How to Build Mutually Beneficial Channel Partnerships

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Mutually Beneficial Channel Partnerships

Introduction

When channel distributors and partners vendors team up, they can significantly expand their market reach through tapping into new customer segments. This can increase sales opportunities which equals boosted revenue and customer base growth.

Channel partnerships can offer cost efficiency, as vendors can leverage the resources and expertise of their partners without the need for significant investment in direct infrastructure and employee costs. This strategic collaboration also leads to enhanced brand visibility as businesses can benefit from the exposure and reputation of their channel partners. Beyond that, channel partnerships grant access to new ways of working which can spark innovation and improve their market offerings.

If you want to go fast, go alone. If you want to go far, go together.

The channel is an essential lifeblood to support the end user customer to help them secure and scale their businesses and enable them to flourish. It provides a solution to many companies who are looking to streamline their infrastructure and helps those who want to save costs from outsourcing in this challenging economic time. Canalys estimates there are more than 10 million channel, partner and alliance professionals that make up the industry, with 15,000 partner professionals using “ecosystem” in their title on LinkedIn.

The Importance of Collaboration

The IT managed services industry has also been growing. According to Canalys, it grew 12%, to £331 billion ~($419 billion) in 2022, with 335,000 global partners. However, at the end of 2023, Canalys reported customers have been getting nervous about IT spending. So, we find ourselves at this critical period in an industry that has the potential to accelerate growth during a time of volatility. The channel can guide businesses towards a more certain future by offering expert advice and consultation, facilitating positive change.

Channel partner leaders find themselves in this influential role to support their customer. Simultaneously, they find themselves having to make important decisions to best support their own business both profitably and efficiently. Choosing the right technology platform is crucial for streamlined growth and ensuring that those being served receive solid value.

AI is making a huge impact on the vast majority of organisations. We don’t want to make any assumptions on the evolution this will bring. However, it is likely that in the coming year more will want to adopt automation processes and more effective ways to scale new business growth. There will be further integration with security services, cloud migration, digital transformation, workflow and DevOps optimisation to name a few. Vendors and partner need to find new ways to support each other and adapt to the new demands from the customer. launchedtech.io

Customer needs are changing, so collaboration is more important than ever.

In the ideal partner ecosystem, channel partners decisively select a vendor and their technology to champion them and their clients. They commit to a seamless collaboration with the vendor fostering mutual growth and sustained investment in a longstanding alliance. However, despite this vision things don't always work out. Sometimes partners opt to go in a different direction and can sever ties.

There are many reasons why this can happen. The most prevalent issues revolve around shifting requirements, arduous business interactions, and inadequate or ineffective support with marketing, training, and pre/post-sales assistance.

Channel partners contend with many distractions vying for their attention such as clients, prospects, competitors, and the demands of vendors. The last scenario a vendor wants is to encounter execution deficiencies prompting channel partners to stop partnering. So, establishing a straightforward and adaptable internal and external channel framework can align expectations and objectives among all stakeholders to help nurture a robust channel engagement which can be enduring and mutually beneficial for the partnership.

It is important to remember that each partner has their own needs and the path to working together will be varied. To help guide enabled relationships, we ’ ve created a framework outlining common problems and effective solutions.

6 Key Areas For A Thriving Channel Partnership

Path to Profit

Partners will want to know and trust in their ability to sell a vendor’s products or services profitably.

Problem: Partners will have historically had different experiences with the various products they sell and how they service. There will be those who have been more profitable, and those less so. As such the products or services they choose to invest in will be balanced with how effective they will be at making a return. Partners, especially managed services providers can make money from the services they provide outside of the partners’ products, and according to Channelnomics this can be as much as 75%. With new tech driven by AI advancements, this could compound concerns about which solutions will bring the best path to profitability.

Solution: Establishing a shared set of objectives that the channel partner aims to pursue is crucial. Putting these shared goals in black and white supports both the vendor and partners with concrete reasons to align their objectives. Planning is an essential first step to define success by mutually agreeing upon three or four quantifiable outcomes that will serve as benchmarks for the partnership's success or failure. For instance: acquiring 40 new customers from a joint target account list or achieving a cross-sell penetration rate of 33%.

Emphasise strategy over tactics by clearly delineate the overarching goals before delving into the specifics of implementation. Partners will want the opportunity to validate their capability in building a profitable business under the vendor's brand. They seek to build their forecast, encompassing pricing models, employee costs, margins, marketing investments, and other variables.

Planning stands as the fundamental first stride toward forging a profitable collaborative alliance so it's imperative not to overly complicate the process repeatedly. Elaborate and protracted plans tend to dissuade partners from completion. Moreover, once these extensive, intricate templates are finally filled out, they often go unread and unreviewed.

