Introduction
A profitable channel partner strategy involves developing and nurturing relationships with third-party businesses (channel partners) to distribute and sell your products or services. The goal is to leverage your partners' strengths and resources to increase your market reach, boost sales, and, ultimately, generate more revenue.
In order to achieve a profitable channel partner strategy 7 steps need to be followed:
- Design your partner channel strategy plan;
- Construct a partner roadmap;
- Identify your ideal partner;
- Create sales and marketing collateral;
- Train and prepare new partners;
- Provide adequate support to partners;
- Ensure both parties are happy.
Ready to successfully apply them? Let's find out how to do that with this article.
Channel Partner Strategy Definition
A channel partner strategy is a sales plan that ensures an organization has the right mix of channels, partners, and capabilities to sell products.
The strategy has to be aligned with broader business goals, accelerating growth and supporting customers through partners and resellers.
To ensure an effective and profitable partner program, you have to collaborate with internal stakeholders to identify customers' needs, determine the types of partners needed, and outline key objectives related to revenue goals.
What Are The Three Types of Channel Partners?
Organizations that want to increase their brand awareness, boost their sales, and customer loyalty must work closely with their channel partners.
A channel partner is a company that promotes and sells your products or services. They can supply you with significant marketing and sales resources, allowing you to build your business more quickly than you could on your own.
They are effectively an extension of your team, so you need to recognize their worth and foster their loyalty to your business and offerings.
1. Independent Dealers
Independent dealers are the distributors and merchants who sell your goods. Understanding not only your business (and how to get your goods to market) but also their business and underlying principles is crucial when considering a channel partnership reward program.
Think about what will motivate them to promote your goods to customers who enter your store or to sell more of them. Consider whether they will highlight your business in their marketing or give you better shelf space.
Providing incentives for promoting your product is essential since these are only a few of the aspects of working with independent distributors that have a direct impact on your business.
2. Distributors
Many organizations utilize distributors to store, move, and sell their goods to retailers, product installers, or directly to consumers. They have plenty of resources and control over choosing which companies and goods they will start to market first. To increase sales, you must stay at the forefront of their minds.
Since many independent dealers can choose whose distributors they buy from, co-op or manufacturer funding allows distributors to entice dealers and customers to buy from them.
Providing rewards to the distributor will encourage them to market your items, which will increase top-line sales. This is essential to gaining their loyalty.
3. Independent Sales Representatives
Independent sales representatives frequently have a line card with the brands and items they sell. Giving them incentives for marketing and selling your goods provides them the freedom to agree to terms that will still leave them with enough room to make the enterprise worthwhile.
These are typically small, tight-knit groups that are aware of when businesses pay them for promoting and selling their items. Of course, it is essential to pay their commissions from product sales.
It will be beneficial in the short and long terms to focus their attention by implementing a rewards program for your new product offers, making off-cycle purchases for future sales, and giving them a cause to promote your brand.
The Importance of Channel Partners
Partnerships are essential in business. Channel partners can help your company grow by spreading its presence into new markets. With the right channel partners, you can capture customers on their end, which will enable you to drive them to your product seamlessly.
What are some of the benefits of working with a channel partner?
Utilize existing partnerships and market presence quickly
Salespeople have the problem of breaking into new markets, particularly for new products or regional expansion.
Channel partners may help you establish a market presence, use your existing customer base, and gain insights into marketing regulations, messaging, and target personalities.
Sales professionals can use these partners to increase brand awareness and direct sales, resulting in higher profitability and brand exposure.
Enhance your competitive edge by rounding out your offering
The goods of your partners can fill holes in your own or integrate to enhance your capabilities.
Prospects would rather utilize a single software solution that meets numerous needs than multiple separate platforms.
Collaboration with partners to produce comprehensive packages can reduce continuing expenses, data collecting, and internal processes for clients.
The whole is more appealing than the sum of its parts.
Cost-sharing to improve marketing reach
Channel partners are paid a share of the earnings generated by each new contract they register. As a result, it is typical for them to contribute a portion of the marketing costs as well.
To take it a step further, rather than approaching channel managers with their own co-marketing activities, partners may occasionally contact channel managers with their own.
Create a marketing development fund budget and approval process in which you contribute to their marketing team's efforts to promote your products to the client.
It's a win-win situation: partners feel empowered, and you spend less money on marketing employees and advertising. Suddenly, your budget can reach new heights.
