Here’s a question to think about before you invest in a new channel partner: who else are they working with? A prospective partner’s current vendor list can provide some interesting insight into whether or not the two of you will make a profitable match.
Are the other vendors complementary to your offering or are they competitors?
If they’re competitors, why does the partner want to take you on? If they are complementary, how complementary are they to you and what is that complementary sales cycle? Is that other technology necessary in order to sell your technologies? Or are they not competitive with your offering at all, and could be sold into the same account with you? You need to understand where the various other vendors fall on the spectrum that ranges from unrelated to complementary to competitors.
No matter where they fall on that spectrum, there are challenges.
If the prospective partner is selling your competitors, why are they considering at you? If they are already successful with your competitors, why would they need another vendor coming in? Is it because they’re seeing decreased sales with that other vendor? If they’re interested in bringing on a competitor, there’s something wrong with that other relationship. Remember that your prospective channel partner isn’t just determining if you are a fit for them, but you are also considering if they are a fit for you.
Where will the Channel Partner’s loyalties lie?
It may be that the only problem with the relationship is that the partner needs your offering to better differentiate itself. That could be a positive, but if that complementary vendor perhaps has deeper and stronger relationships into this partner, where will the partner’s loyalties lie? If that vendor is coming down on the partner, will the partner insert them into deals you already have in play with their customers?
There’s lots to think about, and due diligence on a prospective partner isn’t a boiler plate process. The more complete view of the prospective channel partner you have, the better able you will be to select ones that have the highest probability of channel management success.