It is important to explicitly define the roles and responsibilities of all stakeholders from the outset, ensuring everyone understands their obligations and expectations. To support this, schedule regular monthly or quarterly meetings and reference the plan during these sessions to track progress and reinforce accountability.

Enabling for Success

Partners look for training to enable them to effectively plan, market and sell products and services.

Problem: Traditional training fails to seamlessly integrate into real-time work habits due to its disconnection from actual task execution. The well-known saying that 80 percent of the knowledge gained in a training class vanishes as soon as participants leave the room is often because participants are forced to exert additional mental energy to internalise new facts and incorporate them into their daily work routines.

Solution: Vendors having a good understanding about their partners’ goals, and how they are trying to achieve them is important for crafting effective enablement strategies. It's imperative to offer comprehensive training programs to foster professional growth and the skill sets on the next couple of pages should be considered to support long-term buy-in.

Business Skills

Many channel partners require assistance in enhancing their business acumen. Consider collaborating with an author, local business school, or conducting dedicated courses tailored to the needs of partners.

Technical Skills

Equipping partners with in-depth technical knowledge about the products is essential for enabling them to deliver effective solutions to customers.

Sales and Marketing Training

Prioritise training sessions on crucial topics such as social selling and inbound marketing, as these are currently among the top requests from partners.

Sales Collateral

Provide partners with well-crafted sales collateral to support their selling efforts. Avoid leaving it solely to partners to develop their own presentations, sell sheets, etc.

Marketing Materials

Empower channel partners to generate demand by furnishing them with co-branded campaign landing pages, emails, and other marketing materials.

Access to Pre and Post-Sales Experts

Ensure partners have access to pre and post-sales experts who can assist them in handling objections and resolving issues that may arise during the sales process.

Moving beyond the training and support into practical deliverable work helps solidify the value. This can be done by providing partners with work-flow tools to guide them through business planning, marketing planning, incentive planning, and more effective selling. These combined with regular business reviews will provide the structure for understanding how enabled the partnership is for success.

Developing trusting channel partner relationships requires ongoing strategic effort and commitment. It requires consistent communication, collaborative planning, and personalised support. On the next few pages are some key pointers to help.

Open Communication

Maintaining transparent communication is paramount in any business partnership. With channel partners, it's crucial to keep them well-informed about company policies, product updates, market trends, and strategic decisions, especially if they impact your partner and shared initiatives. Facilitate an open dialogue by establishing clear channels for communication and feedback. Moreover, when vendors actively listen to partners’ updates, concerns, and suggestions, and respond promptly and constructively, it fosters an open and trusting work environment.

Shared Collaboration

Mutual goals and planning are foundational to successful business relationships. Regularly align objectives and create a shared vision of success. Continuously review goals and collaborate on developing strategies to achieve them. This approach strengthens the partnership and ensures alignment, resulting in expected value for both parties.

Personalised Support

Recognise that each channel partner has unique needs, challenges, and business models. Tailor support accordingly, whether through customised marketing materials, specialised training, or targeted incentives. Demonstrating personalised engagement illustrates that vendors value each partner as an individual.

Build a Community

The vendor can expand the value of the partner network by fostering connections and creating a community of organisations engaged in shared learning and peer support. Lead by organising partner events, co-hosted webinars, or industry forums where partners can exchange ideas and feel part of a collaborative community.

Consistency

Consistency is key in partner interactions. It's essential to follow through on commitments and promises. Demonstrating reliability in fulfilling business plans and commitments builds credibility and underscores your dependability as a business ally. Set realistic expectations from the beginning, and be transparent if plans or goals need adjustment, working collaboratively to find solutions.

Appreciation When Due

When vendors regularly acknowledge partners' efforts and achievements, even those outside the direct scope of your partnership, it strengthens the relationship. Recognition can be through direct outreach or public acknowledgment. Celebrating successes together fosters morale and reinforces the significance of the partnership.

Creating Demand

There are no sales without getting prospects interested in the products and services. Problem: There are many demand generation tools and services available, but few which support forecast outcomes to help with budgeting calculations. Even fewer platforms centralise prospect visibility to convert for effective ROI. As a result, many partners rely heavily on the vendor to build demand and execute campaigns to generate leads. This leads to issues like reliability and resource constraints, resulting in missed opportunities to add extra value through partner-provided elements.

Solution: Buyers need to be reached using multiple channels such as email, web, ads, social and more. Enabling partners with the right tools to connect with the prospect across multiple channels builds an effective demand machine to scale interest over time and generates a funnel for the future to convert more with less work. For partners, it’s crucial that vendors provide support in crafting a content strategy. This ensures that the message resonates with potential customers, creating awareness and facilitating an effective buyer’s journey.

Co-investing in marketing activity is a great way for the partnership to benefit from shared resources, shared prospect reach and access to new markets. It can also result in greater brand awareness, allows deeper insights into the target market, and offers the ability to leverage complementary skills.

