So...you think "the channel" is your next channel? DO NOT do this...
Lately, you've been thinking..."Selling and marketing through partners would be a great way to accelerate our business."
Channel partners can be resellers, affiliates, VARs, consultants, agencies, distributors, brokers, OEMs, or even clients. No matter what you call them, common threads run through this approach. I've been on the front lines of "the channel" at five different companies. Here are my cautionary words of advice as you build your strategy:
DO NOT think for a minute that hunters and farmers are the same person
Hunters = spear. They find and secure new channel partners, and negotiate the compensation and contracts. "Biz Dev" or "Account Execs" are tenacious, hungry salespeople.
Farmers = pitchfork. They are the collaborative counsellor throughout the relationship. Customer success is their bread and butter. They *ahem* grow the relationship.
Now, I'm open to healthy debate on this. But IMHO, its too challenging to be both. The professional personality types are diametrically opposed. Do yourself and your team a solid: separate the skill sets. Let hunters hunt, let farmers farm. If marketing professionals support these respective teams, align their skill sets with the respective end goals.
DO NOT create "willy nilly" pricing strategies.
From the beginning, establish consistent and firm pricing. Your Finance or Sales Ops team will be happy to enforce it. If you don't, your sales teams will set pricing that's in their best interests. Soon you'll discover "the channel" is less lucrative than you had hoped. You'll have a whole pricing and data mess to clean up. Now, pricing may be a revenue share or product discount for your partners and/or pricing for their customers. No matter the model, establish a baseline that's fair to your channel partners, and also build in a healthy margin for your business that will help you in the long run. You'll want to offer partners and their customers financial incentives over time, while still protecting your bottom line. If you are selling through brokers or consultants who can't accept compensation - you still want to nail down competitive pricing for their customers. Otherwise customers could just go through your direct channel and cut out the middle man. That would be a bummer, right?
DO NOT believe that renewals just happen
Reoccurring revenue is a major reason for kicking off a channel strategy. You want more coin? Establish a strong Account Management team. Hire Renaissance men and women who are:
- Savvy at proactive communication with their partners, to provide helpful, actionable advice
- Expert at solving problems, diplomatically answering questions, and overcoming roadblocks when a critical issue arises
- Knowledgeable about product features, the product roadmap, and industry trends
- Creative in helping their partner launch and spread the word
- Poised, strategic, and analytical when summarizing performance for a partner
- Excellent at cross- or up-selling, while ensuring that additions are in the best interests of the partner and their customers
If you want to be successful in "the channel", you must invest in and support your Account Management team every step of the way. This will create trust with your partners and their customers. Trust results in loyalty, renewals and high NPS scores. And yes, more (reoccurring) coin.
DO NOT skimp on marketing
1) Your partners aren't marketers
(ok - unless you are in martech or a similar industry)
They are time starved and task focused. They want to grow their business, not yours. Sorry - you'll always be second fiddle.
First, ask them what they need and want in terms of marketing resources. Create what they've asked for and make it super simple for them to sell and spread the word. Set up a resource center with sales AND marketing resources: presentation decks, FAQs, email templates, collateral, banners, videos, social media materials. Arm your Account Management (and Sales) teams with these same tools. And keep em' fresh and frequent. It takes full-time resources to do this right: copywriters, designers, email marketers, product marketers, a video team, and marketing managers. Believe me, it's worth the investment. Your partners will be thrilled and your competition will be jealous.
2) Marketing drives customer engagement, satisfaction, and utilization. If that falters, customers won't stay or buy. Your partners won't renew.
You want to make "the channel" successful? Do the marketing for your partners. And don't just find ways to feed them leads, but consider enabling best-in-class customer marketing tactics to engage your partners' customers. Work with your partner to identify ways that you can market directly to their customers on their behalf. Never reach out directly to their network without giving the partner a head's up first. They own those contacts and they want to control how and how often they are contacted. Once you strike a balance, things like email onboarding and nurture flows, FAQs, videos, or in-product messaging can be relevant and helpful for your partners' customers. Find out what works for your model and establish a regular candace of it.
Think through whether the channel is right for your business. Be prepared for it to take many months - even years - to deliver the desired ROI. Trust me - it's a business within a business. If it's approached strategically and resourced appropriately the channel can provide an additional revenue stream AND you'll be helping your partners increase their bottom and offer value to their customers.
Do you have a channel strategy? What are your words of advice and encouragement? Drop a line or two in the comments below so we can all benefit from your expertise.