of ensuring that the channel partner commits the right resources to support the plan, fulfilling the role you had previously defined for them.
4. Build a partnership based on TRUST
There are three key decision criteria which people use when choosing a partner. The channel manager should apply all three:
- Can we TRUST this person, or company?
- Can we GET ALONG with this person, or company?
- Can they PROVIDE THE SERVICE we require?
In summary, to develop successful, profitable, channel relationships, as the channel manager think not about direct selling but about partnership selling. Go from being a sale’s professional to an expert consultant. Turn attention from the customer who might buy your product through the channel, to the channel partner themselves. Focus on the long, not the short term, not on closing the deal with the customer but on helping the partner to win and in so doing helping you to win and dramatically impact the bottom line.
What have been your experiences, either as a channel manager or as a channel partner, we would love to hear from you?