Channel Marketing – 50%+ of the Partners You Sign Will Fail
Companies can waste a lot of time and expense in signing up partners who aren’t going to be effective. In order to have the best results, companies should only sign up partners who are *qualified*. The definition of qualified varies for each situation, but the following best practices can be applied universally:
- Identify where the product is on the Technology Lifecycle
- Understand the target customer compelling reason to buy
- Identify the types of Partners who have access to your target customer – Whole Product
- Document Ideal Partner Profile – Segmentation
- Only sign partners who are qualified
First question to answer – Where is your product on the Technology Adoption Life Cycle? Innovators, Early Adopters, Early Majority, Late Majority or Laggards. You must know this because the foundation for how you build a channel is based upon who your customers are. If you’re in the Early Market (Innovators, Early Adopters), it’s likely that your best distribution channel is going to be a direct sales team. Why? Because early market cost of sales is too high for channels to invest. It takes too much time to close these Early Market customers and Channel Partners won’t take that time as a market hasn’t been established.
If your products are in the Mainstream Market (Early Majority, late Majority or Laggards), this is the sweet spot for channels. Why? There’s a defined market with many customers, there are reference customers, there are major benefits to the product, there’s a documented compelling reason to buy and there’s acceptance.
So, once you understand the life cycle stage, next step is to document the target customer and their compelling reason to buy. You need to understand this so that you can start to think through how partners will add value and help you achieve your compelling reason to buy. This is typically referred to as Whole Product. So, what is it that the Partner will do to help you achieve your compelling reason to buy? Is it additional software/hardware/service, training/support, is it expertise in a particular vertical, etc? This needs to be thought through. There are many books on this topic and many consultants who can help develop a value proposition that is unique and differentiated and can help you achieve your compelling reason to buy. Add link to chasm group.
Once you understand who the target customer is, and their compelling reason to buy, it becomes easier to identify the types of partners that have access to the target market.
Once you understand the type of partners, then you can figure out the ideal partner profile – what attributes will make a partner effective? Is it the size of their sales team, is it their experience in closing deals in your target customer, is it their willingness to invest in marketing programs, is it their customer base, etc. You need to figure this out and document it so that you create a profile of your ideal target partner.
Once you have that profile, you can then start to recruit partners who meet that profile. Create a model that is a spreadsheet with the weighted attributes you desire and screen each partner against those attributes. Sign up only qualified partners. If you only sign partners who meet the ideal partner profile, you will optimize the effectiveness of your program by spending time and money on enabling only qualified partners. Enabling partners is expensive and if you spend the time on those partners you know are going to b productive for you, you win in the long run.
Was this helpful? What are your experiences with channel selection? Comments and questions are welcome.