How to choose the right channel partner | gloo
Channel Partner Selection
Maximising your channel's performance, immediate growth requirements and future scale depend on getting the right ecosystem of partners around you. This article is for you if you're currently making or about to make a channel partnering decision on whom to select to market or sell your services, products or technologies without a structured approach.
TIP: The guide in this article can also work if you want to reevaluate an already established network of channel partners, where perhaps your network of partners have proliferated over the years, and you now need to reshape/streamline your go-to-market model.
There are multiple benefits gained from channel partnerships where a reseller, service provider, vendor, retailer or agent — partners with another organisation to market or sell your proposition. However, if you fail to align your:
- customer and product/service propositions,
- goals and objectives,
- capabilities for today and tomorrow.
then hidden dangers can jeopardise your top-and bottom-line and speed of future growth potential.
Each business has its unique mix of strengths and talents, so there will always remain an element of judgement in the decisions you have to make on who to partner with - balancing relative strengths in some areas, weighing up the differences you can leverage now and the future, and the relative deficiencies in others. So, before you even look at any deal on paper. Consider taking a structured approach to your partner selection decision making.
To offer you a guide (applied successfully multiple times in the field.) Please see below the quantitative elements to consider (Part One) and qualitative (Part Two) as the key areas to cover in your assessment. It's vital that you understand your future partner and the scale of the potential opportunity (and risks) such a relationship will provide.
Part One: Understanding the quantitative data
Reviewing the hard facts and data (through a healthy balance of past, present and future lens) is paramount and should be conducted before any qualitative exercise (Part 2). The quantitative assessment should cover areas such as:
their business's physical resources,
customer base and ideal customer profiles,
existing partnerships (and their ideal partner profiles),
For example, looking at an ideal customer profile (ICP) is the set of factors that characterise the best fit for your product or service. Your ICP is the hidden key to your company's commercial success. And to get you there, you have to align your marketing, channels, partners, and sales with your ICP.
So what is your potential partner's ICP vs yours? When looking at locations, company sizes, data management, tech-stack, and end-user needs, how do you compare? Is their potential to enter new markets and exploit the synergy benefits of an excellent match or a complementary set of ICPs?
Once you've aggregated all the data from Part One, compare and contrast the similarities and differences between you after that, and probably just as important, if not more, is the qualitative aspect of the assessment (Part 2).
Part Two: Conducting a qualitative review
Part one, information gathered the quantitative assessment, which sets the stage for a qualitative review.
Outlined below is a list of topics you should consider covering during discussion meetings with a cross-section of key stakeholders.
Before your meeting, you may wish to put together material(s) relating to these topics. Perhaps in the transparent form of a pre-prepared agenda sent in advance, which could look something like this outline below:
People resources - expertise and skills
In a market where it is unlikely that any one player has 100% of the share, there are still several ways in which you can grow - and all of these will depend heavily upon the skills, knowledge and resourcefulness of your employees. You can, for example:
· sell a wider range of products to your existing customers,
· win customers from competitors,
· move customers up-market to higher-value products,
· add perceived value to the product (and ensure customer loyalty) with expert advice and excellent service,
· sell complementary services - consultancy, tech or data management services.
Consider the following questions:
Q1. What are your sales, marketing, technical and customer service people already doing to achieve growth in these areas?
Q2. What additional resources will you need to handle the initial or future expected surge in business resulting from the intended benefits from our partnership? For example, if it were up to 3 or 4 times your present sales volume with our new partnership?
What would this mean from a capacity and capability standpoint for your existing:
Their skills and expertise?
Q3. In terms of any positive impacts resulting from scaling (fast/faster). How would you expect to acquire/develop the necessary people resources - skills and expertise?
Q4. What are the best opportunities for growth in your markets/geographical areas?
What additional resources will you need to pursue further growth opportunities?
skills and expertise (e.g. selling, marketing, technical, consulting, customer service)
How would you expect to acquire/develop these?
Business Health - planning, people and reputation
Does your business have the right kind of diet? Does it take the correct type of exercise? As we define it, business health is all about maintaining a good balance among all the variables that position your business for growth and give it the strength to withstand unforeseen setbacks.
Q4. How do you decide your long-term strategy and the direction you want your business to take?
Who is involved?
What are their roles in the process?
How do you identify and agree on the short-term performance targets for your business?
How do you monitor progress against these targets?
Development and succession
Q5. What opportunities do people have to develop their skills and expertise?
How are decisions made about who gets what training and job experience?
What happens in practice?
Q6. If you needed to replace any of the key people in your business, where would you find their successors?
How easy would that be?
Do you have any formal or informal succession plans for critical positions?
Image and reputation
Q7. How would you describe the image and reputation you attempt to maintain with customers and within the industry?
What do you pride yourself on in your business?
How do you want your customers to describe you?
How do you want other vendors or partners to describe you?
Q8. In practice, what feedback do you receive from customers and other businesses about how they experience your business?
In what ways does it match, or diverge from, your aspirations?
What do you do about it?
Gearing for growth
Q9. To grow the business, what will you have to do differently in terms of:
Management development, succession, and recruitment?
Monitoring your company image and reputation?
Easy to work with
The relationship between your firm and your prospective partner will have to be qualitatively different from the traditional supplier/customer relationship. Being easy to work with is a good thing if it helps all parties to feel more comfortable in the new relationship.
However, we expect it also to have a pay-off in harder business terms - for example, shorter lines of communication, quicker decisions.
Q10. What do you think "easy to work with" will mean in practical terms?
Q11. What will we both have to start doing, stop doing, and do differently?
There are less-measurable aspects to channel partnerships to ensure alignment before inking a formal partnership agreement. Have these questions in your back pocket before and during your initial discovery call or meeting with a potential partner.
Do you need help with selecting or reconfiguring your channel partners? Are you looking to scale and worried that one or more of your partners may not be ready to scale effectively with you? Contact us today to talk strategy or register with us and request growth ideas.
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