Shared Expenses Yield Common Objectives With Channel Partners

Challenge: How do you get your partners to focus their efforts on programs with the highest results?

Lesson: Shared expenses and tight metrics will optimize marketing programs for both the vendor and the reseller partner.

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Challenge: How do you get your partners to focus their efforts on programs with the highest results?

Reseller partners are frequently an essential component to a company’s sales and marketing plans. They have relationships with the customer and add value to your overall solution by completing the surrounding products or services required by the customer. However, resellers usually don’t have a huge team of marketing professionals, and they frequently operate on relatively thin margins.

In a separate post, I outlined the importance of creating effective programs that partners can easily tailor and incorporate into their own marketing programs. However, the vendor needs to ensure that the partner resellers’ interests are also aligned with their own. The easiest and most effective way to do this is by using a shared expense model so that partners can execute programs more quickly and cost-effectively. Keep in mind, however, partners still need to choose those programs that will be most effective for their customer base since this still likely represents a significant expense for the reseller.

The vendor must balance their overall spend with their partners’ versus their direct marketing spend. In some respects, this approach is better than direct programs because with shared costs, the vendor spends 50% less on the programs, all else being equal. These programs may only be available to partners that have achieved certain sales or certification levels – due to budget or vendor staff limitations. These programs are also often connected to Marketing Development Fund (MDF) or Co-op funding programs to reward appropriate partner actions.

The point at which many of these break down is in either the pre-approval process or the post-program measurement process. The vendor must have a closed loop system for approving and measuring these programs to measure the impact of these programs relative to the vendor’s direct programs. This feedback is important for both sides so they can see which programs drove revenue and which did not. As with all programs, you can’t manage what you can’t measure. Certainly reporting results for channel partner programs is critical to optimizing these programs over time. Adding shared expenses aligns the interests directly for both the vendor and the reseller.

Lesson: Shared expenses and tight metrics will optimize marketing programs for both the vendor and the reseller partner.

Accelerating Channel Sales with Effective Marketing Programs

Challenge: Motivating and training channel partners

Lesson: Simplify the marketing process to empower channel partners to create their own success and add to yours.

Challenge: Motivating and training channel partners

Channel partners can be essential to a company’s sales growth. However, the company must have realistic expectations from their channel partners and a consistent commitment to their success. Vendors must invest in programs that scale to meet the needs of their partners and understands both their strengths and weaknesses. Unfortunately, and all too often, companies under-invest in their channel partners, set unrealistic expectations and take steps that frequently undermine the relationship.

Channel partners survive in relatively thin margins (typically under 30%) and therefore usually do not have a deep bench of marketing talent nor the time to focus on specific products since they carry a broad array of solutions. What resellers need are products that have a relatively simple sales process and sales programs that can be implemented quickly without substantial time or money. The most effective programs require simple steps – such as uploading an email list and modifying existing email content to send a traceable email blast to their existing customer base. Another great example is co-funding local events hosted by the channel partner with onsite support by the vendor. I like to describe these programs as ‘Just Add Water’ – they only need resources that the reseller readily has on hand. The vendor will typically have much more sophisticated web and automation systems – so extending these programs to their partners often creates a win-win situation.

In the end, the company must be completely committed to the success of its partners and therefore assign marketing personnel and funds to create these programs. Dedicated headcount is necessary to develop and deliver these programs, train resellers on how to use them and then continue to optimize them over time. Even great programs that are simple to implement will require an evangelist to get partners to utilize these tools. The vendor is well advised to invest in creating a limited set of effective programs where the partners know they will succeed with their limited funds and staff.

Lesson: Simplify the marketing process to empower channel partners to create their own success and add to yours.