Channel marketing: the importance of partners

The first part of this Tech Channel Marketing blog looked at Channel transformation and the changes required in the tech sector to focus more on strategic initiatives. This week, we examine the types of Channel partner in the market place, the skills required to make a good partner and how to find the right partners for your specific Channel strategy.

The changing face of Channel partners

Your Channel strategy must be aligned with the objectives of the business. As with any marketing project, the buy-in of the senior leadership team is essential before you start. You need to understand their objectives and desired outcomes, then build that into your marketing strategy and deliver it through your Channel partners. 

The summary below is a broad overview only of the most common types of Channel partners in the tech sector and there are often multiple cross-overs.

Reseller

Traditionally, resellers have simply taken products and sold them on, usually in exchange for a rebate from the vendor based on the volume sold. The reseller role is changing as many tech companies have moved away from physical products and hardware toward a SaaS model. They no longer just sell one end-to-end solution, so many resellers are becoming Value Added Resellers (VARs) who provide additional services such as integration, maintenance or service support.

Managed Service Provider (MSP)

An MSP maintains technology in exchange for a recurring fee, providing services such as maintenance, help-desk or installation. The main difference between a VAR and an MSP is the length of the contract: VARs tend to deal with more transactional, one-off purchases whereas MSPs usually offer longer-term service agreements.

Systems integrator

Systems integrators are often more consultative than MSPs, advising which technology an organisation should choose and then supporting them through the design and deployment process.

Distributor

Distributors are the link in the chain between the vendor and other Channel partners. Given the scale of their networks, they are often the quickest route to growth in a partner programme and can offer additional services including training, licensing or even financing.

Independent Software Vendor (ISV)

ISVs are companies that develop and sell software. Their Channel position often means that large platform providers such as Apple, Microsoft or Salesforce will partner with them to develop applications for their platforms, enhancing their market appeal.

Alliance partners

Alliance partners encompass non-competitive vendors who offer complementary products and services. You might choose to go to market jointly with them to leverage scale or take advantage of up-sell and cross-sell opportunities in new markets.

What skills make a great Channel partner?

The ideal Channel marketer is almost a hybrid of a campaign B2B marketer and  a business developer, using the specialist talent of a campaign marketer with the ability to successfully execute the campaign.

The ability to work at all levels of an organisation – you will be discussing strategic objectives with CEOs, sales directors and marketing directors one day, then talking to and training field sales teams the next.

Efficient multitasker - with so many relationships to manage, meetings to attend and active campaigns, Channel marketing is a real juggling act, so you need to be flexible and adaptable.

Great motivator - you have to be driven and enthusiastic as you’ll be promoting your strategy internally, selling your vendor to your partners and training sales teams within the partner sites.

Tenacious and resilient - you’ll be challenged by potential opportunities with either prospective partners or internally with stakeholders and will have to try and open a lot of closed doors.

Commercially aware - you’ll need to be able to understand the commercial objectives of the business. It’s no longer enough to create market development funds (MDFs) because accountability is now a key part of any campaign. A good partner needs to be able to track, measure and analyse return on investment.

Finding your right partner(s)

There will be a number of criteria for choosing the most appropriate Channel partner but the reference point should be the strategic objective for your partner programme, which might be growing scale, up-selling services to existing clients or even growing brand awareness.

There is no 'one size fits all' partner profile but the ideal Channel partner should be seen as an extension of your business, as well as your brand, with the capability to create opportunities and serve your customers.

If your Channel marketing strategy is clear and simple for everyone to understand, you can identify partners who bring high productivity to your business and in turn, greater revenue.

There are no set rules about how many Channel partners you should have. The rule of thumb for finding the right mix of partners should be the 80:20 principle, where 80% of your sales or revenue comes from 20% of your partners. You are far more likely to succeed in Channel marketing if you focus your resources, support and incentives on vendors and partners who will generate the majority of your sales revenue.