Leveraging Channel Strategies for Growth
The pressure to increase pipeline and revenue is ever-present for all companies. Sales and marketing teams constantly strive to meet targets and grow their customer base. However, there's a powerful strategy that can alleviate this pressure while driving growth: channel sales. In this blog, we'll explore how building a channel strategy can be a game-changer for companies looking to expand their market presence and boost revenue.
I worked with Microsoft for nearly a decade, part of which was dedicated to channel marketing – managing the relationships with partners and helping them to sell Microsoft solutions on our behalf. It’s an ingenious strategy to scale reach in the marketplace and alleviate the pressure on sales teams to perform. History will show that the more alliances you have, the greater your chances for success because of the sheer volume of product you can move. Instead of being a consultant to sales reps, I helped partner companies to succeed. I loved it because I got to vicariously be an entrepreneur by guiding SMB resellers to develop their marketing practices and grow business.
The Pressure on Sales & Marketing Teams
Traditional in-house sales and marketing teams often face the daunting tasks of generating leads, nurturing prospects, and closing deals – a lot of work. Ideally, the company would have a robust marketing plan to generate qualified leads before passing them along to sales, but this is not always the case. When the onus of managing the entire buyer’s journey rests solely on the shoulders of the sales team, fewer deals will be closed due to limited resources, namely time. Expansion can also be a challenge when it comes to reaching new markets and scaling operations. To meet ambitious growth targets, companies need a scalable solution that can efficiently handle large volumes of leads without sacrificing the quality of engagements during the sales cycle. Channel sales is one strategy to do just that.
What Is a Channel Strategy and How Does It Benefit Your Company?
A channel sales strategy involves partnering with third-party organizations, such as resellers, distributors, or system integrators, to sell products or services on your behalf. My bias is towards the software-as-a-service (SaaS) industry, but partners come in many forms for different industries. These partnerships prove to be mutually beneficial when external offerings enhance your product or service with additional, synergistic features or services of their own. This is a “win-win” relationship because in the process of bringing both offerings to market, you can combine resources for marketing, sales, and customer service to scale customer engagement and subsequently increase customer satisfaction with not one, but two companies willing to aid and trouble-shoot to achieve an optimized solution.
“This is a “win-win” relationship because in the process of bringing both offerings to market, you can combine resources for marketing, sales, and customer service to scale customer engagement and subsequently increase customer satisfaction with not one, but two companies willing to aid and trouble-shoot to achieve an optimized solution.”
By combining marketing efforts with partners, you can augment your internal database with additional qualified leads. The relationship itself adds clout to your promotional efforts lending to higher conversion rates and shorter sales stages throughout the buyer’s journey. Furthermore, this will reduce customer acquisition costs (CACs) for all parties.
A channel strategy also increases your company’s expertise. Instead of building out a solution engineering team to help your sales team field technical questions, for example, defer to your partner network to provide guidance and follow the prospect through the final stages of implementation, post-sale.
Building a Channel Strategy
The best way to implement a channel strategy is to build a partner program. Having done this at Microsoft, I can testify that when your internal sales team reaches X number of customers, your partner network can reach at least 10X that number with a commensurate impact to revenue to follow. Here are the most important factors to make your partner program a success:
Identifying Ideal Channel Partners – Thoroughly evaluate potential partners to ensure alignment with your goals and target markets. As a marketer, I’ve created marketing campaigns specifically targeting this audience to convince them of the benefits of joining forces.
Defining Roles and Responsibilities – Clearly outline the responsibilities of both your company and your channel partners to avoid misunderstandings. This is critical at the sales juncture, to make sure your sales team remains happy and is compensated appropriately when a third party is brought in to assist in closing deals.
Developing Training and Support Programs – Provide training and resources to enable channel partners to effectively market and sell your products.
Setting Clear Goals and Metrics – Define measurable objectives and key performance indicators (KPIs) to track progress and success. You’ll want to regularly assess and fine-tune your channel strategy to maximize results.
Establishing Communication Channels – Open and effective communication is essential for a successful partnership. Regular meetings and updates are crucial. Even creating joint Slack channels where partners have access to your customer inquiries can alleviate pressure on your team.
Implementing Technology and Tools – Leverage technology such as partner portals or CRM systems to streamline collaboration and data sharing.
Challenges and Pitfalls
A channel strategy can be tricky to maneuver because you are dealing with an entire team of external stakeholders that [aside from legal contracts signed at the inception of your relationship] have no inherent obligation to assure you succeed. They have their own products and services to market and sell, and they may lose sight of the benefits of working together.
On top of that, they may be partnering with your competitors as well. This is where you develop a need to win “mindshare” of the partner, constantly marketing to the partner as well as through them to ensure they are motivated and aligned with your goals.
Consistency in branding and messaging across channels is crucial to maintain your company's identity. I’ve created turnkey marketing assets for partners to use in their sales and marketing efforts where they can simply add their logo and contact information to content, making their efforts as seamless as possible, and preventing additional cycles of approval for branding.
If your partner program grows in size, you may work with partners that are competitive to one another, so it’s important to have a strategy to address conflicts between channel partners. This could be as simple as performance rewards. Microsoft, for example, provided market development funds (MDFs) when partners committed to driving increments of revenue – the greater the revenue driven, the greater the rewards to continue investing in growth.
The Bottom Line
At the end of the day, a successful channel strategy can help your company grow exponentially. As long as you are aligned with companies offering supplemental products and services to your own, whose values likewise enhance your brand image, you can accelerate your reach and influence within the marketplace.
About the Author
Allison has an international MBA in marketing and entrepreneurialism, and has built her career on developing strategic marketing plans. By working with Microsoft for nearly a decade, she honed corporate marketing skills before transitioning to the startup world to help companies grow brand recognition and subsequently revenue. There, she explored various SaaS industries including cybersecurity, DevSecOps, telematics, and industrial IoT (IIoT). All of these industries leverage automation, machine learning, predictive analytics, and various forms of data management. It has been Allison’s pleasure to bring these powerful tools to light and watch as companies grow their business.
Visit her on LinkedIn: www.linkedin.com/in/AllisonQDurbin
