Understanding the need to optimize channel partner collaborations is one thing. But how can companies actually leverage channel partnerships for better business growth? In the second blog of our article series, we outline the essential steps to building a successful partner strategy.
Undoubtedly, successful channel partnerships in the software and technology space deliver growth. But how do you find, motivate, and reward channel partners for your company? They need to fit your goals as well as your market. And you need to manage the ongoing relationship with care.
From “Why” to “How”: We have identified fourkey pillars to developing a successful partner strategy to unlock better growth for your company – and your channel partners.
How to leverage channel partnerships for better business growth
1. Define your partner strategy: Set some rules
Whether you are taking existing channel partners on a new journey, or finding new ones, you need to define your own rules internally. Consider your strategic goals for sales, then identify which customers your internal teams will serve, and which ones to reach through a channel partner.
It may be as simple as color-coding customers and creating different processes for direct, indirect and jointly served customers. Focus on which guidelines need to be developed to prevent channel conflicts between who serves which customer.
2. Motivate and reward the right channel partners: 360° eligibility criteria and benefits
Much of the hard work takes place before you start your new channel partnership journey, as you consider what kind of partners you need. Prioritizing quality over quantity is crucial when it comes to selecting channel partners. Rather than working with a large number who may require more energy than they bring, it is better to work with a smaller group of carefully chosen partners.
Base eligibility on capabilities, economics, and strategic fit – look for companies that match your market focus, as well as your customers’ needs. Can potential candidates cover the areas throughout the customer journey, where you need most support? It can be useful to list these criteria, then measure against existing channel partners before looking further afield. Are they able to deliver on all requirements? Or do you need to look for new partner collaborations?
Remember, your channel partners need to align with your business goals, but the opportunity needs to be viable for them too. Define incentives on objectives and structured KPIs. Depending on the partner types, there may be variations in the value-sharing model to ensure a win-win scenario and reflect their business contributions.
However, it’s crucial to carefully manage these models to avoid cannibalization risks, such as partners buying in bulk and undercutting vendors when targeting the same customers.
As your organization starts to work with more channel partners, create a formalized channel partner program which rewards desired behavior, while offering an attractive business case for them – this way both sides will benefit.
3. Co-develop your value proposition: Take your channel partner on the whole journey
When you bring a new channel partner on board, bring them fully into the fold and develop your value proposition together. You need to be unified in your thinking, so that your customer hears a compelling joint proposition. Ultimately, you need to consider your ability to deliver together, and you must reflect that in your joint customer offer.
4. Get partner-ready: Enable your channel partner with the tools for today and for the future
As you embark on new channel partnerships, it’s important that your own team is prepared. Define clear strategic objectives for collaboration and make sure that your people and your processes are ready. Consider the workflows, know whom to involve when, and take steps internally to allocate who does what – you will likely need a dedicated internal team to manage the relationship with your channel partners and ensure success.
As expressed by John Scola, GVP Software Partner Activation & Experience at SAP, the challenge lies in the fact that this dedicated team, not being directly tied to the core business, is often treated as a stepchild: “Having a dedicated internal team is indeed vital for successful partner enablement. The truth is: The channel team is often viewed as competition, lacking sufficient funding and support to navigate their path independently. While the importance of integration may seem evident, it is often neglected in practice. To optimize results, it is therefore essential to integrate this team seamlessly into the wider organization, capitalizing on existing infrastructure, content, and resources.”
Remember to plan for future collaboration and partnership as well as more immediate milestones – for example, make sure to update your channel partners on product upgrades and functionality as changes happen, as much as you do your own team. Treat channel partners as if they are your own salespeople, and have robust systems in place for reporting and monitoring outcomes.
Developing a partner strategy that gets results
By following some proactive steps and continuously nurturing your channel partnerships, you can drive your business growth and create a win-win situation for both your company and your channel partners. Learn more about the benefits here in Part 1: