By Ray Mascola
When you decide to develop a channel strategy, you are seeking to extend market reach, drive productivity, lower sales costs, create incremental revenue and provide customers with a complete package. By developing sales through channel partners and strategic alliances, you can reach more customers and sell more products.
However, as your company grows, you must think through your goals for a channel strategy and understand the impact on your company before moving forward.
Strategic alliances can be very powerful contributors to growth.
Your channel partner strategy must be in line with your overall business strategy and coincide with its unique value proposition. To develop a partner strategy, think how it can extend to solve other market needs. With this market planning in place, you can then identify the best companies in your target markets to develop a partner growth strategy.
Below is an opportunity-challenge matrix to use as a checklist when developing a channel partner strategy. Channel partner strategies must carefully identify related business opportunities, agree on the mutual benefits and then identify and resolve challenges as the partners negotiate a winning partnership arrangement.
Benefits to selling through partners include the ability to provide new customers with a complete package to meet their needs; increased capability to integrate new products for new markets; increased revenues through extended market reach; lower cost of doing business; reduced direct customer support costs; and the ability to meet target customers' business requirements.
There are challenges, as well: cost and time to recruit partners; gaining and holding partner mindshare; developing support infrastructure; delivering sales tools to partners; less control over the sales process; managing partner and vendor sales team activities and compensation; and agreement on forecasting process.
Once the reasons for pursuing a partner are defined, look for the right partner. Some sources to identify partners may be from within your own industry, from existing customers and suppliers, and through industry networks.
Some questions to answer when targeting partners: Does the partnership create expansion into desired new markets? Is your company's credibility enhanced as a result of this alliance? Does the partnership improve your competitive position? Is the company acquiring new and valu- able technology? Is there a compatibility in product life cycle of each company? Is the path to revenue for each company clear?
Identify the resources that each partner will commit to meet the objectives of the alliance. This includes a specific understanding of the level of management, financial, legal, technological and infrastructure resources that each partner commits to make the alliance work.
An example of infrastructure impact comes from one growing company that just landed a strategic alliance with a giant in their market. That is the good news. The challenge is that this small company now must cope with major infrastructure issues to support the 400-plus sales force of its new partner. Each company must understand the breadth and depth of the support needed, and expected, to ensure a successful partnership.
Finally, both companies must define a joint marketing strategy and marketing communications strategy, including the strategy for optimum contact with targeted customers, and the roles and responsibilities of the sales strategy and sales engagement playbook.
All partnering companies must continually be aware that their combined product has been created to offer a higher value to their targeted customers.
Key takeaways for a successful partnership include understanding how your partner strategy supports your overall business strategy; agreeing on objectives, resource commitments and market strategy; establishing an implementation plan; agreeing on a plan to manage success criteria; defining a monitoring process to regularly assess performance; and creating a win-win strategy that defines acceptable tradeoffs.
Ray Mascola is a senior business development professional with technology-based consultative selling experience. He can be reached at [email protected].
When you decide to develop a channel strategy, you are seeking to extend market reach, drive productivity, lower sales costs, create incremental revenue and provide customers with a complete package. By developing sales through channel partners and strategic alliances, you can reach more customers and sell more products.
However, as your company grows, you must think through your goals for a channel strategy and understand the impact on your company before moving forward.
Strategic alliances can be very powerful contributors to growth.
Your channel partner strategy must be in line with your overall business strategy and coincide with its unique value proposition. To develop a partner strategy, think how it can extend to solve other market needs. With this market planning in place, you can then identify the best companies in your target markets to develop a partner growth strategy.
Below is an opportunity-challenge matrix to use as a checklist when developing a channel partner strategy. Channel partner strategies must carefully identify related business opportunities, agree on the mutual benefits and then identify and resolve challenges as the partners negotiate a winning partnership arrangement.
Benefits to selling through partners include the ability to provide new customers with a complete package to meet their needs; increased capability to integrate new products for new markets; increased revenues through extended market reach; lower cost of doing business; reduced direct customer support costs; and the ability to meet target customers' business requirements.
There are challenges, as well: cost and time to recruit partners; gaining and holding partner mindshare; developing support infrastructure; delivering sales tools to partners; less control over the sales process; managing partner and vendor sales team activities and compensation; and agreement on forecasting process.
Once the reasons for pursuing a partner are defined, look for the right partner. Some sources to identify partners may be from within your own industry, from existing customers and suppliers, and through industry networks.
Some questions to answer when targeting partners: Does the partnership create expansion into desired new markets? Is your company's credibility enhanced as a result of this alliance? Does the partnership improve your competitive position? Is the company acquiring new and valu- able technology? Is there a compatibility in product life cycle of each company? Is the path to revenue for each company clear?
Identify the resources that each partner will commit to meet the objectives of the alliance. This includes a specific understanding of the level of management, financial, legal, technological and infrastructure resources that each partner commits to make the alliance work.
An example of infrastructure impact comes from one growing company that just landed a strategic alliance with a giant in their market. That is the good news. The challenge is that this small company now must cope with major infrastructure issues to support the 400-plus sales force of its new partner. Each company must understand the breadth and depth of the support needed, and expected, to ensure a successful partnership.
Finally, both companies must define a joint marketing strategy and marketing communications strategy, including the strategy for optimum contact with targeted customers, and the roles and responsibilities of the sales strategy and sales engagement playbook.
All partnering companies must continually be aware that their combined product has been created to offer a higher value to their targeted customers.
Key takeaways for a successful partnership include understanding how your partner strategy supports your overall business strategy; agreeing on objectives, resource commitments and market strategy; establishing an implementation plan; agreeing on a plan to manage success criteria; defining a monitoring process to regularly assess performance; and creating a win-win strategy that defines acceptable tradeoffs.
Ray Mascola is a senior business development professional with technology-based consultative selling experience. He can be reached at [email protected].