The COVID-19 pandemic has had a significant impact on consumer buying trends. As entire populations were told to stay at home and brick-and-mortar stores closed their doors for months on end, many B2B and B2C companies lacking a solid online strategy were caught out unawares. Channel sales slowed; or crashed; dramatically, and both vendors and channel partners found their established partner programs ill-equipped to cope with the fallout.
And it’s not over yet!
According to IDC’s 2021 IT Channels and Alliances Predictions webinar held on February 11, 2021, the events of 2020 will cause 25% or more of all channel partners to shift focus, change direction, be acquired, or close their doors during the year. As a result, “an era of accelerated partner evolution” will force vendors to reinvent their channel programs, critically analyzing the partner landscape for deeper insights before placing their bets, deploying new strategies, and investing in next-gen partner relationship management (PRM) solutions.
With market indicators pointing to partner-centricity as the key to success, here are seven essential steps to building a highly-profitable channel sales strategy.
Step 1: Create a partner persona
Choosing the wrong channel partners can increase costs, limit revenue growth, and surrender market share to competitors. Forrester asserts that empowered customers “demand a new level of specialization and sophistication,” with “the emergence of nontraditional partnerships and alliances” complicating the task of finding and recruiting the right partners.
Following a “partner-centric approach” modeled on best practices, create the “ideal” partner persona by asking relevant questions:
- What do I need and expect from a partner?
- What is the preferred business model (MSP, VAR, SI, etc.)?
- What industry knowledge and penetration are needed?
- What locations and geographies need to be covered?
- What solution gaps need to be filled?
- What technical expertise is required?
Step 2: Identify potential partners
Once you’ve created your partner persona, use a data-driven, analytical approach to identify potential resellers, prioritizing those who check the most boxes. Once identified, engage to confirm interest and evaluate the relationship potential together using the following questions:
- What is your unique value proposition in the market?
- What synergy do you see between our companies, e.g., same target market?
- What skills and resources do you have to meet the needs of the end customer?
- How will our partnership help you reach your goals?
- What do you see as the biggest obstacle to success?
- What are you willing to invest in the partnership?
- Can we really stand out and make a difference?
Remember: Choose your channel partners; don’t let them choose you. Ignore unsolicited inquiries from reps and distributors asking to distribute your products without adding value aligned with your goals.
Step 3: Set measurable outcomes
Building a channel partner program can be a challenge. With each side having its own vested interests, transparency based upon a belief in mutual success is essential. Create a strong, written plan encompassing:
- A clear set of objectives
- Definition of the target market
- Joint strategies and tactics
- Roles and responsibilities
- Resources committed
- Success metrics
- Target ROI
Lastly, agree on tools and processes for communicating, tracking progress, resolving issues, and resetting goals. And, just in case, agree on an exit strategy should things not work out the way you planned.
Step 4: Automate engagement
As the market evolves and partner expectations increase, IDC envisions automation and artificial intelligence (AI) as the primary drivers for improved partner engagement. Vendors will need to invest in automated and intelligent partner relationship management (PRM) solutions to improve the partner experience (PX) and drive sustainable ecosystem growth by:
- Optimizing lead qualification and distribution via automated “push” mechanisms
- Implementing efficient asset distribution for campaigns and promotions
- Engaging with remote global partners across multiple time zones
- Providing a self-service portal for effective two-way communications
As you tune your PRM solution to deliver results, be mindful that one size does not fit all. Partners need flexibility based on local market conditions and use cases, so find ways to enable localization beyond simply translating assets.
Step 5: Invest in relationships
As automated systems are rolled out delivering leads and content, you may feel you’re losing control as a vendor. Now is the time to invest in people, committing dedicated resources in the form of partner managers to foster relationships. Representing multiple vendors, channel partners can be a valuable source of competitive information, allowing you to identify threats early and proactively innovate to address them before they disrupt your business.
In addition, recognize the value of partner feedback, introducing channel employees to product managers and engineers to help drive innovation throughout the supply chain. While this may require a certain amount of negotiation with internal stakeholders, advocate for your partners, highlighting the channel’s value as one of the primary ways to drive growth.
Step 6: Enable the channel
Once relationships are established, empower your channel partners through knowledge sharing. Provide whatever is needed to help them become successful and see the results of their efforts. In addition to providing an easy to use PRM portal, channel enablement includes:
- Technical training: Give your partners free access to your product(s) so they can understand precisely how it works, what it does, and the value it provides. Follow that up with in-depth product training and regular updates on new features and functions.
- Industry expertise: Stay up-to-date with the latest challenges and trends for each target industry and sector. Educate your partners on what they don’t know, helping them find new ways to position your products.
- Sales training: With partners selling up the value chain to business leaders, provide comprehensive training on how to sell your products to both technical and non-technical audiences.
While 20% of your partners may bring in 80% of the revenue today, things can change. Don’t neglect the 80% bringing in 20%. They may be tomorrow’s 20% bringing in the 80%! Enabling smaller partners doesn’t have to be cumbersome or time-consuming. Simply leverage your PRM portal to deliver the same standard training to all tiers within your partner program.
Step 7: Celebrate success
Building a lucrative channel sales strategy entails nurturing loyalty and committing to never-ending improvement. Publicly recognize your partners’ achievements and leverage their success. Roll lessons learned and best practices into ongoing training initiatives if you can ethically do so without violating confidentiality. Share success stories internally to raise awareness of the value your channel partners bring to the company. Champion your partners by making sure their voice is heard based on their contributions.
If you engage the right partners, treat them like VIPs, provide them with the best tools and training, and celebrate their success, you’ll be sure to capture both mindshare and share-of-wallet. Diligently follow the seven steps highlighted above while avoiding three common mistakes: building a channel before you have a channel strategy, not investing in great supporting content, and treating your channel partner sales reps like employees.
Building a successful channel is hard work and takes time, but there are ways to accelerate the process and quickly generate predictable revenue streams. Find out more with these 5 Successful Partner Relationship Management Strategies or ask us!