Partner Program – The 14 Steps to Build Your Reseller Channel Program
Learn how to create and build a professional reseller channel partner program to grow your business globally with help of partners.
Original article was published on Daniel Nilsson's blog.
How can a reseller channel partner program help you?
Katrina Razavi, a business development professional, helped a B2B startup increase annual revenue by 1,983% and increase user base by 1,000% within six months…without any upfront costs.
Yes, you guessed it right. Partner reseller program is the right answer.
Partner programs are so powerful that even multi-billion tech companies including Microsoft, VMWare, Oracle, eBay and thousands of others use it.
Despite its huge success, creating successful partner programs isn’t a piece of cake. It takes time, effort, and most importantly, strategic planning. I have tried to make it simpler for you by introducing this 14-step process.
This blog post is inspired by my SlideShare presentation with the same title. Like my other blog posts and presentations, this article is also based on my personal experiences, reviews from industry experts. And I am sharing the conclusions so that you don’t have to spin the wheel again.
If you want to read an example of how I designed a partner reseller program please read my article How I built a hugely successful partner program and you can too (In-depth).
- Before you Start
- Step 1: Define a value proposition
- Step 2: Create a customer-centric sales process
- Step 3: Benchmark competitors
- Step 4: Define the type of partners
- Step 5: Success factors
- Step 6: Define motivation drivers and elements
- Step 7: Define the programmatic elements
- Step 8: Define responsibilities and expectations
- Step 9: Define a framework
- Step 10: Build internal capacities and systems
- Step 11: Define how to measure success
- Step 12: Develop a marketing strategy
- Step 13: Create a partner selection strategy
- Step 14: Build a focused partner organization
- 9 success factors for your partner reseller channel program
- 6 potential failure points
- Free tools
- Presentation Create Reseller Channel Partner Program
Before you start…
Business goals, vision, and executive support
There are a few important business parameters you need to keep in mind: business goals, vision, and executive support. Creating a professional reseller channel partner program is a big investment of time, effort, and resources.
So it is essential that the partner program you want to create is aligned with the company strategy and business goals. Plus, it is indispensable to have executive support before you kick-off the process.
Now that you know the precautions involved, let’s start creating your very own professional partner program.
The Creation is Not a Straight Line
The creation of a Partner Program is not a straight line. It’s a lovely mess that gets more clear & straight, the more you learn & develop it. Suddenly the world or your business change and you have to start over.
Step1: Define a value proposition
A solid value proposition automatically gives you an edge. It’s the number one thing to determine because it will determine whether people will bother learning more about your solution, services, or product.
Defining a value proposition is about letting people know clearly what they will get out of the partner program. You can use some tools to define customer gains, pain points, and rank what is more important for them. Next step is always to compare it your value proposition with your competitors, understanding market, and alternatives. Once you have this data, you can define a solid base value proposition.
You can also check out my popular SlideShare presentation and article titled How to Create a Strong Value Proposition for B2B. You can also take my course on Udemy which will help you in creating value propositions for B2B.
Step 2: Create a customer-centric sales process
Customers now know about your solution. So now what? There’s still so much to do.
You need to understand the entire buyer journey or the sales process. What steps are involved in the sales process? How many steps are there? What needs to be done at each stage of the sales process? All these questions need to be answered in detail.
But when you create the sales process, it is important that it is from the customer perspective—or customer-centric, as they call it.
Read the article How to Design a Sales Process for B2B Sales that explains how you can create a better sales process and improve your sales result.
Step 3: Benchmark competitors
Ever heard, “Keep your friends close, and enemies closer.” The essence is same here. You need to understand what your competitors are doing.
Try to get a deeper understanding of their partner programs. What is the target audience for their partner programs? How have they organized it? What benefits are they offering to the customers? What kind of relationships are they developing with their partners? And how well is their program turning out?
This data will help you a lot of insights before you even begin offering your partner program. You will know what is working and what is not.
Step 4: Define the type of partners
A success of a partnership lies in the value each party gets out of it. So your partnership largely depends on what value you are building for your customers.
For that, you need to identify and define the type of partners that may be relevant to your business and choose the best among them. Here are a few examples of partner types which might be relevant for your business:
- Value-added Resellers (VAR): A company that resells software, hardware, and/or networking products and provides value beyond order fulfillment.
