Selecting Channel Partners

01/09/2020 1 By indiafreenotes

Channel partnerships may have changed in recent years, but they remain as important as ever. Previously, the partner model was centred on resale, margins and collecting upfront revenue, but as the technology sector has transitioned to a more service-based industry, the partner channel has followed suit. Nowadays, it is not enough for channel partners to offer good technology, they must also provide responsiveness, flexibility and strategic enablement. Of course, the potential benefits of a modern channel partnership depend largely on who you choose to partner with, which is why this decision is proving so important for businesses across all industry sectors.

Channel partners are great for business; they grow both the company and brand allowing you to know that working together is driving increased profits and even more customers to the company.

Criteria for selecting the right channel partner

  1. Market Focus

 Determine your potential partners’ specific target markets, whether they are based on geographic considerations or business type. Discover their current selling and networking activity. Is their existing customer base demanding better, more advanced solutions? Does their existing customer base suit your business in terms of size, location and application?

  1. Target Market

Look at the channel partner’s target market, their focus, their customer base and their marketing strategy. What experience do they have, what successes? How knowledgeable are they about their market and competition?

  1. Business Stability

How stable and secure is the channel’s business model? Consider factors like size, viability, suitability for target market, management competency, their profitability and growth.

  1. Financial Security Soundness and Structure

Understand the the channel partner’s financial position. Request information about their revenue, size, growth, gross margin and profit, balance sheets and cash flow, are they a private or public company, how is their business financed?

  1. Does their process and practice fit with yours?

Will partnering with you create a ‘solution conflict’ potentially reducing maintenance revenue, territory size or services? Are you able to provide new business opportunities, services and competitive advantage? Will your solution allow them to sell more and provide maximum potential revenue for you?

  1. Skills and Experience

Does the channel have the skills and experience to sell and support your solutions? What is their sales experience, what might your solutions be as a proportion of their total revenue? What specialist skills can they offer? Who are their employees, their background and experience? What is their SE capability, their marketing strategy, their staffing resource and their contact level for their customers and prospects? Do they have the staffing capability for field sales, telesales marketing etc? How do they measure progress and customer satisfaction?

  1. Technical Expertise

What specialist resources does the channel partner have? Do they have sufficient training plans, experience in network infrastructure, experience in presenting/demonstrations, knowledge of your implementation issues, the ability to be self-sufficient technically, a customer service mentality?

  1. Who else are they resellers for?

What is the channel’s track record, and their experiences, (good and bad) are they locked-in to any specific agreements?

  1. What Knowledge do they have of you?

Sales, Telesales and Marketing?

  1. What is their Partnership mentality?

How committed is the channel to partner with you? Are they willing to dedicate staff to your business? Do they have lead generation plans and lead follow-up processes? Are they prepared to invest in demo-capability and training? Are they focused on a long-term partnership, willing to work together to develop a partnership plan and to commit to minimum targets ?

Remember that unlike direct selling, the sales relationship between you as the vendor and your channel starts after the sale. Finding the right partner is definitely the first critical step. After that the key to building a successful partner relationship will depend on the education and support provided by the vendor.

Tips for Successful Channel Partner Selection

  1. Knowledge of You

Ask them how they know you, where they’ve seen you before and see if they understand what it is you actually offer.

  1. Other Resellers

Find out if they have any long term agreements with other companies, ask about the channel’s track record and what their experiences are, both good and bad. Try to put together the image they are trying to portrait by piecing together their responses.

  1. Partnership Mentality

What’s the commitment level to work with this partnership? See what their plans are with dedicated staff, sources of lead generation, lead follow up plans, investment into demo’s and training, is this going to be a long term relationship and are there any plans to commit to minimum targets.

  1. Technical

Does the partner have the ability to implement, train and be self-sufficient with the technicals? Are they able to offer presentations and demonstrations to a high standard? Sometimes if the partnership is solely based on a online basis with the product being SaaS etc it would be wise to have everything set up for the partner limiting any potential barriers along the way.

  1. Skills and Experience?

When it comes to selling your service/product what sort of skills does the channel have that can be used in conjunction with the offer? What are their specialist skills and what sort of background do their employees have? Are the team capable of effective telesales and field sales processes or is this something that extra training will be needed for?

  1. Fit and Purpose

Partnering can be great but sometimes you need to understand if it’s a worthwhile idea. Will territories, revenue or services be in conflict if the partnership was put in place? Will there be new business opportunities that wouldn’t have existed before? Will the channel be able to sell more and increase revenue due to the new market/customer base?

  1. Market Focus

Find out the channels specific targets such as geographic focus and business type. See what sort of network they have in place and determine if the size and location suits your business.

  1. Target Market

Consider the channels target market and see what sort of successes and failures they’ve had along the way. What is their focus and strategy to get ahead in their market are they aiming to be number 1 or just to grab some market share? What is their knowledge and expertise?

  1. Financials

Understand the channels financial position, are they growing? What’s their profit and loss? Cash flow, size, revenue and are they a public or private company.

  1. Stability

Does the channel have a stable and secure business model? Consider their market and viability alongside offering and financials to understand what their position currently is.

Finding the right partners is critical right from the start as generally speaking it’s a long term strategy that if not aligned correctly right from first contact you’ll find it difficult to get moving.

The relationship starts after the sale when it comes to channel partners so questions like above are vital for success.