You’ve got a thriving digital business. Now you’re ready for the next stage of growth, and you’re considering reaching out to channel partners to expand your distribution network. Is this the right path for your company? How do you build an effective relationship? And what resources should you be providing to your partners so they can help you grow? This article will answer those questions.
The Value of Channel Partners
Channel partnerships can be a very powerful way to hasten your sales expansion. While your direct distribution channels got your business to where it is now, growing revenues through those channels can take a long time. Meanwhile, establishing the right channel partners will allow you to reach a much wider market at a quicker pace.
Here are a few of the key benefits channel partners can offer:
External Sales Amplification
Growing your internal sales team organically requires a lot of time, resources and managerial attention. This is even more cumbersome if you’re selling software to a niche, where you need to focus more attention on buyer personas. The time spent hiring and educating new internal staff on your solution is an unavoidably expensive and lengthy process.
In contrast, a channel partner program shaves off much of the costs associated with training new staff. You can simply identify channel partners who are successful in your industry and provide them with the core details needed about your product to sell it. In many cases, working with just a handful of resellers will easily allow you to triple or quadruple your sales arsenal, without exerting the time and resources spent internally.
Increased Digital Exposure
Not only can channel partners enhance your sales processes, but they can also dramatically expand your marketing penetration. There are a variety of types of channel partners, like resellers and affiliates (more on them later) that can exponentially increase the amount of traffic visiting your digital properties. Whether your goal is to capture more leads or increase brand awareness, channel partners will help you get more eyes on your prize, giving your internal marketing team more time to focus on strategy and less time executing.
Industry Knowledge and Connectivity
Regardless of what your type of product you sell, there are channel partners who will be both familiar and well-equipped to help you increase revenue in your industry.
Your partners’ will likely have spent a long time building up their market knowledge in their respective industries. Taking advantage of both the relationships they’ve accumulated and their keen sense of the problems your buyers are hoping to solve, your customer acquisition process will ultimately accelerate when leveraging their talents.
Additionally, partners will likely have valuable feedback on how you can improve your solutions to better fit the needs of the market.
Access to International Markets
If you’re ready to build on your domestic success by expanding globally, international channel partners are a must.
Most entrepreneurial ecommerce companies or software startups have limited resources. This makes it unrealistic to launch additional offices in overseas markets. At the same time, a local presence is often critical to succeeding with B2B customers.
Partnering with local resellers allows you to establish a more structured presence in your key markets, while also providing an avenue for learning more about what works best for its respective customers. Check our Global Growth: The Definitive Guide to dive deeper into other aspects of the process.
How to Build Effective Partner Relationships
Channel partners are most effective when you actively help them to help you. Putting work into building a fruitful, long-term relationship is key. To that end, there are a number of best practices that will help you to get the most of your relationships:
1. Pick the Right Type of Partner
Channel partners fall under three main categories. It’s critical to understand the differences between these partner types, and to choose the right ones for your specific business needs.
Resellers specialize in selling products developed by other companies. Often, they have cultivated relationships with an existing customer base and will sometimes even provide technical support. Resellers will purchase your product at a discounted rate and then sell it to customers for a high cost, pocketing the price difference.
Value-Added Resellers create supplementary add-ons to your products, which they then sell to customers in a bundled offering. They are interested primarily in products that can act as a “platform” or base for their own solutions. The most well-known example of this model is a cellphone service provider like Verizon. They don’t develop or manufacture cellphones themselves, but need to provide them in order to sell customers their own service.
Affiliates will use their own websites to market your products and services. They do this by creating a custom trackable link to determine sales that were made as a result of their efforts, earning a commission in the process. When it comes to commissioning your affiliates, your company can choose a variety of ways to pay them. This can include actions such as completing a lead-signup form, downloading a mobile app, signing up for a free trial, clicks, impressions and more. With affiliates, you have the flexibility to choose a payout method that is sustainable for your success. A good example of an affiliate program is Amazon, where anyone can sign up and receive custom links to start selling on their behalf.
Take the time to understand which type of business model your partner has, and you will set the foundation for a strong working relationship.
2. Educate Your Partners
Channel partners are sales generalists. They might be very good at what they do, but probably won’t be very familiar with your specific products or marketing strategy. In order to maximize their productivity, you will have to help bring them up to speed.
Product Knowledge can be a challenge because partner reps often prefer to work on relationships, not learning the intricacies of your latest solutions. So it’s important to make this information as simple and accessible as possible. A great way to do this is to develop a user-friendly online resource site that includes product information, brochures and sales sheets. To keep them up-to-date on the latest developments, you should also be sending them regular newsletters and product-related blog posts, as well as the occasional webinar to answer questions and hear their feedback.
Marketing Strategy is important for channel partners to understand because customers are increasingly doing their own research before buying – 81% of them, in fact. This makes it critical for your partners to know what’s going on behind the marketing curtain. In addition to this general education, you should also regularly update partners on the latest lead data, sales performance trends and content resources for each stage in a buyer’s journey.
While this might seem like a lot of work, bear in mind that these educational efforts are highly leveraged. As mentioned earlier, the benefit of having a channel partner is that you won’t have to teach individual reps, since the partners themselves will be in charge of that ongoing training.
3. Solicit Feedback From Your Partners
At the same time as you are educating your partners, you should also be actively learning from their experiences. Seeking direct feedback on what your partners are seeing and hearing “in the field” can help you improve your offerings.
One way to do this is to send regular surveys to your partners. Ask them what they perceive to be your key strengths and weaknesses, and what they need from you to do their job better. It’s important to be proactive in this process, as surveys often go unanswered. For partners that don’t respond, follow up with a phone call and possibly even a direct mailing of a hard copy of the survey.
An even more powerful way to “double down” on this concept is to take the top 5 to 10 percent of your best-performing partners and form a “partner advisory board”. Actively involve them in the process of developing new marketing campaigns and sales materials, then follow up on their best suggestions. This will also help nurture a much closer relationship with your partners, as they will see that their contributions are being taken seriously.
4. Automate The Payment Process
While this might seem obvious, ensuring that your partners are paid on time is paramount for their continued efforts in driving more revenue for your business. As you begin to add more partners within your channel network across new markets, managing their payments can quickly become a very cumbersome task, especially if your payments platform can’t manage their payouts.
By using an ecommerce platform that can automate the process, you can mitigate late, declined, and other forms of missed payments. Your partners can get paid on a consistent basis, keeping them happy and motivated towards building your long-term success.
Partner and Prosper
If you’ve mainly relied on in-house sales and marketing channels to grow your ecommerce business, opening the doors to channel partners might seem like a big step. But wisely selected, a carefully developed channel partner program can greatly skyrocket your growth. Follow the steps in this article and you’ll be well on your way to building valuable partner relationships you can count on!