- Managed service providers (MSP): A company that remotely manages a customer’s IT infrastructure and/or end-user systems, typically on a proactive basis and under a subscription model.
- Consultants: An experienced individual that is trained to analyze and advise
a client in order to help the client make the best possible choices.
- System Integrators (SI): An individual or business that builds computing systems for clients
by combining hardware and software products from multiple vendors.
- Original Equipment Manufacturers (OEM): A broad term whose meaning has evolved over time. In the past, OEM referred to the company that originally built a given product, which was then sold to other companies to rebrand and resell. Over time, however, the term is more frequently used to describe those companies in the business of rebranding a manufacturer’s products and selling them to end customers.
- Independent Software Vendors (ISV): Makes and sells software products that run on one or more computer hardware or operating system platforms.
- Distributors: A distributor is an intermediary entity between the producer of a product & another entity in the distribution channel or supply chains, such as a retailer, a value-added reseller (VAR) or a system integrator (SI).
Step 5: Success factors
Now that you clearly know your sales process and what type of partners will be the most suitable for your business, it is now important to understand what are the critical factors that will enable your partners to close deals?
What are the critical factors? Is it a Proof of concept? Good support? Pricing structure? Or an efficient project management?
You need to create a framework that will help your partners and prospects to understand critical success factors. By doing this, you are helping your partners in making more sales.
Step 6: Define motivation drivers and elements
Everything looks good for now. You have the right value proposition. Sales process. Right partners. Success factors. But what will drive your partners to act on the success factors?
This is probably one of the most creative parts of all the 14-steps. Here, you need to think out of the box. Define what elements can motivate your partners and what actions you need to take to help your partners become better at delivering key success factors.
Let’s say proof of concept is your key success factor. So you need to educate and motivate your partners on how they can do a proof of concept better. Or show them how doing a proof of concept can reap huge benefits.
Here are a few examples of key drivers that might be suitable for your business:
- Educating partners: There is a lack of knowledge today and the partner program
will drive partners to increase their knowledge levels.
- Increase sales through sales activities: It is believed that this can be done by motivating partners to identify new a business in the form of leads and projects and by making sure that POCs done are managed professionally.
- Improved and certified hardware and software solutions: It is identified as a risk and sales problem when the solutions are not working properly. The partner program will motivate partners to certify their solutions.
- Build new and improved solutions: By helping partners to cooperate and build improved solutions the value provided to customers will be increased.
- Deliver excellent support: It is a key factor to success that customers will get excellent support both during POC and when contract signed.
There can be other secondary drivers as well. For example, pushed sales process focusing on extensive follow-up, lead nurturing, and closing deals. Or inspiration by delivering consistent marketing content focusing on inspiring partners.
Step 7: Define the programmatic elements
Programmatic elements refer to the effort and values you will deliver to partners to help them become successful. And it also encompasses how you choose to deliver it.
The purpose of constructing programmatic elements is also to create a culture of partnership and understanding that you care about your partners and their success.
Here are a few examples of programmatic elements.
1) Education platform
If you’re into inbound marketing, most probably you know about HubSpot. And if you know more about them in detail, they have implemented this strategy perfectly.
You can create an education platform that delivers education and knowledge to partners in the form of text, video, papers, and certifications. Partners will be required to complete partner certification to certify knowledge level. And it may also be crucial to reach next levels in partnership hierarchy.
This element works because more knowledge usually leads to a more professional and quality assured customer experience of the sales process. It ensures that your partners are as good as you are. And when they are reaching leads, they are putting up a good image of your brand.
2) Development forum
For integration partners, it is important to have full access to a technology platform to create new solutions, improve, and manage current solutions. The development forum consists of manuals, APIs, technical documentation, support, and a forum where issues can be discussed in the open.
3) Lead generation platform
The idea here is to distribute the leads generated among the partners. This is because small deals are better handled by partners that have efficient sales processes to handle small deals.
Some partners will better manage the sales process and can bring higher value to the potential customers and therefore the likelihood to close the business increase. And this happens without you putting in much effort.
