What is a channel partner program?
Daniel Nilsson, a growth, sales and marketing expert explains what is a channel partner program
I am often asked to come up with a definition of a channel partner program. These queries usually come from people who have never worked with channel partners before, but have realised they must implement the fail-safe 14-step strategy to successfully take their product or service to new markets via channel partners.
As a Growth, Sales, Marketing and Digitisation Strategist, I have designed several successful channel partner programs over the years, and recommend them as an extremely rewarding way to expand a mature product or solution into new markets.
Over the years, I’ve thought a lot about what would be the best definition of a channel partner program within a B2B context. There are several definitions floating about on the internet, but none of them accurately cover every facet of a B2B channel partner program.
I finally settled on one. No matter if you are building a pure channel sales program or a collaborative partner program, this definition is a good fit.
Definition of a channel partner program
“A Channel Partner Program is a strategy to motivate and engage channel partners to create more value for customers.”
The key words and phrases here are “strategy” and “our customers”.
Importance of strategy
When we create a channel partner program, we draw up the framework and guiding principles for how the partner program should work. Defining the strategy in this way helps all stakeholders understand in which direction they should move.
Channel partner programs have several stakeholders. Here are some examples of different partners.
- Tech integration partners: You give these partners a platform to create new features and functions for your end customers. The incentive for them is your existing customer base. The App stores run by Apple and Google are a good example of this. Both tech giants have an operating system and allow developers to create new apps for their platforms. These apps deliver a lot of value (and joy) to Apple’s and Google’s end customers.
- Channel resellers: The ideal reseller helps you roll out your product or service in a location you are not familiar with, such as another country. These partners understand local laws, regulations and culture and help you ensure that your product or solution makes a smooth entry into the market and gradually establishes itself. The advantage of having local partners is that they are seen as trustworthy by your end customers. You cannot evoke that level of trust because you don’t have a presence in that market yet.
- System integrators: These partners build more value by combining your product or service with other solutions. This could be complex solutions such as those designed for the Internet of Things, where different companies combine different technologies and operating networks to build better products and solutions for their common customers.
Given the fact that there can be several stakeholders – sometimes businesses have hundreds of channel partners – a well-structured strategy ensures that everyone is on the same page and is working in exactly the same way to create value for the end customer.
Strategy must create value for customers
The best channel partners and the most successful are those who look at your customers as their customers too. This is why, in the definition above, I emphasised on “customers.”
A well-designed channel partner program will ALWAYS deliver value to this end customer. Use this Strategyzer Value Proposition Canvas Designer to better understand what this value is. Read more about this tool by clicking here.
While you are about it, it’s important to understand that your end customers generally don't care about you, your amazing team and when your company was created. Customers care about themselves and about the value and outcome that your product or service can give them. This is why it's extremely important to create strong value propositions when you design a partner program. In the end, the objective of your partner program is to increase sales, right? That won’t happen if your end customer is not convinced that you have something exceptional to offer them.
The strategy of a channel partner program must direct all stakeholders towards creating value for the end customer.
Who uses Channel Partner Programs?
Several businesses all over the world – from multi-billion dollar companies to smaller businesses use channel partners to sell their products and services worldwide. These include Microsoft, VMWare, Oracle, eBay, Apple, SAP, IBM and Cisco.
What are the components of a great Channel Partner Program?
Companies design several resources and put in place incentives to attract and keep their channel partners. The components of a well-designed channel partner program will include the obvious ones such as a revenue-sharing arrangements as well as the following:
- Amazing sales and marketing tools: Your partners are given top-notch professional sales tools to take to your end customer. To see sales soar, ensure that these tools are as good as the tools you give your internal sales team. Read more about channel sales processes and sales tools in my detailed guide: How to Design a Sales Process for B2B Sales.
- Education and training programs: Don’t we all love to learn while we earn? Education programs where your partners can learn valuable practical skills are a great component of your channel partner program. However, though these programs are extremely rewarding in the long run, they are not easy to create and require considerable effort. So if you take the trouble to design them, ensure you do it well.
- Certifications: Software and hardware solutions that require the partner to get involved with implementation and maintenance can be a risk for your business if they don’t work well, and can also create problems for future sales. To prevent this from happening, ensure that your channel partners completely understand your product or solution and are well equipped to troubleshoot. You could motivate your channel partners in this regard by creating hardware and software certification programs that they can participate in. The certification must be interesting as well as challenging so that participants get a sense of pride when they complete the exercise successfully. The partner views certification programs as an investment in their growth. This motivates them to work more on your specific solutions.
- Excellent sales support: When your internal sales team has problems of any kind, they easily run over to developers, engineers or other colleagues in your office to help them solve these problems. Any good channel partner program will ensure your channel partners have the same easy access to your qualified staff.
- Lead platform: In some channel partner programs, you distribute leads to partners to keep them engaged and interested. This can be done in many different ways depending on the set up. You could have excel sheets, emails or an internal messaging service to send leads out. No matter what system you use, make sure you follow up on these leads with your partners.
- Events: Getting all your partners together at an event is a good way to educate and motivate them. At such platforms, partners can exchange ideas and have insightful discussions, which are valuable for the sales process.
Design your own Channel Partner Program with these guides
A successful channel partner program takes time and effort to create. You will need to heavily invest resources in your channel partner and you won’t know if that investment has paid off until nearly a year later.
I have made it easier for you with a couple of resources I have drafted over the years.
In 2013, I developed the 14 steps to create a channel partner program. The system is designed to be a good fit no matter what type of partner program you want to create. You can use it to design an extensive program to increase sales via channel partners or you can use it to build advanced relationships and create an ecosystem that delivers more value to customers.
The 14-steps system has been used by companies such as Canon, Tele2 and a lot of small growing companies.
In 2015, I decided it was time to prove that a well-designed channel partner program can really be effective. At the time I was working for Appland. The partner program I created was so successful that over the next 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 as clients. You can read my article where I explain in detail how we did it –How I built a hugely successful channel partner program and you can too (In-depth).
If you want to dig deeper I also recommend that you read Channel Partner Programs & Channel Sales: 4 critical elements of success, that define four elements that are very important when you define your strategy.
Write to me
I hope that my definition of a channel partner program helps you to better understand what a partner program is and how it helps companies to sell better and deliver more value to their customers. If you have any comments, questions or want to share your insights, write to me at firstname.lastname@example.org
This article was originally published at www.daniel-one.com/blog/defintion-channel-partner-program