Stay relevant by shifting to a channel management strategy with a collaborative and value-added approach to forge sustainable partnerships. Price-oriented and transactional models are short-sighted and fail to meet real channel partner needs.
This statement is confirmed by the February 2018 CMO Survey. The use of channel partners to reach consumers has dropped from 70,7% in 2013 to 54,1% today. Despite the significant fall, companies are gaining greater value out of their relationships either in the purchase volume, scope per price per unit paid by partners.
Source: THE CMO SURVEY 2018
Following the next 7 steps you will be able to optimize and manage your channels :
1. Research
To define a good channel management strategy first you need a good research. You want to know which are the trends, what are your competitors doing or what's happening in other markets. Channel is being disrupted by new players so you also need to know who they are and define a plan to partner with them.
Understanding how your channel works, which are the "Give & Gets", your positioning, the tipology of partners that are more valuable for you or the reasons why they would choose you are key to improve your channel management strategy.
For example, hiring experienced and qualified channel representatives to engage with channel partners is very valuable. The reason is that untrained amateurs usually frustrate partners because they don't get the job done, so experienced employees will make their lifes easier.
Also, you need to analyze the company as a whole (strategies, goals, resources, etc) to know what you can do to improve your channel engagement.
After that, you should be able to answer questions like:
- How many partners do I need to achieve our sales goals? How much can my channel grow?
- In which industries are my partners specialized? Which tools do I need to manage the channel?
- Do I even need partners or can I use a vertical integration strategy?
2. Choose the Right Partners
Choosing the right partners is ROI positive. After researching, If you found out you need more partners to achieve your goals then you have to define your ideal partner.
Now you can look for the ideal partner in your own or external database and through social listening. Once you have your list of partners, you need to define an scoring system so you can prioritize which ones you will contact first.
Define a method to contact and convince them to be your partner, it has to include:
- Creating content for the specific job titles that you are going to reach.
- Lead nurturing: automation tools will help you design and implement a sequence of actions to get the partners you want.
- Marketing plan: focus on partner's attention (where do they consume content?) and build your marketing plan around that including PPC, email marketing, SEO, events and other marketing techniques.
3. Establish Long-Term Relationships
Once you have your new partners you have to take care of them. Giving them a hand to sell will allow you to optimize your resources.
Although you have new partners you need to pay attention to the old ones. Developing long-term relationships is key for an effective channel management. Instead of switching suppliers based on the price, build a solid supplier based on those things that will strengthen your relationships.
Your partners will value that you help them hiring employees and with the onboarding training. Also, helping them with activation campaigns or to sell your product effectively will result in an increase of their loyalty.
It is true that your partners make commissions selling your products but they might earn even more with the after-sales services. Even the littlest change in your product might cut their profit margins so that's not a very good idea. Higher profitability motivates them to sell more, hence take them into consideration before making these changes to know how that will affect them and they will thank you.
At the end of the day it's all about going the extra mile and not limit your relationship to rappels or similar. These details are the ones that increase their appreciation and loyalty, motivating them to spend more in you than in your competitors.
4. Channel Enablement
A usual mistake is to overload the channel partner with information. In doing this, they'll have no idea where to start and they need to be product experts.
Using online technologies will allow you to share this information, to teach your partners easier and faster. Sales enablement content like product details or categories, shared at the right time is highly valuable for them.
Moreover, using a platform that allows sharing small chunks of information would increase not only their knowledge but also its retention. Hence, making it easy for them to learn will help them sell more and faster.
One of the most important gaps between Channel Partners and your company might be an undefined sales process. Defining it and training your partner's accordingly is one of the best ROI Channel Enablement lifts.
Even better, your partner will really value a stronger go-to-market collaboration using digital marketing to generate awareness and leads. You can also invest directly into their sales team by providing your sales people or supporting some of their expenses.
5. Create a Community
Your improved channel management strategy needs to include a way to encourage your partners to collaborate so they can optimize their resources and grow together.
To do that, take advantage of the digital platforms. These are some of the best ways to create a community among your partners:
- Create groups where they can share content and discuss. LinkedIn is an excellent place to do that.
- Organize online and offline events to foster a community feeling, to network and create successful strategic partnerships.
- Look for advocates and influencers. These people are helpful to guide, solve doubts and are perceived as experts by your partners.
6. Measure and Analyze your Results
Very often, Channel Management Programs follow the Pareto Principle where 80% of the revenue is generated by 20% of the partners. Hence, it is highly convenient to find out what makes these Channel Partners so effective and use that information when hselecting new ones.
Of course, a channel manager wants to increase the benefits that come from their partners. To do so you need to:
- Create a Partner Performance Scoreboard to measure their progress and the achievements of goals.
- Define a Sales Funnel and use all the data that you get from the channel to do sales forecasts.
- Use Partnering Automation for predictive modelling, to help you manage the channel, their behaviour and results.
- Getting a solid Partner Relationship Management tool to know how every part of the channel interacts with each other. From the smallest transaction in a local store to the most complex activities.
7. Optimize and Keep Improving
After applying the previous steps you need to look for ways to optimize your processes and improve them continuously. These are some ideas that will help you with that task:
- Go social: change from the traditional pure selling model to Social Selling and Account Based Marketing.
- Optimize marketing and sales processes by using automation tools.
- Use co-selling partnerships as an extension of your sales force.
- Teach and help your partners to use marketing tools so they can be more efficient and profitable.
