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Depending on the nature of the business, most companies rely on channel partners, dealers, and distributors to bridge the respective company and its valuable consumers. Therefore, it is crucial to improve channel partner engagement to increase channel sales. The truth of the hour is that it is an era of globalization where the link between channel partners and companies is becoming increasingly important—considering the opportunities it brings to companies in terms of opening multiple doors and allowing them to grow heights that would otherwise be quite a task for companies to achieve with its existing operational force.
Additionally, with the expertise they walk in, a good channel partner exposes the companies to realize how much optimization they can introduce to the current way of operations. The power-packed tool to strengthen the channel partner bond is here: Take a peek into Compass and unleash new possibilities.
We can, therefore, assert that channel partners and distributors or dealers play a crucial role as advocates of a company and are significant contributors to growth.
Phillip L. Peck, director of sales for EagleBurgmann, US, validates this with his quote,
"Distribution is the most viable alternative to complement and supplement a direct sales organization."
This should make it very clear that irrespective of how efficient a company is, it is practically impossible to be self-sufficient, and a strong channel partner association is the most viable solution to make up for it.
Having established this, it is somewhat disheartening to state that the relationship between most companies and channel partners is still very transactional and more like that of a client and a service provider.
Look at it this way: all company employees contribute towards the growth, and channel partners also contribute to the company's growth. When this is the case, isn't it only fair to treat them as an integral part of the business and not merely as a service provider?
If you agree with our proposition, this article has ways to improve your relationship with your channel partners and the benefits of doing the same. So read on, pick out inputs you feel are viable, and implement them to see for yourself the difference in the impact your channel partners bring to the organization.
Who are Channel Partners?
A channel partner can be a person or an organization that provides services or sells products. They contribute to the company’s indirect sales and can be anyone ranging from resellers, service providers, retailers, agents, vendors, logistics partners, or last-mile delivery agents.
Why having a Channel Partner Engagement Strategy is Important?
Having a channel partner engagement strategy is an imperative part of building your channel. It can be defined as the collection of processes and programs geared towards the effective management of partners. Moreover, it helps you understand where you are headed with your partners and how to influence their perceptions of your company.
Your channel tries to reach out to the same prospects that you do and if you don't try to engage them in a way that adds value, your partner will. This is where a channel partner engagement strategy kicks in.
With that said, setting up a channel partner engagement plan is just the beginning. A strategy should not just be about creating a 'one size fits all' plan for your partners, but rather leveraging an approach that is specific and effective to you.
Channel partner engagement strategy is critical to reaching and acquiring new customers at low costs. It allows business partners to leverage their existing consumer base, which is prospective customers as well. In essence, they do not need to pay for marketing campaigns to establish and build their brands, nor do they have to expose new-to-market generic brands to the market at large. Instead, you rely on your channel partners to bring leads in—though some industries might have specific restrictions against this type of approach. By partnering with trusted brand representatives who share common objectives and skills with your team, you can increase sales while maximizing profitability.
Chanel Partner Engagement Strategy: Tips to Engage Channel Partners with an Inseparable Bond
A lot of organizations struggle with a roadmap for their partner relationships. They know that their partners are important and that they need to nurture the relationships, but they don't have a clear outline for how to achieve the goal. They have thought about this topic in isolation but haven't developed a strategy that aligns with other parts of their business. But we have made one.
Here’s everything you need to know about developing an effective channel partner engagement strategy to build a strong and healthy relationship.
1. Have them thoroughly inducted into your organization and its values
It is essential for them to understand your organization and what it stands for, the values, ethical practices, and more because you’re getting them to represent your company in front of potential clients and you do not want to dilute your brand positioning. Taking efforts to do so will ensure your brand identity is in alignment and held high as opposed to making mere functional pitches.
2. Communicate to them your goals, expectations and future plans
This communication helps to align them with your business goals clearly and objectively. They also understand how much you are relying on them with their contribution. Most importantly, communicating plans and the scope of your partnership with the channel partner to accomplish it is going to plant in the minds of your channel partners the trust that there is potential for the association to be a long-term association and thus gives them an extra push to put in their best efforts.
3. Train them thoroughly about your product/service
Sure, they come in with the expertise to sell and the network, but their efforts will lead to fruition only when they deliver the best pitch regarding the functional benefits your product or service has for the potential buyer.
So, instead of just handing off responsibility to your channel partners, take them through your product or service and get them to believe what a value addition it can be to your consumers. Do not let them build their pitch based on their little knowledge of your product or service because you know your product or service best, and they do not have to reinvent the wheel to figure out selling points. Training them on this saves them time and ensures higher conversion rates.
4. Set targets for them
Be clear about your expectations from your channel partners, and put that in writing. Point to note that being transparent does not mean being unrealistic. Work out the math if you’re very sure about how much business a channel partner can bring in, or just do it on a trial and error basis to find out how much they can deliver and then introduce targets to motivate them further in terms of performance.
