A well-designed partner strategy is a valuable asset for companies, especially in the software industry. But what are the building blocks that create value in a channel sales? For the software developer, it is about scale, access to customers, market penetration and solution integration.
For the channel partner, it is about creating a consistent revenue stream, driving adjacent technologies, and boosting customer loyalty. For both of them though, a huge foundation of those building blocks is a collaborative and jointly owned plan that helps them to do both.
Typically, when embarking on a new partnership, vendors are focused on how they can build a partnership that lasts and how that partnership can bring value to the company, its channel partners, and, most importantly, to the end users. So, here are four tips for vendors looking to build meaningful and strategic channel partnerships.
Selecting the right partner
The first step is about comparing your proposition as a vendor with the current business model of your potential channel partner. Ask yourself: are we doing this already? Are we in a competitive situation? What could this partnership bring to us? Does it complement or expand our current solution stack?
To build a relationship that lasts, seek out the companies that are prepared to build out a strategic 2-to-4-year plan. Make sure they focus on active growth and market penetration. In the era of the Great Resignation, strong technical and sales skills of the channel partner’s team are especially important.
Building relationships
Set the right expectations for the relationship from the beginning. You and your channel partner are building your businesses together, so it is crucial to ensure that your dynamic is harmonious. It takes time for a channel partner and vendor to fully understand each other’s business rhythm, operating methods, and how to apply them to your shared and agreed initiatives.
After learning about each other more, you’ll understand better how to leverage your strengths and create an association that complements both of your strategic objectives. To achieve this, it is important to start the conversation at a very high level and engage the partner in detailed and thorough planning.
Quality engagement
More vendors are becoming data-driven in their approach to building channel programmes. Intelligent, data-led planning can show the channel partners, in a concrete way, how your cooperation will help them grow. Focusing on successful outcomes for your partner’s business can help each other stay in sync.
When planning out a channel partnership, keep the following in mind: market penetration, current partner landscape, customer profile, and the user base that you are looking to expand. Once you have identified these areas, it is about leveraging data from the internal analytical systems to achieve better success in each area.
With each new focus or managed partner, you also need to develop a clear and concise, outcome-driven plan that showcases expectation and level of profitability. However, it is important not to just lean on data. Find a partner that fits your values and business approach, because in the end, it’s the commitment that matters most. This will make it easier to develop a business plan that you can both believe in and create a sense of ownership for both teams.
Meet regularly
According to a recent survey by Nuvias Group, 70 per cent of UK channel partners find remote working beneficial. However, 40 per cent also believe hybrid working makes running their business harder, with over a fifth of those surveyed saying they were frustrated by the inability to see customers and colleagues in person.
Vendors and channel partners need to meet regularly – and not just for the sake of it. These get-togethers provide an opportunity to think about what value each partner can add. Increasing meetings to once a week can ensure that all aspects of the business plan are being adhered to along the way. As restrictions lift, many companies across all industries are moving back to face-to-face meetings, with the aim that this will help to foster stronger relationships that are harder to build virtually.
Effective channel partnership begins with a robust association, and hinges on a thorough understanding of each other’s business goals. It’s all about setting the right expectations from the start, planning each step thoroughly, and taking the time to learn about each other’s ways of doing business.
By maintaining and continuously strengthening cooperation, businesses can create durable partnerships that serve the strategic needs of the vendor, channel partner, and end user.