4) Support platforms for partners
Partners need to have full access to support manuals, instructions, videos, forums, etc. Customer support is identified as a key factor for success. It is important that the customer experience excellent support during the proof of concept phase and after-sales phase to make sure that deals are not lost.
Step 8: Define responsibilities and expectations
You and your partner are a team. Now it is time to decide who is responsible for what. Focus on the customer experience and define all activities and categorize them. The idea is to define roles clearly so everyone is on the same plane and understands what part they will be playing in the sales process.
The first step is to define activities that need to be done. Try to make all these activities granular enough so they can all be assigned to either you or the partner. And also, make sure that you define expectations. What do you expect from partners and what can they expect from you?
Now everything on the plate, you can assign responsibilities to your partners as well as your own team.
Here are a few things that your partners can expect from you.
- Deliver pre-qualified leads
- Deliver professional & knowledgeable support during pre- and post-sales process.
- Deliver education programs that help the partner to understand the possibilities.
- Provide a certification program.
- Provide a best of breed solutions.
- Create events & programs that help partners to connect and start to build better solutions that provide more value for customers.
And here are a few things that you may expect from your partners.
- Partner will help to grow the business through sales and marketing activities.
- To focus on the customer and deliver excellent solutions that deliver true value to the customer.
- To be knowledgeable and constantly evolve with the market.
- Attend events & connect with other partners with the intention to build improved and new solutions.
Step 9: Define a framework
Imagine how you categorize your friends—some are close, some are casual, then there are those whom you meet occasionally. Defining a framework is like that. It is about organizing your partner relationships.
You can start by defining partner program levels. This is only one type of organization. And there can be many, based on your own context and what is suitable for you. It is just that most partner programs have different levels. This framework helps you to identify which partners are more involved in your program.
It also works as a motivation as we talked earlier. For example, by joining the education program and getting certified the partner can achieve a higher partner status and consequently, get more benefits.
Here are a few examples of partner programs from Evolve, Accelerys, HP, and Cryptzone.
Step 10: Build internal capacities and systems
Now that you have everything strategized and planned for your partner program, it is time to make it a reality. Start by creating a list of all those tasks and infrastructure you need in order to build and start executing your partner program.
Create all marketing materials ready including brochures, videos, and educational material. Also, implement IT systems that will give technical support to your partner program. This step is essential because it will help you in the long run when your partner list grows.
Here is a list of needs you might have in each aspect of your partner program.
1) About the program—general documentation
- Partner Program Operation Plan – Resources, time, organization chart, Systems, Sales.
- Legal Agreements.
- Internal Power Point Explaining the program.
- Account manager expectations on partners.
- Internal manual for partner program.
- Information on how partner can get presales help and support.
- Information on how to manage leads and what is expected by partners.
- Partner Selection Matrix.
- Partner Program Roadmap presentation.
- Co-op fund structure.
- External Sales Power Point to explain the program.
- Partner Certificate.
- Training Certificate.
- 2-page brochure explaining the partner program.
- Webpage where the Partner Program is explained and marketed.
- All marketing material that will enable partners to sell the solutions.
- Write specifications, select and implement IT-system for a Partner Portal where partners. can log in to get access to all material.
3) Education platform
- Create a specification for an IT-system that can host the education platform.
- Select IT-system and implement it.
- Establish training and certification curricula.
- Produce training material in the form of videos, presentations, text etc.
- Create tests so partners can certify their knowledge level.
4) Development forum
- Write specifications, select and implement a development forum in the partner portal.
- Make APIs available in the forum.
- Add manuals and instructions in the forum for how to use the API.
- Add examples of how to use the API in the forum.
- Add Get Started Videos to the forum.
Apart from this, as mentioned earlier, you may need IT-systems to manage your partners. The best way, however, to do this is to integrate it into your current CRM system. And the best solution for this would be Salesforce and Microsoft Dynamics CRM.
For IT-systems to enable education management, I would recommend you to use Citrix GoToTraining, Webex, or Netexam. There are other good solutions as well like Mindflash, Docebo, Articulate, and Coursio. For support system, I often recommend Zendesk but you can also use Salesforce and Satisfaction.
