For many producers, manufacturers, and vendors, setting up collaborations with one or more channel partners (partners who will sell or resell their products or services, acting as an outsourced sales team) is essential for starting a successful sales effort.

However, delegating such an important duty to an external partner also means investing extra care in setting up a partner program, ensuring that the agreed-upon framework can deliver the results you’re aiming for.

We will explore the benefits of building a successful channel partner program and provide tips on how to achieve that success.

What Is a Channel Partner Program?

In the simplest terms, a channel partner program refers to a strategy to motivate and engage your channel partners to deliver more value for their customers and generate more sales for your business.

More broadly, a channel program refers to an agreement between the provider and partners, defining the exact terms and conditions of the channel partnership.

Some main types of channel partnership programs include:

• Marketplaces: Marketplaces are external vendors that provide tools to help showcase and sell a product more effectively and with greater reach.
• Resellers: These partners purchase products or services at a discounted rate and resell them.
• Value-added resellers: Partner resellers “add value” to the final product by enhancing it with additional services, integrations, customizations, or bonuses.
• Service partners: Some partners offer additional services in addition to the basic offer, such as training, implementation, or consulting.
• Referral partners: Referral partners don’t engage in direct selling, but instead only refer leads to the company, typically in exchange for a commission.

What Are the Benefits of a Channel Partner Program?

Channel partnerships are taking up an increasingly important part of the modern business landscape, gradually evolving into complex partner networks also known as ecosystems. According to McKinsey, these ecosystems are expected to create $80 trillion annually by 2030.

The greater competitiveness of contemporary marketing necessitates meeting potential customers right where they are if you want to gain an edge over your competitors. As such, marketing and sales departments need to provide a tailored experience with a deep understanding of their customers’ needs.

It’s exactly this factor that has led to the increased importance of channel partnerships—rather than handling it themselves, businesses choose to outsource the gradually more complex tasks of marketing and sales to external partners, who are often able to do it more effectively.

10 Best Practices for Building a Successful Channel Partner Program

The following practices encompass essential stepping stones for building an effective and successful partner program.

1. Define the Value Proposition

When building a pitch for your product or service that will help you stand out from the competition, it’s necessary to define a central value proposition that will attract customers and help sell your products or services.

To do this, research your target demographic and confidently address specific pain points that you can address more effectively than your competitors, building your value proposition around those.

The value proposition is also crucial when attracting potential channel partners—it should inspire confidence that you have a clear objective in mind and that they will be able to profit from aligning with your vision.

2. Create a Common Set of Goals

While a strong value proposition is essential, inspiring confidence from potential partners also requires concrete goals that they can benefit from, too. As part of your pitch, it’s a good idea to choose a goal that fulfills both your and your partner’s needs, such as the number of new sales, and set performance milestones that you’re planning to reach within a certain timeframe.

As an extra incentive for your partners, you can also include a tiered benefit program for reaching each of these milestones, with benefits such as increased commissions, exclusive gifts and services, and more.

3. Define Key Partner Performance Metrics

Consistently keeping track of all relevant KPIs and defining the most important ones you wish to focus on building is a vital part of any strong sales strategy. However, with channel partners, there are more factors to keep in mind when defining “good performance” than simply focusing on a return on investment or channel sales.

Consider these four segments when gauging your partners’ performance—depending on your campaign goals, you can prioritize these metrics as you see fit, both for individual partners and the entire campaign:

• Operational performance: How well does your partner meet measurable operational metrics?
• Financial fitness: Does the partner’s activity increase your overall revenue or provide new revenue opportunities?
• Strategic strength: Does the partnership expand your market reach or otherwise improve your strategic position?
• Relationship health: How easy it is to do business with your partner, is there trust in the relationship, and how well does communication flow?

4. Identify Potential Partners

Before recruiting a partner, you need to define their place in your overall sales process and strategy, and see how well they’re able to fulfill those roles. For example, if you’re looking for a local distributor, you likely want to look for partners with strong logistics capabilities.

It’s also worth scooping out information for their own strategies, plans, and ambitions—a relationship where your and your partner’s business goals are in full alignment is bound to be a successful one.

5. Reach Out to Potential Partners

Choosing the best possible partners won’t matter much without a robust recruitment process that will make communication smooth and transparent. Convincing potential partners that such collaboration will continue throughout your partnership is also necessary to stay on top of your competitors.

Offering incentives catering to partner needs, such as supplying sales and marketing materials and other assets and templates that will help them through their affiliate journey, will greatly improve your potential to find new partners.

6. Create a Solid Channel Partnership Agreement

A partner agreement is a binding contract between you and your partner that clearly outlines expectations, contractual obligations, and legal duties on both sides of the agreement. An agreement that includes the following elements will increase a sense of trust and reduce the risk of future conflicts:

• Purpose of the agreement;
• Partner relationship;
• Responsibilities;
• Payment terms;
• Confidentiality obligations;
• Available support;
• Indemnification;
• Termination clause.

7. Set Up an Onboarding Process

A well-thought-out onboarding process, meant to ease your partner into starting their work after the partnership is closed, creates the foundations for a healthy business relationship.

First impressions greatly matter here, and you should ensure that your new partner finds a well-designed, intuitive partner portal and the opportunity for a one-on-one talk with you or a relevant employee, offering the chance to discuss future plans and cooperation.

8. Provide a Professional Channel Partner Training Program

Investing in a professional training program for your channel partners helps equip them to serve end customers more effectively, making it pay off in the long term.

A training program providing partners with skills on how to use your partner software, general knowledge of your brand, its products, and services, as well as knowing how to accurately replicate your brand voice and represent your brand’s identity, should help increase cohesion and deliver value in the long run.

9. Motivate and Nurture Your Partner Relationships

It’s not enough to merely start off on the right foot with your channel partners—keeping a fruitful cooperation also requires continuous partner engagement.

You need to regularly communicate with your partners, share relevant product updates and other news, as well as actively ask for their feedback and input on your products or services or the channel partner program itself.

10. Use Partner Relationship Management (PRM) Software

If you’re running a complex channel partner program with multiple channel partners, manual partner management becomes incredibly difficult and time-consuming. Although that’s the point where using PRM software becomes necessary, it’s very helpful even at earlier stages of your program’s development.

These software solutions—such as Impact, Salesforce, or Hubspot—allow you to communicate more easily with your partners, share resources with them, and keep track of all of their metrics, among other benefits.

Wrapping Up

While these ten practices represent the baseline for launching a channel partner program, they’re far from the only steps you need to take to achieve success. A high-quality partner program requires constant care and vigilance to stay on top of market innovations and keep up with competitors, making tweaks if necessary.

As such, leveraging the automation capabilities of PRM software is a great idea for maintaining your partner program through its lifespan. Above all, make sure to listen to your partners and stay flexible to their concerns—sometimes, the most crucial aspect of an effective partnership isn’t technicalities, but an open, honest, and forthcoming personal relationship.