The framework was created as a result of Channel Partnership’s extensive experience in helping companies with ‘go to market’ business strategy and execution. The company says that whilst indirect or channel sales are an important route-to-market for many B2B technology companies, many strategies fail to deliver because they are poorly executed.
The company suggests the most critical aspects of building a successful indirect channel is for vendors to deliver a compelling proposition that shows how they will create value and return on investment for their partners, based on a thorough understanding of those partners’ business drivers and challenges.
The framework falls under eight key headings:
1. End-customer benefit – firstly, vendors need to be able to clearly articulate the value proposition for end-customers and ensure it is relevant to their partners’ target market. Unless the partner is convinced of the benefit to customers they’re unlikely to believe they’ll ever make money selling the product.
2. Competitive Advantage – vendors need to communicate upfront the competitive advantage they have over other companies offering similar products. Partners will do their research, so vendors need to be able to articulate their competitive differentials clearly and not avoid the question of competition.
3. Commercially Attractive – clearly the deal must be commercially attractive for the partners, who will need to be confident they will make money and a return on investment. Vendors need to present not only the margin, but a full ROI picture, including any additional costs such as accreditation training, purchasing demo equipment or marketing collateral.
4. Sales & Marketing Support – to ensure a successful partnership, vendors need to share their knowledge about how to market and sell their products and provide effective training tools and support materials including collateral and campaign templates. After all, the vendor should understand better than anyone what customer problems the product addresses and what it takes to make sales. Research from The Channel Partnership and The Leadership Foundation, ‘What Channels Need to Succeed,’ found that 59% of channel sales execs believed that better market intelligence from vendors would have a high impact on sales.
5. Business value-add – vendors must demonstrate they understand their partner’s business model by identifying and articulating the strategic value that may come from selling their product, outside of the margin the partner will make, e.g. will it enable them to tap into emerging markets or drive increased sales of the partner’s core products and services?
6. Peace of Mind – any new vendor relationship represents a risk for a partner and unless the perceived risks are addressed upfront then it’s unlikely the partner will commit wholeheartedly. Vendors need to provide certifications, testimonials, case studies, service level agreements etc upfront to ensure the partner is confident they will have happy, satisfied customers as a result of selling the product.
7. Future Proofing – as the ICT Industry is so fast-moving, any reseller will be concerned about future-proofing their business. Vendors need to spend some time communicating a vision of what the future may be like in a few years’ time and what their strategy is for being relevant in that future, to reassure the partner that they won’t be investing in a vendor with a limited future.
8. Ease of Doing Business – in many mature sectors ease of doing business is a key decision criteria for partners. A recent PartnerPath survey found almost 50% of vendors’ highlighted ‘ease of doing business’ as their top priority for 2012. Vendors need to reassure the partner they have in place the necessary operational processes, systems and support teams to ensure an efficient, hassle-free experience.
Phil Brown, director at The Channel Partnership says: “Our experience has shown that many vendor and service providers’ partner propositions are wafer-thin and fail to understand the needs of their partners, beyond offering them a margin to sell what the vendor believes is a great product.
“Our framework offers a different approach – a clearly defined proposition, based on elements such as the commercial framework, the infrastructure, the incentive programme and the go-to-market tool kits – which we believe should be the starting point for designing a robust partner programme that will deliver the best results for everyone involved.”
“These eight pillars are not rocket science and the concerns of any potential partner will be fairly predictable. Yet many vendors still do a poor job of really engaging their partners, which maybe why so many have a high proportion of inactive partners. Creating a successful partner channel requires commitment, application, investment and initiative and taking the time to build a compelling partner proposition at the start using this framework will reap its rewards in the long term.”