Indirect channel programs can be a way to grow revenue and expand into new markets, but it’s not something to jump into without a clear strategy. Are you ready to start a channel program? Did you have a struggling channel program that needs a reboot? Here are 6 indicators that you are ready for a channel program.
Clear vision of what value the partner will offer – This is the ultimate starting point when evaluating channel program readiness. Each program must have a clear understanding of what value-add partners will bring to the equation. Partnering must bring something to the table that isn’t already there, or customers will not see the value of going indirect. Partners can bring services, vertical experience, additional solutions, and many other valuable assets to the equation. Make sure this is clear for your internal teams and your partners. If you cannot clearly define what partners will offer, you might not need them.
Solid partnership value proposition – With a clear understanding of the distinct benefits partners will offer it is time to create a value proposition that entices the right partners. Partners will need a well-defined reason to do business with you. It cannot simply be “we have a great product”. Chances are that the partners that make the most sense for the program will already be partnered with other companies. Getting these partners to add to their vendor roster will require the right combination of benefits. Consider starting with the basic elements that partners care about: financial impact. Starting your program with a strong financial offering will position you strongly with partners. Having the right value proposition will engage the right partners for the program.
Ideal partner profile – Determining the right partner profile can be tricky, but it is crucial and will adjust over time. What does a top performer look like? To figure this out, start by looking back at the value that partners will bring to the program. Find partners that focus on those fundamentals. Look for partners with complementary or even competitive offerings in their line-up. Take the time to put together a picture of what the ideal partner looks like. You have to know who you are looking for, and who you are not looking for. This will aid in disqualifying the partners that don’t make sense. Create the profile, test it, and over time adjust it. Having a strong partner profile will save time on partners that cannot perform, and assist in meeting the overall program goals.
Sales goal and plan for attainment – Programs must have goals. Often channel programs are created to drive revenue, which is a great goal. To get to a revenue goal start by breaking it down and back into it.
- Take the revenue goal and divide it by the revenue you expect per partner. That will give the number of performing partners you will need to hit the goal.
- Now factor in partner ramp time (training, recruitment, onboarding), attrition (the number of partners that will churn out).
- Determine a percentage for the nonperforming partners.
Factoring in these three points across the revenue goal will provide a more realistic view of what it will take to hit that revenue number.
Realistic idea of resources – A partner program will take people and financial resources. It is critical to assess what it will take to run a channel program upfront and to have executive sponsorship for the allocation of the resources needed. It will take people to onboard, manage, and support partners, and technology for communications and opportunity management (at a minimum). These things must be on the radar early or the program will have a hard time getting off the ground and scaling. Look at the channel goals and plan resources based on the numbers needed to attain the goals. Starting with the end in mind will aid in determining a realistic allocation of resources.
Way to measure success – Success will likely have something to do with the goals that were set, but there is a bigger picture as well. Consider measuring things beyond revenue attainment. Partner retention, onboarding time, new markets, partner satisfaction, and overall relationships can be great indicators of program success. If this list is healthy it is likely that revenue is also healthy. Having an eye on the big picture will ensure the sustainability of the program.
While no two channel programs are exactly the same, all programs require forethought and planning. If you cannot address each of these 6 indicators chances are your company is not yet ready for a channel program. If you walk away from this post feeling that your company is set and has detailed ways to address each of these indicators—or has the resources to address them before you get started—you are well on your way to a successful channel program.