Your competitors almost certainly have channel partners
As evidenced by the numerous real-world examples provided above, an increasing number of B2B organizations are fostering channel partner programs in order to increase sales and strengthen their international presence.
The more traction you allow competitors to achieve in creating a loyal following among technology partners and users, the more difficult it will be to persuade them to eventually switch to your product.
Why do you need channel partners? These companies will very certainly be participating in a program and providing software solutions regardless. Why not have them promote yours instead of one of your competitors'?
Channel Partner Strategy Definition
A channel partner strategy is a sales plan that ensures an organization has the right mix of channels, partners, and capabilities to sell products.
It should align with broader business goals, accelerating growth and supporting customers through partners and resellers.
To ensure an effective and profitable partner program, collaborate with internal stakeholders to identify customers' needs, determine the types of partners needed, and outline key objectives related to revenue goals.
How to Create a Channel Partner Strategy
A channel partner strategy plan can be an extremely valuable asset to businesses of all sizes, especially in the software industry.
Although big companies like Zoom, Slack, and HubSpot have employed these kinds of plans with considerable success, smaller companies can do the same.
If you are considering a channel partnership strategy, there are 3 primary models to choose from: 1) affiliate, 2) referral, and 3) resellers. Your chosen program will depend on what you feel fits best with your company and products.
After identifying which partnership model suits your needs the best, it’s time to design and implement the program.
Designing your channel partner strategy plan can be a complex ordeal since you will need to find a balance between offering an enticing reward and turning a profit.
Building an attractive plan can go a long way toward securing high-quality partnerships that can provide returns for years to come. However, the work doesn’t stop at securing a partnership.
To get the most out of your channel partners, you will want to ensure they have the resources and support they need to bring in customers. Providing your partners with the proper tools can help take their marketing and sales to the next level. Treat the partnership as a growth opportunity and continue to nurture it as it continues to grow and flourish.
Step 1: Design Your Partner Channel Strategy Plan
The first step in implementing your partner channel strategy plan is figuring out which model suits your needs the best. There are 3 primary methods to choose from:
Program Type #1: Affiliate Partners
Affiliate partnerships leverage your partner’s audience and influence to direct new customers through your sales channels. The commission is only paid out once a product is purchased, so this is a very efficient way to pay for high-converting traffic.
Affiliate Partners act as independent marketers who are primarily concerned about securing the traffic that will convert and earn them a commission.
These types of partnerships can be pretty hands-off, as it’s entirely up to the affiliate to generate buzz around your offerings. Affiliate programs are pretty popular, which means commissions can be pretty competitive. Still, the upside is that you only pay when there is a sale rather than based on the traffic generated.
Program Type #2: Referral Partners
Referral partnerships are similar to affiliates. However, they tend to supply higher-quality leads. While affiliates act as a marketing front to generate high-converting traffic, referrals leverage existing audiences to provide targeted traffic.
Referral partners understand what their audience is looking for and can put your product in front of the right people.
Because the relationship is oftentimes more personal, referrals can help establish a better connection with your new customers than affiliate marketers.
Program Type #3: Reseller Partners
Reseller Partners act as an extension of your own sales team.
These partners allow you to scale up your sales team without investing more cash into hiring and expanding office space.
Reseller partnerships are an excellent option when expanding into new marketplaces and countries. Finding the right reseller partners can secure a solid knowledge base of laws and regulations and a go-to translator to help with marketing.
Once you’ve chosen your preferred partnership, it’s time to lay out the details and partnership rewards. Designing a well-balanced partnership program can take a little time, as you will want to make sure you are providing enough value to attract high-quality partners.
Providing a special deal your partner can promote helps them sell your product. Even if it’s only a small discount, a “special deal” can help your partners sell your product with less effort.
Step 2: Construct a Partner Roadmap
While plenty of businesses offer a referral or affiliate link without any requirements or training, this is not an optimal setup for any channel partnership.
Giving a partnership to anyone can lead to less reputable sources representing you and your company. This can cause many issues, including poor company representation and low-quality traffic/customers.
Constructing a Partner Onboarding and lifecycle roadmap will ensure your channel partner strategy plan is effective and maintains high standards.
Your potential partners' roadmap should include several things:
- Introduction to the company and its standards;
- Training and development;
- Additional resources and support;
- Introductory compensation;
- Continued support and feedback.