Step 11: Define how to measure success
Whenever you have objectives, it is important to define the parameters that will decide whether you have achieved your objectives or not. Define the parameters of KPI (Key Performance Indicators) to measure your success.
Make sure what you define as KPIs are from the perspective of the success factors you had defined for your partners. Once you have decided it, make sure your IT support system calculates KPIs automatically.
Step 12: Develop a marketing strategy
This marketing strategy is for your partners. Use SOSTAC model for this. You can find its template here. It is clear and easy to follow.
Create a clear target audience because that’s one of the most important things your partners need to understand. Use frameworks like RACE (Reach, Act, Convert, and Engage), 5S (Sell, Speak, Serve, Save, and Sizzle), and 5P (Product, People, Place, Price, and Promotion).
Step 13: Create a partner selection strategy
You should have a clear idea about who your target audience is for partners, just like the way you have it for customers. You will be wasting time, money, and effort on partners that can’t bring value to you or to your customers.
Each new relationship is an investment and it is important that you define characteristics or attributes of the ideal channel partner required to address a particular market segment. This will help you to decide what partners you would like to invest in and build a deeper relationship with. Define how many partners you should recruit and set a target.
You can do this easily by downloading my free partner selection matrix.
Step 14: Build a focused partner organization
Beyond systems, there is the human element to building a successful partner program. It is important that the structure of any partner organization be rooted in the philosophy that members of the partner team remain connected to many different internal organizations in order to deliver desired results.
Building, maintaining and growing a healthy channel ecosystem requires input from all parts of an organization.
9 success factors for your partner reseller channel program
- Remember to keep the customer front and center: Every investment you do should, in the end, benefit the customer.
- Match your solution to the proper channel: This includes all your marketing material and information.
- Communicate often: Make sure that partners have all the information they need to become successful.
- Monitor and measure the program: There is always room for improvements.
- Resist making frequent changes: It takes at least 90 days after signed contract before you can expect to see any sales at all. Don’t change your program too often. Instead, focus on your program elements and how to deliver them even better.
- Be clear about what the partner should do: Make sure that your expectations are clear and that they are aligned with the partners’ business model.
- Support partners before, during and after the sale: With technical and sales assistance to help them grow their business.
- Monitor your competitors: Your partner will meet your competitors so make sure you keep them educated & informed.
- Launch and work with a partner council: Representing a cross-section of partners to help you to keep a finger on the pulse of your channel’s satisfaction.
6 potential failure points
- Once you have created your program you stop to improve it: A successful partner program demands constant engagement and improvements.
- Lack of clarity: Make sure that you have truly defined what you want your partners to do and that they are motivated.
- Geographic diversity: Beyond the obvious differences between mature and emerging markets, there lie governmental, financial and cultural differences. Consider these when designing a first-time channel program.
- Investment in systems and resources: Without the appropriate allocation of resources, even the best program can’t come to life. While you can outsource some areas to deliver various pieces, internal resources are still required.
- Diverse channel ecosystem: Each partner type has unique requirements, expectations, and perspectives. Be flexible with systems, programs & sales initiatives to maximize investments across a greater partner base.
- You have not signed up the right partners: The partner you have signed up fails because there is a mismatch between expectations and the partners’ business model.
Example of how I built a hugely successful partner program
Read my article - How I built a hugely successful partner program and you can too (In-depth). It's a concrete example of how I built a partner program from scratch. The partner program was so successful that over the three-and-a-half years, we recruited over 30 partners from all over the world who were instrumental in signing on over 100 of the world's biggest mobile operators.
Here are some free tools on my website which will make the process of creating a partner program easier.
Creating a partner program is not a journey from A to B. It is a continuous process that you need to evolve from time-to-time to keep it updated with the market trends. The essence, however, lies in all the 14 steps that we have discussed. Keep coming back to each of them from time-to-time and I am sure you will never be lost.
So, there you have it…14 steps to create a professional partner program. Please remember, an amazing partner program don´t stop after the 14 steps. You need to continue to improve and innovate your channel program every quarter. The market, competitors, your offering, and partners continuously innovate and you need to make sure you keep up.
Presentation Reseller Channel Partner Program
This article is based on my extremely popular SlideShare presentation on how to build a professional partner program. Check it out below.