Vendors providing their channel with leads is an effective way to utilise the wide brand power they hold and a way to ensure the prospect has the best experience. As an example, larger international enterprise opportunities may want to be supported directly by the vendor, and smaller prospects with more local needs may prefer being supported by the local channel services provider.

When leads are passed to the channel for partners to follow-up, effective communication and clear processes are essential. The first step is to qualify the leads and ensure they align with the channel partner's target market and capabilities. Once qualified, the lead transfer should be seamless and well-documented, using communication methods such as a dedicated partner portal. This ensures that the channel partner has all the necessary information to effectively follow up, enabling the closure of loops in deal registration or capturing reasons for non-advancement.

Support to Close Business

Business to business sales processes within IT can be complex.

Problem: Often sales reps within partners have a wide range of products to sell and as a result it can be difficult to become a product expert. This can have a negative impact in the sales process to match needs with the best solutions. It can be particularly harmful on a consultative technical sale when the buyer will need to justify the ROI during the final stages of a decision.

Solution: Providing sales reps with the tools to target and nurture prospects in real time creates a more productive methodology to support deal progression. A way to do this is by tracking the progression within a centralised platform that can support by providing the right content for the right stage, e.g. Case studies to help support the sale reps progress and convert more effectively.

Having an open and transparent culture between vendor and partner to improve close rates is important and where needed the vendor should provide pre-sales support to join calls.

Developing an ecosystem takes time and effort, and partners can tell when a vendor is not committing adequate time or energy to them. For more strategic partnerships there is the route to create in-house experts within the partners to support complex sales. The added advantage to this is that the partner can act as both the systems integrator and offer a comprehensive end-to-end service. To set this role up for success, include an initial phase of shadowing with the vendor teams and adopt co-selling to ensure competency. Those vendors who embrace “ as a service” need to ensure the right partners have the right skills to fully capitalise on retained end user business.

Access to MDF

Market Development Funds are often challenging to accurately report back on the ROI and in many cases the demonstrable value will not be recognised for several quarters.

Problem: MDF is a powerful tool for supporting solid partnerships and capitalising on market potential. However, in many cases vendors find themselves with budgets and plans that collect dust and experience issues of when plans do form, the results are less than desirable. Often partners are tasked with the creative duty to design innovative campaigns to secure funds which takes time, which is not always available in some cases. This then can result in a funded programme falling into traditional easy to execute awareness or incentive based activity. This type of activity is non-lead generating, and as such opportunity or deal registration volumes are low in the current quarter.

Solution: Partners should have the tools and platforms to create an effective business case, effectively use budget and show tangible return on investment.

The following elements should be considered when designing MDF utilisation:

Clearly Define Goals and Objectives

Establish specific, measurable objectives for the use of MDF.

Align Strategies with Partner Strengths

Vendors should customise MDF strategies to leverage the unique strengths and market positions of select partners. This will foster more effective and targeted marketing efforts.

Ensure Accountability

Implement tracking and reporting mechanisms to monitor the effectiveness of MDF-funded activities. This accountability ensures that funds are used efficiently, and goals are met.

Focus on Joint Planning

Collaborate with your partners in planning and executing marketing activities. This joint effort builds stronger relationships and ensures that campaigns are mutually beneficial.

Provide Marketing Support and Resources

Vendors should offer support in the form of content and execution guidance.

Regular Review and Adaptation

Continuously assess the impact of MDF activities and be ready to adapt strategies in response to market changes and partner feedback.

Educate and Train Partners

Conduct training sessions to educate partners about market trends, product details, and effective marketing techniques. Knowledgeable partners can utilise MDF more effectively.

Encourage Innovative Approaches

Vendors should encourage innovation and provide examples of use cases and alternative marketing strategies which have worked with other partners. This could include digital marketing initiatives, unique promotional events, or exploring new market segments.

Balance Flexibility and Control

While it’s important to set guidelines for MDF usage, also allow flexibility for partners to innovate and adapt strategies to their specific markets.

Leverage Data-Driven Insights

Use analytics to gain insights into market trends and consumer behaviour. This data can guide more effective allocation and utilisation of MDF.

Incentives for Success

Everyone loves an incentive, but everyone loves it more when partner and vendor’s goals are aligned.

Problem: Vendors provide incentives based on activity to drive certain behaviour, often when a specific product needs pushing within a quarter. This can lead to the problem if a partner’s goals are focused on a different area or even product which could be making them higher margins. Or, the vendor could be paying to drive volume which the partner could have naturally needed and results in failure to maximise on the potential of an incentive based programme.

