Building A Strong Channel Partnership Takes Time
We are living in a world that moves at a much faster pace than any other time in history. Instant gratification is a click away, or verbal command, where bots and algorithms satisfy any request. Let’s face it, there has been no better time to be alive on this planet — no matter what you read about in the news, or on your social media feed. However, fantastic technology advances aside, all of this instant self-service makes it a challenge when you are trying to build new partnerships. When it comes to building a business, no one person is an island. And bots won’t cut it.
From a business perspective, there are many reasons to build out a channel. Chief among them is adding additional sales resources, and taking advantage of existing customer relationships that the channel partners bring to the table. This is especially important when building an organization in a fast growing market. The entire goal is to reach target customers faster, and less expensively than you could achieve on your own. This requires a commitment to the model, and execution of the plan.
Let’s assume you have settled on a channel sales compensation model, based off of your own direct sales experience…and you are ready to execute a plan to turn on the channel to help you expand your reach. Here are a few things you need to have or be aware of:
Patience: Channel sales usually take a long time to get off the ground. The reason for this is that your new partners have different priorities than you do. While you are totally focused on your product, they are focused on other products and vendors that keep their lights on. You will be a small part of their revenue plan…and your solution will have to convince them, over time, to invest more of their time in you.
Resale: If you are taking the reseller approach, be prepared to be constantly compared to the existing solutions that reseller has built a business off of. There will be constant friction because change is painful, especially if it requires financial investment. Anything seen as cannibalizing the current business model will be met with resistance. These relationships take the most time to develop, because they generate the most friction at the deal level, impacting the sellers compensation. The sellers are the ones who have to get religion about the solution, and they are the biggest skeptics around.
Profit: You need to understand how your channel partners make money. Selling product may only be the insertion point into a target customer. Do they prefer to charge for consulting services or integration services? Do you have enough margin enhancement to incent them to resell, or would they rather you handle that side of the business? One of the best ways to ensure channel partners see value in your solution is to incent your own sales organization to leverage partners vs going direct. This shows that you have extended trust, and places a higher value in the partnership.
Educate. Educate. Educate: Channel Partners, especially in the beginning, need consistent and persistent education. You need to remind yourself how long it took you to learn something. This isn’t an overnight cram session. Real education is iterative and constant. You never stop learning, so you need to never stop educating. Develop and constantly update sell sheets, overcoming objections, competitive differentiators, etc. Be ready to consistently review your channel model and messaging, address gaps in the channel program. Invest in channel marketing roles whose job is to create appropriate marketing, training, go-to-market materials and sales plays. This never ends, and it is never perfect. Expect friction.
Delivery or Demand Gen: Determine what your channel will be leveraged for in the beginning. Do you need them for delivery or demand generation? Or both? If for delivery — determine how you will deliver leads to them, and set the expectation early that they lead with your solution, vs an agnostic stance. If you need them for demand generation — then you need to choose partners that have that skill, and build a plan that helps to fund that function — this means a richer resale margin, or outright MDF to support that expense.
Communication: Developing open and honest communication is key to building and maintaining a partnership. Partnerships become relationships, and relationships are bumpy. It’s vital to have open lines of communication no matter how difficult some conversations may be. It takes a long time to get to know each other. Especially when you start talking about money, mistakes and differing management styles. Strong, honest communication will create trust between both parties and will help set clear expectations. The goal is to earn each other’s respect.
I am a huge fan of partnership building and building channel sales organizations. It’s indisputable that you can achieve greater scale leveraging a partner community than you can on your own. The challenge is adapting culture without having to compromise values. There is no easy way around this, and it requires truly understanding, trusting and respecting each other.
It requires taking time to know one another — especially on the hard days.
Shift your view.