Article

The secret strategy for increasing channel revenue

Does your business demonstrate the 4 attributes of a successful channel partnership - or is it all about the revenue?

September 19, 2013

By Terrina Rishel, CEO, ATM Authority

When organizations utilize channels (reseller partners) to distribute their products and services, many deploy strategies that are narrowly focused on one thing: revenue. Clearly that is a predominant goal, but the real focus should be: comprehensive channel engagement.

A channel engagement strategy is an excellence investment of resources to increase revenue and create exponential channel growth. Many organizations think of engagement as an end-result or effect of other revenue strategies — chasing the elusive engagement model and never reaching full channel optimization.

It's all about the relationship

Channel partners evaluate how much resource they will invest into representing a brand based upon their level of trust and relationship with a supplier or manufacturer. If resellers lack confidence in the partnership, they will not focus on your solutions. The obvious net result is lost revenue, however, there are additional costs such as:

• Less brand awareness
• Loss of market penetration
• Decreased reoccurring revenue
• Inability to attract and retain the best reseller partners

Question your culture

The first step in developing a loyal partnership is to evaluate your culture.

• Do you have key players in channel management roles that set the proper tone for a strong reseller relationship?
• Are these individuals adept at proactively building a relationship with partners?
• Do they think of your partners as customers –or do they treat them as external sales people?
• Do they only call partners when they want their sales forecast?

Consider bringing in outside talent to develop this type of culture. Often channel managers get promoted from internal positions that may perceive indirect sales people as inferior to direct sales staff. This mentality can be detrimental to channel relationships, particularly when it comes to motivating sales and building relationships.

A solid strategy for creating this kind of culture is hiring talent that has experience working as a partner in a channel. Typically having an insider view of reseller needs can be beneficial in developing a successful, relationship-driven culture.

Walk the walk

Effective communication is important, but showing you care about your partner's success requires a multi-pronged approach. It's critical to:

• Develop a set of rules that are fair and reasonable
• Provide partner-centric support tools that are useful and effective
• Create processes for proactive support for staff to follow
• Offer an efficient way for concerns to be communicated and addressed 

Evaluate rules through the eyes of a partner and determine: Do they motivate sales? Do they promote channel conflict and mistrust? Are rules consistently applied to all regions and partners? Unfair, inconsistent rules are demotivating and result in lost sales opportunities.

Does your pricing structure offer enough incentive for partners to "buy into" making your solutions a priority? Never ask a partner to sell a solution with zero margin, even if it's bundled into a larger offering with margin. Why should a reseller create revenue for you — with nothing in return? This is common channel occurrence and it's a losing strategy!

Put into place a network of support staff that proactively reaches out. Don't wait for a partner to call you —develop a routine of checking in. Never treat all of your partners the same; customize your approach based on their individual needs. With your key channel managers invested in eliminating obstacles, you will reap ongoing financial rewards.

Continually check the pulse of your partners and request honest feedback. Be open to negative comments and see them as opportunities to build trust with corrective measures.

Many organizations create rules, processes and tools that are designed for an internal culture, and often fail miserably in an indirect channel. Re-evaluate your entire approach with feedback directly from the channel, and you will have the beginnings of channel engagement.

Know your audience

Successful channel partners are independent, creative, entrepreneurs with a very different set of triggers that motivate them. Channel optimization requires an in-depth review of those trigger points:

• Make it easy to learn about the important details of your products. Busy professionals won't check your website everyday—set-up "push" notifications when portals are updated. Increase webinar opportunities where they can learn in short intervals and can have their questions answered immediately. Don't create certification programs that are based on a one-size fits all model; create more targeted learning opportunities.
• Don't make it difficult to order product or understand pricing. Create a front-end ordering system that is simple and logical that doesn't deter usage.
• Don't create value propositions in a bubble! Ask for feedback from the people whom are actually in the marketplace. If you can't sell them on a value prop, that solution will fail in the channel.

Don't give partners what you want to give them — tap into what motivates them and deliver it! The best investment of resource to increase revenue in your channel is a comprehensive channel engagement strategy. Happy, trusting partnerships will lay the foundation for a stronger revenue stream and exponential channel growth.

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photo: alex wellerstein