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Channel Matters Blog > May 2011 > Channel management begins before there is a channel to manage

Channel management begins before there is a channel to manage

by William Vanderbilt
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The key to successfully developing and nurturing channel partners and the business results they produce for a vendor lies in the focus placed on customers and market needs before any partner is selected.  Knowing who will ultimately buy and consume a vendor's products and services will guide the vendor in determining which partners are most likely to succeed. In the same way that a company would not be wise to hire all of its employees without considering the roles and responsibilities to which each person will be assigned, vendors should be cautious about engaging channel partners without a complete understanding of the needs of their prospective customers and markets.

Channel partners are like an extension of the vendor.  Vendors leverage a variety of services from channel partners including sales, marketing, technical support, service, implementation and delivery.  Channel partners are usually compensated for this work through the margin they receive from the vendor.  Ideally, the amount of compensation should be commensurate with the amount and quality of effort provided by the channel partner.

When it is not clear what market/customer segments should be engaged by channel partners or what the specific requirements are for selling to and supporting those target markets, it can be very difficult (if not impossible) to identify partners that will be effective in that role.  Not all partners are created equal.  Some partners are more experienced and skilled in certain areas than others.  Knowing what skills, experience and capabilities are needed to drive business in selected target market segments will help vendors pick partners with the right set of skills, experiences and capabilities.  It will also help ensure that the goals and vision of the partner align with how the target end-user customer needs to be sold to and supported.

It's worth noting that most companies (not just in technology or in channels) sell to the same customers and markets over and over again.  That does make sense.  After all, when a company establishes a relationship with a market segment or set of customers and has a reputation in that market segment or with those customers, they are likely to realize repeat business.  Repeat business is much less expensive than new business so a key value that a channel partner often brings to a vendor is the ability to access a set of customers or markets at a lower cost.

When market and customer identification doesn't happen before partners are selected, the vendor is likely to invest a significant amount of time, money and resource trying to help a partner succeed, but it just may be that the partner has to learn a whole new set of competencies or establish new relationships with customers or markets to which they have not previously sold.  Like so many other areas in life, putting first things first makes the later tasks much easier, and ultimately smooths the entire process.

Last modified on 6/30/2013 10:10:35 PM
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