Managing Channel Partners for Growth

Partners provide opportunities for your business to reach customers that you may not be able to reach without considerable time and expense. Partners can expand the breadth of the solution you provide by combining additional products and services needed by the customer. Partners can enhance your positioning by association with their brand reputation. Partners make a significant commitment when they agree to integrate your product or service into their offerings to their customers.

This commitment may include substantial a financial and human resource investment. For example, the partner may need to enhance systems to support your product and/or train people for sales and support services. They are also putting their reputation on the line. If your product disappoints customers, it will damage your partner’s reputation in addition to your own. Partners should be diligent in planning and managing their engagement to assure success for both.

Understand the specific commitments required by both partners and implement measures and management processes to keep the relationship working optimally. Treat your partner with respect and learn to appreciate their perspective in addition to communicating your own. Honor commitments that you make to the partner to support them in their efforts with your product or service.

Key factors to consider when deciding on a new channel partner relationship include:

  • Target customers.

There’s no point engaging a partner simply because they have a strong reputation if they don’t serve your target customers. Learn what their customer segments are, where they are, how the partner reaches them, and how many of them there are.

  • Product value added.

A partner may add services and/or other product components to produce a broader solution offering than your product alone. This increases the value of your product to the customer.

  • Business value added.

A partner may have a distribution network to reach customers that would be very costly for you to create. Partners may offer other business services like technical support or other specific business functions that you may lack in order to serve the customer fully. Different customer segments may have very different needs and buying cycles that require the unique services of a channel partner.

  • Product fit.

If your product is not important to them—a “nice to have”—don’t expect them to dedicate much energy into promoting it successfully. Ideally, your product will be a valuable addition to their product and services.

  • Channel conflict.

Determine whether you can support multiple channels into the same market. If conflict is an issue, you may be able to plan restrictions on customer segments or geographies to remove the conflict. Simplify the buying process for customers as much as possible by providing simple choices. Avoid complexity in assuring that all channel partners represent your product consistently. Having too many channels can create negative reactions from the channel partners themselves.

  • Partner commitments.

Clarify in writing commitments including sales volumes, training, support resources, marketing and promotion, and technical integration.

  • Your commitments.

Document the marketing, training, support and technology integration commitments you will make.

  • Management processes.

Agree on processes for financial, operational, and marketing and sales performance. Regular management reviews allow you to anticipate and plan for changes in the product and relationship in order to adapt to changes in the marketplace. Helping your partner anticipate changes and prepare proactively significantly increases your value to their business.

#entrepreneur #businessdevelopment #channelpartner

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