Selecting and Recruiting New Channel Partners
Channel partners, or companies that work with you to market and sell your products and services, are an integral part of marketing campaigns for the technology sector. However, building out your channel programme can be a big challenge. How can you identify an initial list of potential resellers, system integrators, value-added resellers, or independent software vendors? How can you determine which ones are potentially suitable for you? How do you eventually short list your potential partners to have a deeper discussion with?
1. The Importance of Channel Partners
A channel partner is a company that a manufacturer or producer partners with to market and sell the products or services that the producer provides. Partners can take many forms, depending on the product or service being marketed, but overall they have become an important part of marketing, particularly in the technology arena. To put it simply, partners market and sell your product to end users for you, allowing you to focus more time and resource on product development and support.
In 2005, channel partners produced over 65% of gross revenues for the largest IT companies. Large IT vendors such as Microsoft, HP, and Cisco invest billions of dollars into channel marketing programs each year. Mid-tier companies have also introduced channel programs and sales models.
Why are channel partners such an important part of these vendors’ marketing strategies? Companies use the expertise that partners can provide to increase profits and to expand market presence. Partners can interact directly with customers and provide them with customized solutions.
Partners have been shown to be a critical piece in the marketing strategy of many technology companies. However, these partnerships were not put in place overnight. A recruitment process was established by each company to bring in the partners that will be a best fit with the company and maximize the return on investment.
As shown in the figure, the recruitment process will begin with a large pool of potential partners, and the process will allow you to narrow down the pool until you are left with the potential partners that are best suited for your partner campaign.
A channel partner recruitment process has two primary phases:
• Identify potential partners – In this phase, potential channel partners are identified. Some initial information gathering takes place to qualify potential partners. At the end of this phase, you’ll have a list of potential channel partners that can be engaged in the next phase.
• Recruiting partners – In this phase, each of the potential channel partners is engaged to gather information about how well these potential partners match your qualifications. At the end of this phase, you’ll have narrowed your list of potential channel partners down to those that best match your needs and be able to bring those companies on board.
Before you begin identifying potential partners, you should first have a clear idea of the qualifications you are looking for in a channel partner. Second, you cannot begin your recruitment process until you have a clear understanding of what your expectations are for your partners and what resources you will have to support your partners. You can’t start talking with partners unless it is perfectly clear what you want them to do for you, and what you will do for them. If you already use channel partners, you may have a partner program that you can use directly, otherwise you need to develop a partner program so that you can let potential partners know what resources you will have available.
2. Identifying Potential Channel Partners
Before you can start recruiting channel partners, you have to identify potential channel partners and gather information about them, so that you can make an educated decision on whether or not to move forward with the recruiting process. This phase includes:
2.1 Generate List of Potential Partners
The starting point is to build a relatively large list of potential partner companies that can be further qualified for suitability. This can be done by in-house personnel, through list brokers, or by a third party vendor.
When you are creating your list, determine whether you are looking for distributors, retail outlets, value added resellers, or a combination of these, and ensure that your list includes the categories you are looking for. This distribution would depend on the products you are promoting, and the degree of value add that is required. Products that are high value with significant service and support, or require customization, will require partnerships with value added resellers or system integrators, while lower price margin products can be marketed by retailers.
Some factors to consider when generating a list of potential partners include:
• Company demographics, geographical area, years in business
• Current customer base
• Current partners and agreements
• Sources of revenue
• Employee or revenue numbers
• Technical certifications
• Value add requirements
In addition to actively seeking out potential partners, you can also consider other methods for VAR recruitment such as creating recruitment webinars to provide interest in your recruitment campaign. Webinars can help you to put information out about your recruitment campaign and allow potential partners to learn about what you have to offer without committing to a more in-depth conversation right away. Attendees can then be contacted via email after the webinar to gauge interest, and then they can be added to your potential partner list when they are ready.