Companies of all sizes use distribution channels to sell their products or services, either as a supplement to or in place of a direct sales team. Simply defined, a channel is any entity that serves as a middle-man between a company and its customers, most commonly as a reseller.
The goals of a channel partnership program are the same for any company and their partners, maximizing profits and revenue, expanding into new markets, and reducing costs. Ideally, all parties involved will benefit from the partnership. In reality, channel partnerships often fail at their goals because they are poorly developed and badly maintained.
Properly planned and initiated with energetic and ongoing cooperation and communication between partners, and with the appropriate investment of resources and time, channels can do what they’re supposed to do wonderfully well, and serve as the foundation of a satisfying and successful long-term business relationship.
Here are some solid and time-tested tips for planning and developing new partnerships, maintaining good relationships with existing ones, and building reliable revenue streams that will grow at a healthy rate over time.
· Hold a strategic planning summit. Whether forming a new channel partnership or fine-tuning an existing one, it’s a good idea to for all stakeholders in the venture to meet and get everyone’s expectations and concerns on the table. It’s essential to include representatives from all the company departments involved, marketing, sales, product development and management, etc.
· Agree on goals and benefits. It’s important that each partner has a clear understanding of the target revenues and other benefits each will receive to avoid misunderstandings and disagreements down the road.
· Assess training requirements. This should include evaluation of training needs for all the teams involved, but especially the sales team. Creating an ongoing and always available online training module, updated regularly, is an excellent approach.
· Determine marketing support needs. Devise a plan that clearly outlines the roles, responsibilities, strategies, and shared costs for both companies, and designate staff from each company to meet as often as needed to update it.
· Create a sales support strategy. It’s a sound policy to have dedicated teams made up of both sales and technical staff if the product or service is technically complicated, to devise sales materials and to meet with customers. Such teams can also meet regularly to discuss customer feedback, how to overcome objections, and refine sales approaches.
· Determine success metrics. Decide what analytics and metrics will be measured and tracked as a yardstick of success, and what will be reported to each company. Schedule quarterly meetings to review results and adjust strategies accordingly.
· Study competitor programs. Who are they partnering up with, and how is their program structured? A lot can be learned by paying attention to competitors and their channel partners, how successful they are, where their weaknesses lie, and ways to gain a competitive edge.
· Institute partner levels. A good motivational tool is to have different levels of partnership based on performance. For example, getting certified in a technical area or exceeding sales goals results in being moved up to a higher level, and higher benefits. Of course the details of this kind of performance-based structure must be clearly defined and strictly adhered to.
· Develop a partner selection strategy. Business relationships are investments, and it’s important to define the characteristics of the preferred partner for each type of market segment.
· Start slow and build momentum. Great channel partnerships aren’t built overnight, they take time, hard work, and commitment to really begin paying dividends. This is one race where slow and steady always wins the day.