By Andrew Z. Brown & Phil Hogg
Published on January 7, 2016
Read full story on PROFIT

Whether you are selecting a channel partner to re-sell your products or services, or choosing among potential vendors whose wares your company will be re-selling, the stakes couldn’t be higher.

Making the right decision has the potential to increase sales volumes, frequency, and average size, and can lead to exciting new opportunities. Make the wrong decision, and you will waste time, money, and expose your company to unnecessary risk.

So in the second instalment of “A Guide to Building Successful Channel Sales Programs” we draw on the real-life insights from ADP, Vigorate Digital, and SmoothPay to help you choose a partner or vendor that is right for your business and to achieve your goals.

1. SET CRITERIA

Whether you are a channel partner re-selling a vendor’s products/services or a vendor looking for channel partners, you have to identify and weigh what’s most important to your company

It is far too easy to be drawn into channel sales arrangements with the first company to knock on your door. The allure of choosing a company that is widely recognized within your industry can be equally hard to resist. But the most effective channel sales programs result when the vendor and channel partner have each established a set of measurable criteria with which to evaluate one another.

To establish these selection criteria, you should look at your company to identify clearly and accurately your competitive position in the market, internal strengths and weaknesses, current and planned portfolio of products or services and brand equity. The gaps you identify through this assessment serve as the criteria for identifying potential vendors or channel partners.

Score your criteria, and/or place them into broad buckets: “must-haves”, “nice-to-haves” and “must-not-haves”. Toronto-based boutique digital marketing company Vigorate Digital evaluates potential vendors based on ‘types of fit,’ according to Ron Hutzul, who leads partner programs. “Considerstrategic fit, which helps you determine if your strengths and weaknesses truly complement those of the vendors you are evaluating,” advises Hutzul. “Also review operational fit which helps you determine your company’s ability to successfully integrate processes and/or systems with a vendor; and cultural fitwhich reveals whether you share values with the vendors that you plan to work with.”

From the vendor’s side of a channel sales program, the criteria used for selecting channel partners often sets the foundation for the program itself. Take ADP, a leader in human resources technology and solutions “Channel partners are never thought of, or treated as, mere re-sellers who bring discounted offerings to their customers,” explains Amii Stephenson, Director of Channels and Alliances. “ADP wants channel partners who are truly excited about our offerings and recognize that we have something valuable that they cannot get from other vendors.”

2. ESTABLISH AN EVALUATION PROCESS

The criteria that you establish are critical to the success of a channel sales program, so you need a way to ensure they are applied consistently throughout the initial stages of any evaluation.

That means you should:

1. Create an intake process to capture, organize and manage interest expressed by potential vendors and/or channel partners;
2. Assign an individual the responsibilities and resources required to effectively manage potential channel partners and vendors; and<
3. Create a cross-functional team that evaluates potential vendors and/or channel partners against the chosen criteria.

The evaluation process has to be ironclad says Brian Deck, CEO at SmoothPay, a company offering mobile payment apps and loyalty technology that help increase sales and customer engagement for coffee shops, quick service restaurants and retail chains. “SmoothPay is a channel partner for some of North America’s most recognizable telecommunications vendors,” Deck says. “We have also established our own channel partner program. What has allowed us to be effective as a channel partner (and vendor) is devoting resources to evaluate the companies that approach us as well as those we approach.”

3. TEST THE CHANNEL PARTNER OR VENDOR

Strong channel sales programs are not created overnight. Even if all of the criteria and processes are met and followed, true success takes time.

Vendors and channel sales partners should start with a well-defined project that serves to “pilot” the program. Ideally, this is a low-risk sales-focused initiative that helps each participant learn about the pros and cons of working together with a shared objective.

“There are some very telling signs that you can watch for during the early days of your channel sales program that reveal a vendor’s true commitment,” says Vigorate Digital’s Hutzul. “For instance: their willingness to participate in your company’s sales events, how quickly they respond to your requests for making exceptions to pricing and or re-configuring products so that you can close deals, and the transparency they reveal – particularly if they sell their products/services directly to customers as well as through channel partners like you.”

• • • • •

As you discuss your role in a channel sales program and evaluate potential vendors or channel partners, you need to get your house in order so that your partner of choice will want sign on with you. That’s a topic we’ll cover in the next instalment of “A Guide to Building Successful Channel Sales Programs.”

Andrew Z. Brown has launched and promoted over 150 products and services, spanning 15 industries. He has established and managed successful channel/alliance programs internationally, co-produced Canada’s most successful business podcast, and written over 350 articles on the topics of marketing strategy, strategic alliances, product innovation, and C-Suite communications. His most recent book,Business Truths was one of the year’s fastest-selling business books.

For over 25 years, Phil Hogg has built successful channel programs, partnerships, and strategic alliances. He led such programs at top tier brands including Bell Canada, Rogers Communications and Moneris Solutions. He served as the President of the Association of Strategic Alliance Professionals (Toronto Chapter) and is currently, General Manager, Merchant Services at Everlink Payment Services.