Prospecting for new channel partners is one of the more complex things you can ask a sales development team to do. For teams that have previously focused on direct sales, important questions to consider include “what is our ideal channel partner,” “how do we measure partner success,” and “how do we qualify potential partners.” These can all be difficult to answer depending on where you are in your channel journey.
To help get us all on the same page, what exactly is a channel partner? Put simply, any third party that sells your product or service is a channel partner. That includes resellers, affiliates, distributors, and anyone who doesn’t work for your organization but helps you sell. Sales from channel partners are also called “indirect sales.”
Since you are relying on someone external to take over a part of your sales process, setting up a repeatable system often takes time to get right. Being thoughtful at the top of the funnel can save a lot of headaches later. Here are a few practical tips about how to think through the channel development process.
1) Relationships Really Matter
Successful channel partners are more likely to have strong personal relationships with your team than a typical direct customer for many SaaS companies. Channel partners usually need to believe in a product to successfully sell it, as well as have significant trust in your team and a detailed knowledge of your organization. Find and network with prospective channel partners where your audience gathers, be it at conferences, social engagements, or educational events. As a team, be willing to invest in in-person networking to form those channel relationships.
2) Look for Signs of Commitment
All too often, prospective channel partners can seem interested and commit to selling with big dreams, only to fizzle out after significant investment from your team. Channel partners take time to “activate” with training, onboarding, and resources. Look closely for early signs of commitment and capability in the qualification process. It’s hard to motivate someone you have no direct influence over, so find and test for leading indicators of engagement. This is where a platform or partnership fee can come in handy. For example, will an organization actually invest in learning to sell your product if they won’t pay a partnership fee of $5,000 or $10,000, commit to investing in marketing, or dedicate some other resource? If possible, avoid investing your time and energy into a partner who won’t similarly invest.
3) Experiment Quickly
From when prospecting begins, it can take many months to realize that a type of partner isn’t working out, so focus on reducing that time. Aim to fail fast and move on, especially at the top of the funnel. We recommend quick, defined experiments with careful tracking of the cohorts through the funnel and their eventual sales. Measure how segments perform to hone in on the ideal partner before committing too many resources to a particular segment (remember, channel partners can get expensive).
4) Specialization Helps
Dedicate one sales development rep or team to channel development. We advise customers not to farm out little bits of the initiative to many team members. Channel qualification can be confusing, especially for junior reps who are rapidly context switching between direct and channel prospects. One rep or group can iterate and improve the system, which can then be replicated across a larger organization. Pro tip: if experimenting with channel, compensation can be tricky to get right, so consider a slightly higher base salary or more generous variable compensation. Good experiments often fail, and channel experiments can take a long time. We want reps excited to go on this journey with us, not jealous of their direct colleagues.
Prospecting for channel partners can take a lot of work to get right, but can also be a great way to grow. Once partners are activated and selling, they open a company to new customers and potentially completely new markets.