Partner ecosystems are complex things. Technology shifts, the evolution of buyer behaviour, and the intensification of competition all make managing a network of channel partners increasingly challenging.
But these networks can be hugely lucrative. For instance, around 73% of the IT market now passes through intermediaries. Distributors, resellers and other partners can help you unlock new markets, boost your revenue and increase your reach – all without the overheads associated with direct sales teams.
And this is exactly why it’s vital to have a strategy. In this guide we’re going to explore six channel partner management strategies that could be game changers for your organisation.
How to Strengthen Channel Partner Management
When considering channel partner management it’s important to remember that your partners are extensions of your brand. They represent you to your customers and have a real impact on how your company is perceived, and also how you grow.
This highlights the significant value of formalising channel management best practices into a proper channel partner strategy. The following six strategies are designed to help you create or maintain a high-performing partner network that delivers the results you want, consistently.
1. Identify and Prioritise High-Potential Partners
Arguably the first thing you need to do is to define what makes a great partner for your organisation. Consider factors such as:
- Strategic fit: Do they deal with your ideal customer profile (ICP)? Do they operate in the sector(s) that you want to penetrate?
- Capability: Do they have the market presence, sales capacity and expertise to effectively represent your business and your products?
- Market coverage: Do they have useful relationships with key accounts? Are they able to access customers you struggle to reach directly?
- Motivation: Are they really committed to your success?
You should use partner scoring or segmentation to categorise and prioritise your partners. A popular way to do this is by using a tiered system, which looks at things like revenue contribution, strategic importance and growth potential. Doing this allows you to allocate resources where they will do the most good.
For example, you might give your top-tier partners priority access to new products, enhanced marketing development funds and dedicated account management – whereas mid-tier would get standard incentives and support, and low-tier minimal investment unless they can demonstrate improvement. This approach means you don’t waste money on partners who don’t deliver worthwhile returns.
2. Train Your Channel Partners
If your partners don’t fully understand your products, they’ll find it very difficult to position them, deal with objections or effectively explain their value. However, with proper training you get educated partners who become experts in your offerings, from technical features to benefits and customer use cases.
If you’re providing training to your channel partners, it should cover:
- Product knowledge: Training on your products should include features, benefits, technical specifications, and differentiators.
- Customer use cases: Partners need to understand how your products address the pain points of your target audience to be able to sell effectively.
- Competitive positioning: They also need to know how your offerings compare to alternative products to be able to confidently discuss competing solutions.
- Sales process and methodology: To make sure your products are sold in a consistent manner that aligns with your business, partners need to understand how you qualify opportunities, run discovery and close deals.
The right training boosts confidence, accuracy and overall sales effectiveness, meaning more conversions and better ROI. Remember – channel partners are your sales team, so they need at least the same level of focus and time and effort to be successful
3. Build Strong Relationships With Your Channel Partners
Communication is key for all relationships, and this is certainly true when it comes to channel partners. Regular, open communication ensures alignment on goals and collaboration on challenges, but it takes some effort.
It’s important to maintain regular touchpoints to stay connected and to understand what’s going on in your partner’s business. You might do this via quarterly reviews, monthly calls or informal catch-ups – what matters is that you’re keeping lines of communication open.
In these conversations make an effort to understand how their organisation works. This helps you support them better and anticipate issues before can become real problems. And on this topic, it’s always better to provide proactive support, rather than waiting for partners to contact you with problems. Think about how you can help them optimise what they’re doing – this might be with customer success stories, competitive insights or new market intelligence.
Partners who feel supported and valued are much more likely to invest in your partnership and prioritise you and your products.
4. Create the Right Incentives and Rewards
When it comes to channel management, motivation matters. Your partners will be working with multiple vendors, so you need to motivate them to focus on your products. Sales incentive programmes are a great way to make sure you reward desirable partner behaviours. If you want to incentivise channel partners, consider the following:
- Pipeline growth: Partners should be rewarded not just for closing deals, but creating qualified opportunities. This helps build a stronger, more sustainable pipeline.
- Revenue tiers: Tiered bonuses or rebates that grow as partners hit higher thresholds ensure they remain motivated, even after hitting initial targets.
- Certifications: You could also offer enhanced margins or bonuses to those who complete training programmes.
Non-financial incentives can also be powerful. These might include early access to new products, recognition programmes, or additional support such as strategic planning sessions.
Whether financial or not, incentive programmes need to be simple and easy to understand if you want your partners to engage with them. If they’re too complex or confusing, they just won’t work.
5. Monitor and Manage Your Channel Data
Tracking your data is a must to understand how well partners are performing and where there are bottlenecks. Key metrics to monitor include:
- Deal registration: You can gauge pipeline health by the number of opportunities being created.
- Pipeline velocity: This is important because slow sales cycles might suggest process issues or training gaps.
- Partner engagement: Partners who don’t engage with your portal, training or resources are more likely to perform badly.
- Training completion: Are partners completing certifications? Those who do usually perform better than those who don’t.
- Revenue contribution: Monitors which partners are delivering and which aren’t.
- Win rates: Shows which channel partners are most effective at closing sales.
Data is vital to identify bottlenecks and problems early. For example, if a partner that was performing well starts to drop off, you can check in and see what support you can offer. Dashboards and analytics should be used to inform your decisions as they give you an invaluable oversight of real-time progress and trends.
6. Transform Your Programme With Channel Management Software
Channel management software (often called Partner Relationship Management software) is hugely valuable for organisations working with channel partners. As well as generally automating and streamlining key processes – and thereby helping you scale – it offers the following benefits:
- Deal registration: Partners can register opportunities and get instant conflict checking and approval.
- Partner onboarding: Partners can onboard quickly and consistently via automated workflows.
- Incentive management: The platform calculates rewards against performance and targets and pays out automatically.
- Training and certification: Learning management systems are integrated, allowing easy access and tracking of training.
- Analytics and reporting: Real-time data provides invaluable insights into partner performance and ROI.
- Marketing automation: Via the platform partners can access co-branded marketing materials, and run and track campaigns.
A solid PRM (Partner Relationship Management) platform makes it easier for partners to work with you, benefiting your relationship, their engagement, and your sales. To further emphasise the value of PRM, the market is currently worth over USD 90 billion and is projected to reach over USD 226 billion by 2030.
Need Help With Your Distribution Strategy?
To run a successful channel partner programme you need expertise, resources and a lot of headspace to dedicate to it. Many businesses – especially those expanding into new markets like the UK or Europe – lean on specialists to manage their channel partnerships for them, thereby accelerating success while reducing complexity.
At E360 we’ve worked with over 100 startups, scale-ups and enterprises across numerous sectors, helping them develop and run successful channel programmes. Our Account Executives and Channel Managers have a minimum of 10 years’ proven sales experience, and in-depth expertise at building channel relationships that deliver consistent results.
If you want to develop a distribution strategy or expand your partner ecosystem, get in touch today. We can navigate the complexity for you and make sure you’re getting the most from your partnerships.