Building a Partner Ecosystem
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How much of your business top line is a result of or influenced by an indirect sales partner? How many of your implementations are completed by a Systems Integrator? For many companies, building a robust channel ecosystem can be the fastest way to move into new markets without having to build up your own team.
A channel partner ecosystem refers to a collaborative network of independent entities, such as distributors, resellers, value-added resellers (VARs), system integrators, consultants, and other intermediaries, that work together with a company to promote, sell, and distribute its products or services to end customers. This ecosystem involves a mutually beneficial relationship where each party contributes its expertise, resources, and market reach to drive sales, expand market presence, and enhance customer satisfaction.
8 key components of a channel partner ecosystem:
1. Partners: These are the external entities that join forces with the company to sell its products or services. They can be segmented into various categories based on their roles and capabilities.
2. Distribution Channels: These are the paths through which products or services flow from the company to end customers. Channel partners can operate through various channels, such as direct sales, online platforms, retail stores, or specialized markets.
3. Collaboration and Support: The company and its channel partners collaborate closely to achieve common goals. This collaboration involves sharing information, training, marketing materials, technical support, and resources to ensure partners are well-equipped to represent and sell the company's offerings effectively.
4. Mutual Benefits: The ecosystem is designed to be mutually advantageous. The company benefits from the partners' local market knowledge, established customer relationships, and distribution capabilities, while partners benefit from access to a broader range of products or services, marketing support, and potentially higher profits.
5. Expansion and Market Penetration: Channel partner ecosystems enable companies to extend their market reach without the need for direct investment in new regions or markets. Partners already have established networks and connections, which can accelerate market entry.
6. Customization and Expertise: Different partners may cater to different market segments or have expertise in specific industries. This allows the company to tailor its offerings and marketing strategies to different target audiences.
7. Risk Sharing: By diversifying sales channels and relying on partners with different strengths and market knowledge, the company can reduce its dependence on any single channel and mitigate risks associated with market fluctuations.
The importance of a channel partner ecosystem lies in several factors
1. Increased Market Reach: Partner networks provide access to markets and customer segments that the company may not have been able to tap into on its own.
2. Cost Efficiency: Developing and maintaining an extensive direct sales force can be costly. Partnering with established entities allows the company to leverage the partners' existing resources, reducing the need for heavy investments.
3. Speed to Market: Partnerships can expedite market entry, as partners already have a presence and understanding of their respective markets.
4. Local Expertise: Partners often possess valuable local market insights and cultural knowledge that can help tailor marketing and sales strategies effectively.
5. Focus on Core Competencies: The company can focus on its core competencies (product development, innovation, etc.) while partners handle distribution and sales.
6. Scalability: As the partner network grows, the company can scale its operations without significantly increasing its internal resources.
7. Flexibility: Partner ecosystems allow companies to adapt to changing market conditions and customer preferences more quickly.
In essence, a well-managed channel partner ecosystem can be a strategic asset that accelerates business growth, enhances customer experiences, and opens up new avenues for revenue generation.
So where can Revenue Operations and Enablement contribute to building this capability?
Recently on LinkedIn I posted the following requirements questions. Here are the questions I would ask the GTM Leadership team when it comes to how we can construct our Partnership engine.
▶️ What will the channel partners do? i.e. lead referral, deal registration, co-sell, implementation
▶️ How will you train the partners?
▶️ Do you certify them?
▶️ Are there Partner tiers? Will that unlock additional benefits for them? I.e. higher rev share?
▶️ Dedicated partner manager?
▶️ What does success look like for your partners
▶️ How will you keep track of those metrics?
▶️ Where will you store your partner information?
▶️ Will you need a Partner Relationship Management portal?
▶️ For quota would you consider adding in a weighted mix. Aside from revenue generated, add Partner Influenced pipeline. Similar to a CSQL or an MQL.
Let's start by looking at the different types of partner setups.
Different Partnership Configs
First, the easiest and most likely first foray into partners is to set up a lead referral engine. Here, you're simply collecting leads from a partner. In exchange, if they meet certain criteria you will pay them a referral fee. Sometimes you pay when their referral becomes a customer. Other times, you pay them when their referral reaches stage 2, 3, or whatever. The issue is transparency. How does your partner know where in your funnel their lead is? The opportunity here is to build TRUST with your partner. If they trust you they'll continue to refer leads to you.
Moving beyond lead referrals is a co-seller model. Here, both company and partner jointly work the deal together. One party acts as the point lead while the other strategizes and executes the playbook together. Tracking internal activities between both parties is key here. Every time there's a partner meeting the sales rep or partner manager should create a Meeting in the CRM and appropriately tag the event.
Here are a couple of fields to fill out:
The second form of Deal Registration is the Reseller model. In this model you have authorized partners who effectively serve as an extended sales force. When they sell, it's nearly the same as one of your sellers. The Reseller can offer on a dedicated basis or sell as part of a portfolio of offerings. When the partner gets to the contacting phase a decision is made whether to use Reseller or your paper. If the Reseller opts to use their paper make sure you align both legal teams on the language within the agreements.
Without much infrastructure your partners may rely on simple forms, operating cadences, and email correspondence. Over time, graduating to a Partner Relationship Management solution may help scale the program. Instead of shared Google Docs, the PRM solution may be an optimal choice because of several features, namely:
Enablement features (quizzes, videos, learning tracks)
Searchability (metadata, in-content search)
Bi-directional sync to CRM
For paid members let's keep talking about how to set up your partner ecosystem within your CRM. We'll go over the following:
Setting up your partner acquisition pipeline
Tagging companies that are BOTH prospects and partners
Setting up Partner Influenced Pipeline
Tracking credit for revenue share with your partners
So let's get to it.
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