|By Beth Barach||
|November 18, 2010 10:15 AM EST||
The goal for any company is to create value for their customers. Selling through the channel can be an important sales strategy for any vendor if harnessed and prioritized correctly. While this approach can drive additional revenue and open up new sales opportunities, working in the channel can pose unique challenges as well.
Creating a symbiotic relationship between the vendor and reseller is crucial. In order to put a solid channel strategy in place, there needs to be tight integration between each of the channel partners, VARs, systems integrators, distributors, and vendors. To move that forward, here are six tips that vendors should adhere to in order to develop a fruitful union:
1. Build the right foundation
Vendor and channel partners alike must bring something new and different to the table. For instance, the vendor may have the rapport and technology the customer is looking for, while the reseller can offer the expertise and deep industry knowledge to execute on the delivery of services. Each party must bring a value to the table that the other does not.
2. Define channel benefits
When developing a channel strategy, define what the end goal is for each partner. Companies decide to partner when they feel there is an opportunity to gain additional lines of revenue. However, the responsibility lies with the vendor to institute a clearly defined model that empowers the channel partner to generate profits from the relationship and is well positioned to grow; otherwise, the partner will have no incentive to succeed.
3. Reinforce that brand reputation is at stake
Growing your channel program means you are growing your brand. As such, any channel partner walking into a customer site is representing you. They need to not only be knowledgeable and competent, but they must also have a respect for the brand. As these partners are essentially "wearing your shirt," they need to feel like they have a stake in your product and understand the benefit/value of what is being sold. You want to ensure that any channel partner you choose is committed to the relationship and to the brand image.
4. Do your homework
Quite simply - pick the right partners at the onset. Companies make the mistake of choosing several worldwide partners because of their geographic location. And these resellers are eager to sign on whether they have the expertise or not. In many cases, resellers are trying to sell so many vendor solutions that they become the "jack of all trades, master of none" - and in two years, both groups realize there has been little movement in the relationship. In order to avoid this pitfall, ensure that any partner you choose not only understands your business, but that you are getting appropriate mindshare and attention. As part of this process, vendors should consider creating a standard set of criteria that can be used each time they review potential partners. This not only helps in determining which partners to use, but it also provides a unified way to measure how each one is performing.
Each partner needs to be hungry for your business, and you need to understand what percentage of their business will be dedicated to you. If the partner has all their resources invested in another major vendor, then you may have to consider how committed they'll be to your business.
5. Ensure there is a cultural fit
Companies and sales philosophies must gel. Ask yourself these questions to decide if there is a fit: How do you treat customers? How do you handle disgruntled customers? How do you work with your end users? If your company and your reseller partner have similar answers, then the relationship has the ability to flourish. If the channel partner has a fundamentally different philosophy around how they handle customers or negotiations, no amount of effort is going to make the relationship work over time.
6. Outline rules and responsibilities of engagement
The definition of channel conflict is when channel partners have to compete against one another or the vendor's internal sales department. To avoid this, the vendor's needs should clearly outline the specific rules and responsibilities for each party in the upfront agreement. It's also important to be clear about how the relationship will be supported, such as implementing ongoing meetings and training sessions for both internal direct sales teams and the channel partners to ensure the communication lines are open. For instance, if 10 tasks have to be completed, make sure that they are divvied up and completed separately so there is no overlap in duties. Overlap creates conflict. In order to be successful, there can be a lot of input, but only one agreed upon output. If you get multiple outputs, then the process breaks down and channel conflict ensues. By taking the time to establish the rules and responsibilities at the start, you will know whether the partner has the same mindset as you and is similarly invested in the relationship.
Selling through the channel can be extremely lucrative and, if done correctly, can benefit all parties involved. Instead of rushing to establish partnerships based on immediate need or convenience, you need to plan ahead and manage the process strategically. By taking the time to know who you're partnering with, you can successfully navigate the channel and set both parties up for long-term success.
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