Being realistic about the targets you set for them and putting in the effort to back your numbers with some rationale will make them believe the target is achievable, and thinking, as we all know, is the first step to achieving something. Another sure proven way to push them towards achieving your desired targets is to reward them for it. The world is a fan of incentives, so spend a little time identifying tangible or intangible rewards and announcing the same to keep them on their toes to reach your targets. So, four things here, find a rationale, set targets, communicate the targets with the rationale, and recognize and reward them for achieving targets.
5. Build an open relationship
Your channel partners, dealers, or distributors have to be comfortable walking up to you and communicating anything they wish with regard to your business. This, unfortunately, is easier to put on paper than done, considering the client and service provider hierarchy that dominates the relationship. However, you need to know that you need them just as much as they need you and if your attitude is moving on to another channel partner, then let me remind you, you’re going to be on a constant run.
Every channel partner will want a say, they are human beings, after all, and you need to establish a pathway to ease any communication to build a stronger relationship. When you do this, you’re making them more comfortable discussing the rights and wrongs openly and increasing the possibilities of having great ideas bounced off. Having an open and conversational relationship is like giving them the power of voice in exchange for additional support and goodwill to grow your business.
6. Empathize with your channel partners
No curve is always exponential. There will be ups and downs, and the business your channel partners will bring will also have its ups and downs. After a few months of downfall, the first reaction to this situation is to fire for no reason or explanation. The only reason given to the channel partners is it’s not working out, but ever care to understand what went wrong? Well, maybe you should figure out the root cause of declining business.
Buy them for their word and understand if it is because of a variable outside their control. Fix things from the business end and let there be scope for errors. Nothing can bring you more loyalty than empathizing with your channel partners during a downfall. Not saying ignore the downfall but examine, understand, listen, and think of bouncing back instead of just blaming your channel partner for it.
7. Motivate your channel partners
If your employees need motivation, don't you think your channel partners need them too? Like an employee, a motivated channel partner has many more reasons to give a higher turnover than a non-motivated channel partner.
And so far, we've only spoken about your firing them out of business, but what about a channel partner denying to do business with you? That would be sad, wouldn't it? Repeating, you must treat your channel partners like your employees, and all conditions apply here. By motivating your channel partners, their loyalty increases, their urge to perform better increases, and under such circumstances, your business has a better chance of growth.
However, do not mistake motivation for rewards and recognition. While incentives might be a part of the motivation, that's not all. Motivation could be simply placing trust in them and giving them the freedom to make individual decisions, making them the boss of their territories, etc. You can motivate them by being available to provide the support they might need. Motivation can be in the form of empathy and example set by your company breaking the barriers, and conversing like equals.
It can be simple: quick responses to queries and quick fixes. It can come from your interest in your channel partners and how much you invest in them. Not merely in money but also in how much you invest in the relationship.
Lastly, motivation can result from the channel incentives you lay out for them, such as the bonus you pay them, the gifts you send out to them on special occasions, or the incentives you give them to achieve their targets. The latest trend is gifting people's experiences instead of tangible and perishable gifts. The best part is there is no need for you to break your head also much about providing motivation which involves monetary incentives. Some companies automate the entire experience. Compass is one such company. All you need to worry about is the behavioral motivation and set a system to facilitate rewards, and you're good to go.
Channel partner engagement is an important activity for many companies. A well-thought-out strategy can help you reach the right audiences, get more leads, and close more deals. Partnering with channel partners will help you build a better brand presence in their industry and bring you one step closer to your target consumer, which will hopefully result in better sales.
- Your channel partners play a vital role in your business's growth.
- You need to treat them like your employees by building a stable relationship to make the most of this partnership.
- Try and stay away from the old client-service provider hierarchy.
- Be open and empathetic to make room for their comfort.
- Motivate them to gain their loyalty and punctuality.
Frequently asked questions on channel partner strategy
Here are the frequently asked questions on channel partner strategy:
1. What is channel partner strategy?
Channel partner strategy is a planned approach for managing and leveraging third-party entities or intermediaries (channel partners) to distribute and sell products or services.
Channel partner strategy involves:
- Managing channel partners
- Expanding market reach
- Improve customer access
- Enhance sales effectiveness.
2. What are the types of channel partners?
Types of channel partners include:
- Value-Added Resellers (VARs)
- Systems Integrators
- Original Equipment Manufacturers (OEMs)
- Independent Software Vendors (ISVs)
- Managed Service Providers (MSPs)
- Affiliate Partners
- Value-Added Distributors (VADs)
1. Resellers/Distributors: Purchase products and resell them to end customers.
2. Value-Added Resellers (VARs): Provide additional services and customization alongside product sales.
3. Systems Integrators: Specialize in integrating different technologies and systems for comprehensive solutions.
4. Original Equipment Manufacturers (OEMs): Incorporate components from another company into their own products.
5. Independent Software Vendors (ISVs): Develop and sell software applications.
6. Consultants/Advisors: Offer consulting services and industry expertise.
7. Managed Service Providers (MSPs): Provide ongoing management and maintenance services.
8. Affiliate Partners: Promote products through their own marketing channels for commissions.
9. Value-Added Distributors (VADs): Offer additional services and support in the distribution process.
10. Retailers: Sell products directly to end consumers.