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Do you want sell through a channel partner? Or build a program for recruiting and managing multiple channel partners? Let me share with you six steps for finding and managing the perfect channel partner.

  • First, understand that a channel can refer, or sell, or distribute, or implement, your product or service
  • Focus on different types of channels at each stage of market maturity. I’ll go into this shortly, but for example, in the early market we want direct channel, that is our own salespeople, whereas later in the maturity of the market, we want to be selling through third party channels. I’ll come to that later
  • Create momentum for your channel to serve. Don’t expect them to create momentum for you. That holds true regardless of the maturity of the channel
  • Recruit for a good fit, don’t recruit them and then try to create a fit afterwards
  • Drive the planning, don’t just receive it. That is, don’t just mandate that they have to build a plan, work with them on the planning
  • And in the high growth periods, tornado and ultimately my main street markets, consider requiring nominated resources who are trained and certified. Let me show you the five articles I used to draw those conclusions – three of them are excellent.

The first article is from Technopedia. It includes a good 101 definition, and then they move into describing some well-known channel partner types. I’m not sure I agree with the second part of it, but the beginning is a good 101.

Sisco blog by Dawn Brister, offers us a quick explanation of why she thinks we often assume we have a common language when we don’t. She continues to then give a description of what a channel partner really is, which is drawn from Wikipedia. It’s actually quite a good definition and she explains the way they manage their channels at Sisco. I’m going to argue that there’s a couple of bits missing from it later. It’s a handy article, and it’s a good explanation of why Sisco requires their channel partners to be certified, because it helps ensure that Sisco implementations go really well for the client, and they also don’t become problems that Sisco then has to fix later.

We then move on to Business Dictionary, and a very, very basic description of a channel partner. Don’t bother.

The Fallacy of Channels; this is a cracking article. Mike Suster is a VC and he goes on to explain why he has so many investees come to him and expect their channels to help them grow. It’s well written, it’s relevant and the fundamental message is don’t expect a channel to make your market for you, only to serve it once you have created it – you still need to do your own selling. Excellent article.

As is the fifth article, which I’ve included simply because it’s been shared a lot from Entrepreneur.com. It’s author is Renee Yeager. It’s another good article. Basically, look for partners that are a DNA fit. Important point. Build relationships with them, equip the partners for success and make sure that you can scale along with the opportunities that they’ve created.

I’ve just explained five articles, three of which I think are excellent. I’ll give you my own spin on this shortly, but let me first honour what those five articles appear to be saying. A channel sells or distributes your product or service; they often have to be trained and certified; don’t expect a channel to create your momentum for you, only to serve the momentum that you create; and look for a good fit, don’t recruit and then try to create the fit.

Now, I’m going to recommend you read the Sisco article, the one from Mark Suster and the one by Renee Yeager.

  • Mark’s first. He’s a VC. Why you don’t always need a channel.
  • Then Dawn Brister from Sisco, the structure of channel relationships.
  • Then Renee Yeager, she’s a consultant, look for a good fit and invest in their success.

Mostly I agree with their conclusions. But there are a few important pieces missing – referrals are missing, direct sales are missing, and we haven’t quite explained why channels aren’t always a great idea. Let me explain further.

  • Firstly, we need to add some channel types here:
  • Referrals; even though they’re not selling for you, they are an important channel. – Direct sales people; that is your own salespeople – they’re a channel too.
  • Those who service and install or evolve your solution. Again, they’re channels.

Next we need to understand market maturity. Now I’ve done lots of shows on this so I’m not going to bore you to death on the detail of it, but let me give you the essence of it. Jeffrey Moore, author of Crossing the Chasm and Inside the Tornado, reminded us that market maturity dictates a different strategy, that is, we need to build a strategy that reflects what the market’s ready for. In the early market, we need to sell directly. We do need partners, but they’re probably solution collaborators and we certainly need referrals to take me to other early adopters. When we’re in the chasm and we’re trying to get into the bowling alley, it’s pretty much the same set – direct, solution collaborators and referrals. As the market moves into hyper-growth period, we need channels that can sell and distribute for us. Once we reach main street, we really need a direct sales force again. Why? Because the channel’s starting to leave us and some of our bigger customers are insisting that they buy from us directly – and we don’t need to bundle anymore. So lots of reasons why direct sales force makes sense. Again, once we reach end of life, we’re probably looking to find an OEM, to wrap our technology into and get out of the market altogether.

Mike Suster’s point still holds; that is, third party channels will serve demand, not create it. They need to make money, so we certainly need to incent them, but also help them focus for their own good. Channel partners will often compete over the same deal, and while they may not compromise your margins, they’ll certainly compromise their own. So for their own good, we need to fence them off a little bit through planning. That leads into the planning; vendors usually require their partners to submit a plan and frankly, that’s not good enough. We actually need to do the planning with them. To shape their strategy to a specific best fit target market for that particular market. To influence their choice of tactics to choose well and to leverage campaigns, and to make sure that they have a plan that we can then use to guide the relationship with them.

That leads us to the six steps:

  • Understand that a channel refers or sells, distributes, or implements your product or service
  • Focus on different types of channels at each stage of the market; Maturity – in the early days we need direct solution collaborators; Chasm – again we need direct selling, solution collaborators and referrals; Tornado Mode – we need partners that can sell and distribute, which is where most of these articles are coming from. Finally when we’re in Main Street – we need to go direct again; and end of life – we need an OEM.
  • Create momentum for your channel to serve, don’t expect them to create your momentum.
  • Recruit for a good fit. So often I see companies who recruit a channel partner and then try and get them to fit. It just doesn’t work. It’s like marriage. Find the ideal partner and then love him or her to death. Don’t try and change them.
  • Drive the planning, don’t just receive it – you need to do joint planning.
  • Finally, in the tornado or main street markets, consider requiring nominated resources from the partner to get trained and certified to ensure the quality of your deliverables to your end market.

Well that’s it for this week. If you enjoyed this show, then the odds are very good that you’ll enjoy our other shows. Subscribe at either align.me/blog or youtube.com/alignmeb2b and we’ll send you a notification every week when the new show comes out. We publish every Thursday afternoon Australian time.

Next request, I referred to joint planning in today’s show. Now, if you haven’t already used funnel planning I really encourage you to do it. Go to funnelplan.com and put your name down on a list there. The product won’t be released until April, 2016. If you’re watching this show before April, 2016, then it will be the waiting list. After April 2016, you’ll be able to get the product right there. Pop your name down and we’ll get you a copy of Funnel Plan. You can start off with a free plan. A lot of what I’ve described that vendors should be doing with their partners, you can do in the free version of the plan. You’ll find enhanced functionality can be found beyond the free plan, however, I would certainly start with the free plan, build your joint plan together, and use that to guide your ongoing dialogue.

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