When you are a vendor and your strategy is to…
Every now and then new SaaS and cloud vendors that have created a partner program and want to attract partners are searching for questions like what type of channel partners exist, how to approach them etc. In this article we try to answer some of these question concerning what are channel partners, how to recruit and enable them.
What does channel partners means
Channel partners come in various forms, they can be reselling companies, value added companies, distributors, system integrators etc. In the broad essence it’s a company that partners with a vendor to offer or promote his products to end customers, either as the products stand or adding on top of them. In today’s ecosystem and with the transition of the vendor business model from licensing to SaaS other type of partners like referral have also become more significant to the industry.
What do channel partners do
Depending on the type of channel partner they can be reselling a product, offering support or consulting services to end customers or integrating a product to a bigger offering. Channel partners can do pretty much anything that a vendor is looking for, you just have to target the correct company based on your needs.
What do channel partners want
Channel partners want to partner with a vendor for various reasons. They may have some customers that are in need of a specific product so they approach a vendor to partner and resell that specific solution and get a commission in return. Others may need to add a well-known brand to their portfolio to gain some awareness. No matter what their motivation is there always is a monetary compensation or channel partners await to receive some leads from their vendors.
Why use channel partners
Partnering with channel partners is the fastest way for a company to grow its revenue and market reach. Channel partners usually have a customer base already in place so it’s easier for them to approach new customers. Also, it helps a company to promote their products in some geographic markets that are difficult to penetrate. A vendor can partner with a channel partner in a country that is not his primary target in order to expand before some competitors penetrate there first.
It requires minimum investment if a vendor partners with a local company rather than opening offices there and marketing the product. Finally, one main reason is that in some cultures, like in Japan, local customers always like to buy from a local representative even for very low cost software. And the same applies to Asia in general and some Latin American countries.
How channel partners work
Each company has its own processes in terms of how they operate in the market and what type o partnerships they are looking for. But in the next paragraphs we add a little bit on how to manage and incentivize them in order to have a healthy business relationship.
How to find channel partners
A lot of vendors that are looking for channel partners rely on Google search and their website to attract new partners. But this is not the optimal process as these partners may be getting approached by other vendors or attend some events like ChannelCon by Comptia to find their ideal vendor.
If you’re looking more actively to recruit partners then you can also try Elioplus that matches vendors with potential partners based on what you’re looking for and it provides a constant feed to your partner pipeline.
How to evaluate channel partners
There are many data points you can use to evaluate a partner company. Their size, so you can have an insight if they have the resources to dedicate to promote your product. Their revenues is also an indicator or you can even evaluate their customer base to check if they are positioned well in the market.
Our platform does data enrichment so you can have more valuable data concerning a potential company before establishing a partnership.
How to train channel partners
In many cases training is required before letting your partners to sell the product. This can be either done via a certification process where you require them to attend a training process or you can set up a training using an LMS system to evaluate your partners.
How to manage channel partners
Many vendors choose to manage their channel partners either using spreadsheets or a CRM. But these solutions don’t provide vendors with abilities to manage and enable their partner network to sell more their products. Elioplus offers a Partner Relationship Management and Collaboration solution to help vendors get more from their network. Using such a system you can increase your partner contribution to revenues by 3x and you can start for free managing your first 25 partners.
How to motivate channel partners
Finally, in order to close the loop a vendor has to have a reward system in place in order to boost active partners or motivate underperforming ones. Market development funds (MDFs), sales material, training and providing account managers to your partners are some ways used broadly to enable channel partners.
One thing that is also of importance is to have complete transparency on how you reward partners so there is no friction in your network from companies that are dissatisfied from the lack of rewards. Having transparency will help them to also increase their efforts in accomplishing targets.