Channel Partners Should Drive Revenue Growth
Business executives are constantly looking for revenue growth opportunities. They often direct their focus internally to improve efficiency, train sellers, innovate products and services, or develop new marketing campaigns. These areas of focus enhance the organization’s ability to target and convert new leads and grow their relationships with existing customers, but true growth comes from expanding market share.
Many enterprises see revenue increases by forming partnerships with other successful companies that can reach new markets, add value to their services or enhance their delivery capabilities. Alexander Group can help your business establish and strengthen these mutually beneficial channel partnerships.
What Are Channel Partners?
A channel partnership is a relationship with a third party for the purpose of expanding the revenue and sales team’s capabilities. Deployed effectively, channel partners can open new markets, engage certain customer segments more effectively, and provide value-added products and services.
Channel partners earn revenue through referral fees, resale margins and by selling products or services that complement the company’s offerings. The ideal channel partnership is mutually beneficial, allowing both parties to access more customers and expand their earnings.
Channel partners can include indirect sales partners, affiliate partners, managed service providers (MSP), system integrators, value-added resellers (VAR) and others.
Channel Partners Should Drive Revenue Growth
Regardless of how large or small the channel program or the types of channel partners managed, having an indirect sales force can have a big impact on revenue growth. But indirect channels can also be complex. Optimizing the channel sales model at each stage of program development will increase channel effectiveness:
- Define Strategy: How can you accurately identify target markets, set financial objectives and create a compelling partner value proposition?
- Target and Select: What are the right types of partners for your channel strategy? How can you effectively identify and recruit them?
- Support and Enable: What is the best way to create value-added programs for your partners to foster growth and build capabilities? What parts of the sales cycle do you expect your partners to be responsible for? How can you manage channel conflict and overlap?
- Monitor and Measure: How do you continually evaluate partner capabilities and performance against financial objectives?
A well-executed channel sales program can extend market reach, add critical expertise to the sales organization and help you meet your revenue growth goals.
What Should Companies Do for Successful Channel Partnerships?
Expanding channel partnership investment returns requires a diligent, hands-on approach, but it pays dividends in the value gained from the partnerships. Businesses can improve channel partnership success by gathering information to better understand the partner mix and makeup of the channel portfolio. The right information and analysis can help with the decision of whether a partner is the right fit. Any partner analysis toolkit should include 10 regular actions:
- Engage with them face-to-face, not just at your “presidents club” trip with your top partners.
- Gather the voice of the partner using quantitative and qualitative feedback that partners might not otherwise share face-to-face or directly with you, the company.
- Quantify and benchmark your channel investment and ROI—investment in the channel vs. the revenue generated.
- Measure and benchmark partner loyalty through a loyalty index approach.
- Assess your enablement—effectiveness of the channel account manager role, partner program, lead generation, technological integration, ease of doing business, etc.
- Measure your alignment on strategy direction, rules of engagement, level of channel conflict, etc.
- Listen to the customer through a CSAT process to understand the value your partners are providing them.
- Use a data-driven approach to inform discussions on how each side is doing against expectations.
- Actively manage the partner program through small adjustments with advance notice so partners can plan their business decisions.
- Clearly articulate the value proposition by addressing the benefits to both partner revenue and margins based upon the sales and services that the partner provides.
This deeper insight allows channel leaders to optimize indirect channel effectiveness, minimize costly and unnecessary actions, and provide the insight to ultimately determine the required channel mix (direct vs. indirect) to maximize the profitability of your go-to-customer strategy.
Alexander Group Can Help You Strengthen Channel Partner Relationships
Alexander Group can help you strengthen your existing channel partnerships and help you choose new partners that will provide the most value to your business. We leverage our experience, frameworks, research and benchmarks to produce actionable recommendations to help you produce sustainable growth in revenue and profit.
Contact us today to find out how Alexander Group can help you create a world-class channel partner program.