5 Steps to Creating a Winning Channel Marketing Strategy
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5 Steps to Creating a Winning Channel Marketing Strategy
As a company with a B2B software offering, channel partners are a great way to get more bang for your marketing and sales buck. Channel partnerships allow you to increase market share without paying to train, house, and equip additional marketing and sales staff. You and your partner generate more revenue in return, so, theoretically at least, everyone wins. Given all of these potential advantages, it’s little wonder Crossbeam research shows that 82% of B2B SaaS companies have channel partnerships.
Like any collaboration, however, the world of channel marketing contains many potential pitfalls. That’s why I did a webinar for the CMO Alliance’s CMO Summit entitled “The Channel Marketing Challenge: 5 Things to Know,” in which I describe how you can make the most of your channel partnerships to ensure that they truly are mutually advantageous.
Treat channel partners like customers
When thinking about how to attract and retain potential channel partners, start as always with research. Vet potential companies to make sure they would be a good fit as a channel partner, sharing similar ideas, cultures, and goals within your mutual market. More importantly, ensure that your prospective partner is ready and able to invest in a partnership with you at the time of your choice.
Once you’ve established that you’d be a good fit, position yourself exactly as you would with any other customer segment. What is your offer, and who is it for? What is special about it, and what are the benefits it brings to the potential partner? Examining the answers to these questions will help fine tune your channel messaging strategy and reach the potential partner company on their terms.
Create an ideal partner profile
In the same way, you can apply all the same tools and techniques you use for marketing to your end customers to channel partners, only with a slight twist to make it relevant. The more you understand about your potential partners––their industry context, pain points, key personas, and their customer (aka partner) journey––the more you can hone your content to meet your partners’ needs and smooth their way through their journey.
Make it your business to understand the partner’s business
Just like a venture capitalist, channel partners will evaluate you as an investment––and they will compare you against all the other potential investments they could make instead. In the end, a potential partner will choose to work with the company that is easiest to do business with and helps them close deals better and faster.
To make sure you are that company, it helps to understand your potential partner’s bottom line. How will they make money from this deal, and at what cost? By caring about what matters to them, you can design your channel marketing strategy to demonstrate how your potential partnership will meet their key criteria.
Speed to ROI: your channel partner’s top priority
Key to evaluating your potential partner’s needs is understanding how the partner will make money. There are a wide range of revenue and profit models available for channel partnerships, and most of them go beyond whatever margin the partner makes on the resale of your product. Many channel partnerships, for example, bundle their own training or support services with the integration or implementation of your components. Take a wider lens when thinking about the profit structure of your proposed partnership, and make sure that it makes sense from all angles.
Growth, risk, and cost
A big factor in the profitability of a partnership is how much potential growth it promises weighed against how much risk and cost it will involve. Your channel marketing efforts must demonstrate that you understand this cost/benefit equation and how it can vary for the particular market, segment, and vertical you both serve. If you are proposing to jointly enter a relatively stagnant market, for example, but your collaboration will involve high costs for your partner in terms of additional training, certification, and retooling of their own messaging campaigns, then it’s unlikely to be a good fit.
Not all partners are created equal
As you think about designing your channel partner program, think through what different kinds of partners you’re planning to bring on and how the tiers and structure of your program will differ accordingly. A few common types of partnership are as follows:
- Referral partners: Your partner makes referrals or introductions to your business, usually in exchange for a finder’s fee or commission.
- Four-legged partners: A joint marketing program where a sales representative from the partner is working in conjunction with your own.
- Value-added resellers (VARs): VARs take your product, add a profit margin, and deliver it to end users with value added. The VAR then pays you a license fee or royalties.
- Service delivery partners: These partners enhance the value of your product by providing a range of different services around both it and adjacent products. This can include implementation, installation, and customization services.
- White label partners: The partner applies their own brand to your product, which is specifically designed for this purpose.
Each type of partnership has its own specific revenue and profit model, which, as we saw above, will be a big factor in the success of your channel marketing strategy. Beyond that, however, each type of partnership also brings very different priorities, pain points, and needs, and each will require a different kind of channel marketing for you to be successful.
Keep your messaging simple and accessible
As we’ve pointed out elsewhere on this blog, another big value-add that you need to bring to any channel partnership is messaging collateral that can be easily incorporated into the partner company’s marketing and sales efforts. As above, the kinds of collateral you and your partner use in your joint venture and how much of your own branding and messaging it will involve varies with the kind of partnership you have.
In an original equipment manufacturer (OEM) scenario, for example, your collateral will be branded with your brand and messaging alone. On the other end of the spectrum is white-label collateral, where your marketing department provides the partner’s with copy and branding that can be integrated into your partner’s larger solution message.
In each of these channel marketing scenarios, the collateral you produce for your partner will vary widely depending on the format it will eventually take and how much of your brand identity it will retain. Keep this in mind when creating your channel marketing strategy, and be sure to tailor your proposed messaging to fit the partnership (not the other way around).
Create synergy between sales and marketing
Your company might be one of thirty or forty that a channel partner works with, so you want to make it very easy for them to sell your solution. If your partner’s sales team doesn’t have what it needs from you, or they can’t understand how to position your product within their overall solution, they’ll choose someone else’s product instead.
How can you ensure that it’s simple for the partner company to do business with you?
Keep your sales collateral agile and adaptable
When it comes to sales enablement materials for channel marketing, more is less. Or, to quote Antoine de Saint-Exupéry, “Perfection is achieved not when there is nothing more to add, but when there is nothing left to take away.” Provide your partner’s sales team with exactly what they need to position your product, and don’t overwhelm them with content.
On a similar note, don’t make your partner’s salespeople do multiple-day trainings to familiarize themselves with your sales enablement materials. Instead, make your training content modular and bite-sized so that team members can work it into their existing schedule.
Again, in order to succeed, this partnership needs to be more about them than you. Making it easy for them to market, sell, and deliver your offering will in turn benefit both of your bottom lines.
Effective channel marketing
With distributors and resellers driving 70% or more of a tech vendor’s revenue, you can see why it’s increasingly important to make and keep channel partnerships as part of your business model. A channel partner can help you go to market faster, reach more customers, and grow your mutual revenue while saving on sales and marketing costs.
But as we’ve seen, both above and in my webinar, these partnerships aren’t just a one-and-done deal. They require careful consideration in their setup and equally careful maintenance once they are established. If you treat your channel partner like a valued customer from start to finish, you will quickly see why so many companies rely on channel partners to boost their revenue and amplify their marketing efforts.
Watch the webinar “The Channel Marketing Challenge – 5 Things to Know”
