For many businesses today, they’re the largest source of revenue. More than 70% of all global revenue can be attributed to third-party channels, according to data from Forrester. In the tech industry, channel partners bring in about two-thirds of the revenue. The importance of channel partners to the success of a business is clear. Yet why are so many still dissatisfied with existing partner programs? And what makes channel partner engagement so crucial?
Here, we seek to explain the benefits of engaged channel partners and what you can do to create, build and maintain high levels of engagement.
What is Channel Partner Engagement?
Given the integral role of partners, businesses need to keep them satisfied. Engaged partners sell more. Beyond sales, partners who are invested in the vendor’s success actively try to carry out best practices and collaborate on strategies.
Yet too many companies treat the relationship as transactional instead of an active partnership. To increase channel partner engagement, plans and initiatives are put into place which aim to keep partners happily on board, engaged and committed to achieving mutual success.
What Are The Benefits Of Having Engaged Partners?
1. Enthusiastic and knowledgeable partners sell more
Buyers naturally gravitate towards salespeople who know what they’re talking about. This is especially true for technical products. When your customers are engineers, architects, and software developers, channel partners are expected to be subject matter experts themselves.
Technical savviness breeds trust–and self-confidence. Engaged channel partners are enthusiastic channel partners. And on the sales floor, this enthusiasm enables your channel partners to generate excitement for your product.
2. An engaged partner is a loyal partner
In the beginning, fewer companies and more third-party retailers meant that the balance skewed towards suppliers. Channel partners often had little power over the terms of the relationship.
The present landscape looks much more balanced. Channel partners have more choices in providers than they had just three years ago. That means businesses will have to work harder to stay top-of-mind when the time comes to place another order. Retention also costs less than acquisition and onboarding new partners, so improving existing relationships will be more profitable in the long term.
3. Invested partners contribute valuable insights
Many manufacturers sell exclusively through channel partners. That means these businesses are your direct link to end-users. They’re not only avenues for selling, but also for collecting valuable consumer data.
Channel partners are also in a unique position to provide insights into the local market. They understand purchasing behaviours and buyer needs that a manufacturer, headquartered a continent away, may not be aware of. An engaged channel partner is more willing to provide constructive suggestions that will help your strategies find traction on the ground.
4. They take the initiative to promote the product
Channel partnerships aren’t exclusive. At any given time, your distributors and resellers are representing ten to twenty vendors, all while trying to manage their own businesses. That’s a tangle of different brand guidelines and marketing goals.
Imagine yourself in the middle of that complexity. At the end of the day, partners can only take initiative for brands that empower them with resources and knowledge. Partners who are truly committed and who feel like they know the product can even offer their own ideas for promotions and campaigns.
5. Success attracts more partners
Unless you’re already a household brand, it will take some work to attract valuable partners. Successful distributors and retailers are also looking out for their bottom line, and want to work with manufacturers who’ll help them move products.
A good reputation can help entice others to carry your brand. In fact, engaged and satisfied partners can directly help you grow your network, as positive word of mouth affects nearly all B2B decisions.
What are Strategies for Channel Partner Engagement
1. Get to know your partners–and their challenges
In sales, there’s a well-known acronym – WIIFM: What’s In It For Me? And everybody pays attention to it. Including your channel sales partners.
If you want customers to start paying attention and participating in your programs, engagement plans have to be designed around their needs. Taking the time to understand your partner’s needs and engage them, not only fosters loyalty but directly impacts purchasing decisions – 84% of customers buy from manufacturers who they feel acknowledge their goals.
2. Collaborate on sales strategies
Growth is the goal of business, but every business takes a different route to get there. Dropbox targeted so many professionals that enterprises were left with little choice but to integrate their services. Airbus slices pricing by half for airlines to retain key customers.
You probably have your own sales playbook–but so do your channel partners. Collaborate with partners to make integration and execution as painless as possible.
Working together to identify selling opportunities in the region and best practices for each partner should be a part of any engagement plan.
3. Invest in channel partner training
Partners can’t effectively sell your product without training. Many third-party sellers don’t have in-house marketing experts, meaning it’s up to the vendor to train associates on how to sell features and troubleshoot issues. You may know your product from screw to screw, but your partners won’t.
By investing in channel partner training, you’re making sure partners know why your product is the greatest, too. Customers who know the ins and outs of a machine or application are also confident enough to provide solutions.
Having a strong, engaging program in place also lets partners know that you’re committed to their growth and are in it together, increasing goodwill and tearing down the “outsider mentality” that pervades many vendor-channel partner relationships.
4. Create partner programs
Rewards are powerful, even in B2B. Rebates and discounts can represent thousands in revenue for channel partners–it’s not just nice to have. And so customers are proven to go the extra mile to hit the goal. Incentive programs can increase profits and sales by up to 40%, according to a study on Silicon Valley companies and their sales partners.
But you can’t simply build a reward program and expect customers to come. To motivate channel partners, incentives should be relevant and valuable. For instance, most partners want cash incentives, not prize rewards or awards. Partners also expect programs to be clearly defined and of course, attainable.
5. Provide access to Business Intelligence (BI) tools and data
Not all your partners will be major retailers with sophisticated business and market intelligence dashboards, or in-house analytics experts. The adoption of BI and analytics software remains low among third-party companies. Many need support, especially with forecasting demand, targeting ad campaigns, and analysing sales data.
Manufacturers can strengthen the partnership by providing access to tools and software. Or, at the very least, insights from data you’ve collected. Partners with data are more equipped to pursue valuable leads and offer more meaningful service to end users.
Behind every strong channel network is empowered and engaged partners. But these companies aren’t just found, they’re nurtured.
- For third-party sellers to rally around a product, businesses need to
- Treat them as partners
- Understand their motivations
- Collaborate on solutions
- Offer them the resources they need to hit goals
Now, are you ready to take your channel partner program to the next level and ensure partner success? Check out our latest blog post, “How to Ensure Channel Partner Success,” for the opportunity to further enhance your channel partner program skills.