Some partnerships will include different levels of compensation based on performance and quality. In this case, you can build certain thresholds into the roadmap to reward successful and high-quality partners.
This can be increased commission, bonus checks, and additional deals or discounts. Providing a means of progress can do a lot to nurture and encourage the partnership and ensure you are at the forefront of your partner’s mind.
Step 3: Focus on a Channel Partner Recruitment Strategy
Not every partner will be a good match for your company.
Just because someone boasts a large following doesn’t mean that they can provide you with the quality traffic or leads you are looking for. Therefore, you should ask yourself several questions to identify the best partners.
- Who is their audience? Since they will be pitching to their audience, their audience will become your future customers. Look at the type of people your potential partner attracts and compare them to your ideal customer. Will they find value in your offering?
- How do they represent themselves? No matter the type of partnership you pursue, your partner will represent you and your brand. Do they conduct themselves in a manner that complements your company?
- Are they a good fit? Company image is extremely important, and you will want to ensure that your company values align; otherwise, you will be sending mixed messages.
A big part of choosing the ideal partner is looking at the audience they attract. You need to ask yourself if these are the types of customers you want to deal with on a regular basis. Will they add consistent value to your brand, or will it just be a one-off sale?
Step 4: Create Sales & Marketing Collateral
Providing a good set of resources is a great step to set your partnership program apart. These can include additional product information, samples, free trials, informational videos/trailers, and more. These types of resources can help your partners and boost their conversions significantly. You are the one who knows your product the best, so passing on that knowledge and detail is key.
If you are running your own marketing campaigns, it can be beneficial to share some of those resources with your potential partners.
Infographics, product images, and GIFs are great forms of media your partners can use to add to their social media, blog posts, and more. This will ensure the media they use is high quality, accurate, and up-to-date.
Step 5: Create a Channel Partner Training Strategy
Training and development are just a way of life when dealing with new employees. You want to get them up to speed as quickly as possible so they can be efficient and effective. The same goes for your partners. Providing training and educational material can go a long way in helping your new partners understand your products.
While your channel partners probably won’t want to become product experts, helping them gain a deeper understanding of the basics can give them a leg-up in persuading their audience to take a look at your products. It also helps to clear up any misunderstandings that may start so that you don’t have a partner spreading misinformation or making false claims.
Step 6: Prioritise Building Successful Partner Channels
A good partnership requires effort from both sides. While you can hand out informational material and wish your partners the best, that will not yield results.
Even though your company doesn’t directly employ your partners, they are still representing you, and your customers see them as an extension of the brand.
That’s why it’s important to ensure you have high-quality partners and provide continued support even after the initial introduction. Maintaining a good relationship will go a long way toward keeping your partners interested.
It’s also a great way to push new information and deals their way when you release new products or offerings. Keeping them connected and feeling like a valued part of the team will create a long-lasting partnership that will benefit both parties.
Step 7: Ensure You Have a Strong Channel Partner Engagement Strategy
One of the most important things you can do is check up on your partnerships regularly to ensure that both parties are content with the deal. For a long-term partnership to last, both parties should benefit.
That means that you should be making money or adding additional value to your brand, and your partners should earn commissions or get value back in various forms.
Over time, you may need to reevaluate certain partnerships. This might mean enticing a high-performing partner with a better commission deal or letting a partner go because their behavior or representation reflects poorly on your company.
No matter the reason, it’s important to stay up-to-date with your partners and ensure the right message is conveyed.
Implementing a successful channel partner program requires considerable work and planning, but if done correctly, the benefits can be enjoyed for years to come.
Partnerships offer high-impact marketing options that can considerably enhance your company's growth and sales. Finding the right partners will put your product in front of engaged audiences who are much more inclined to buy.
Embracing Channel Partner Software to Build Long-Term Partnerships
A successful partnership requires continued work and support, so don’t just hand out a referral link and let them go. Nurturing the relationship can help get the most out of the deal and leave both parties much better off.
Designing a channel partner strategy plan is one thing, but managing the partnership is another issue. Kiflo provides an all-in-one tool that helps you monitor and manage your partnerships while keeping the entire partner management cycle simple.
Whether you plan to offer a referral program, sign up affiliates, or expand your sales force with resellers, Kiflo provides a platform that can handle and organize it all.