Solution: Channel incentive programmes are a crucial part of the channel eco-system aimed at building growth to drive sales and market development. The optimal approach is to offer incentive opportunities and empower partners to present a compelling business case for accessing these incentive programmes. Partners should outline specific, time-bound goals they intend to accomplish through these programmes, which must undergo review and approval before access is granted. Team members within the partner organisation are subsequently rewarded based on both individual performance and the attainment of pre-established goals outlined at the programme ’ s outset.

Channel rebates are an effective tool for driving partner performance and increasing sales. By offering financial incentives to channel distributors and partners, companies can motivate them to meet specific goals and targets. Rebates provide a tangible reward for achieving sales targets and can help to align partner efforts with the company's strategic objectives. Utilising rebate management software can streamline the process, making it easier to track and manage rebates, ensuring accuracy and timely payments.

Channel SPIFFs (Sales Performance Incentive Funds) are a common form of channel incentive that provides immediate rewards for meeting specific sales targets within a short time frame. A workflow process helps partners select the incentive either within a vendor's PRM (Partner Relationship Management) system or integrated between vendor and partner CRM (Customer Relationship Management) systems a workflow process creates a way to set quantifiable goals and produced simple but effective business cases.

PRM tools play a valuable role in support partner programmes, and vendors will often use them to enhance:

Streamline Partner Onboarding

PRM systems can automate and simplify the partner onboarding process, ensuring swift integration into the ecosystem.

Monitor Performance

Helps to track and evaluate partner performance, enabling vendors to support partners in meeting predefined standards.

Facilitate Communication and Support with Training Materials

PRM tools serve as a centralised platform for seamless communication between vendors and partners, ensuring prompt resolution of any issues through readily accessible training materials and resources.

Enhance Collaboration

Employ PRM systems to foster collaboration among partners, providing tools and resources that facilitate joint efforts towards achieving shared objectives.

PRMs are only as valuable as the extent to which businesses leverage them, and they have their limitations. These often stem from a vendor first design, the requirement for strategic application, limited ability to produce leads and support sales in closing business.

Effective Collaboration Indicators

Mutual Growth and Success

Genuine loyalty is evident when partners are not solely focused on their own gains but actively contribute to mutual achievements. This collaborative approach strengthens a partnership, moving beyond contractual obligations to pursue shared objectives.

Proactive Engagement

Loyal partners demonstrate proactive engagement by staying informed about the vendor’s offerings, participating in training programs, and exploring innovative ways to enrich the partnership. Their enthusiasm translates into enhanced performance and ongoing innovation.

Brand Advocacy

Loyalty extends to brand advocacy, where partners willingly endorse the products or services within their professional networks and on various platforms. This advocacy, driven by a belief in the brand's value, expands reach and attracts new clients beyond the immediate network.

Longevity of Relationship

The duration of a partnership serves as a significant loyalty indicator, reflecting a history of trust, consistent value delivery, and mutual respect. Enduring partnerships withstand market changes and challenges, showcasing unwavering commitment and reliability.

Feedback and Collaboration

Truly loyal partners offer honest feedback, fostering a dialogue aimed at enhancing the partnership's strength and effectiveness. Their willingness to collaborate in problem-solving and strategising underscores a commitment to long-term success.

Understanding the significance of channel partnerships and earning loyalty over time is crucial. However, recognising that loyal partnerships can be intentionally nurtured and strategically leveraged to achieve specific outcomes is equally vital.

Conclusion

Implementing a well-built channel partner programme with enabled, motivated partners is essential for long-term success. By leveraging the strengths and capabilities of channel distributors and partners, vendors can benefit from strategic initiatives that drive mutual growth and continuous improvement. The key takeaways are to take a customer-centric, data-driven, and educational approach to channel marketing, emphasising the importance of building trust and reliability.

Partnering with channel distributors and implementing strong tools can empower users, inspire confidence, and provide practical solutions to address specific challenges and needs of the end user. A well-structured channel partner programme can effectively leverage market development funds and incentives through a partner portal or integrated system.

By doing this, vendors can ensure that their partners are equipped with the resources and support they need for success. Overall, embracing a strong partner first mindset and building a channel partner programme around the localised initiatives can lead to mutual growth and long-term success for everyone involved.

About the Author

Paul is Launched's Co-founder and Head of Strategic Alliances. Paul has over 17 years of experience in designing and executing go-to-market channel strategies working with global leading vendors to support their channel community.

Launched is a robust demand generation platform for sales and marketing teams who are under-resourced, overworked, use too many tools and are expected to exceed targets with little to no budget. It is a platform which provides that extra pair of hands, that places your product or service in front of the ideal customer profile. It is guaranteed to generate inbound leads and automatically enhance marketing and sales campaign performance.

The platform is used by the world’s leading vendors, distributors and channel partners to execute highly effective multi-touch over multi-channel prospect nurturing to producing tangible results to improve deal registration results.

Learn more at launchedtech.io