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Channel Matters Blog > May 2012 > Identifying joint revenue growth areas is essential

Identifying joint revenue growth areas is essential

by Lynn Shively
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As a channel manager, you are expected to help your channel partner come up with more places and more ways to sell your company’s products and services.  It seems like a simple task, but there are a lot of components involved in making it happen.  The key is to find places where you and they jointly want to invest to grow and achieve businesses strategic goals.

If you are going to ask your partner to invest in you and your products, they will be asking themselves some basic questions and trying to come up with the answers that are best for their company.  They will want to know how they can grow their business and increase their revenue by selling your offerings more easily and with better results than they can by selling one of the other competitive products that they offer.

If you’re going to ask your channel partner to increase revenue in their territory, you and they both need to understand the business of that territory and marketplace.  Helping them gain information and knowledge about the following will help them decide

  • What geographic or industry concentrations are prevalent in their territory that could use your offerings?
  • What are the overall conditions of those industries and how will that impact sales?
  • What is the current economic environment that your channel partner is selling into?
  • What is your partner’s competitive clout and market share?
  • What have been the revenue trends for your company with that partner?
  • What is the partner’s readiness and willingness to sell your products and services?
  • What is their level of technical and product knowledge competency as it relates to expanding their market share?

As part of your company’s marketing efforts, you should have an estimate of the size of the potential revenue in your partner’s marketplace.  The potential revenue has the following components:

  • The total number of existing and potentially new customers in the segment that your product offering fits
  • Consideration of a ‘typical’ average project’s revenue for your products and services, factoring in the occasional big deal as well as any transactional sales
  • The percentage of market share that your company typically maintains in the marketplace

 Then, there are only four ways of growing revenue available to you and for your partner to grow their revenue with you. 

  1. They can increase current revenue by doing more of what they’re currently doing; penetrating their existing accounts by selling more of the products and services they currently get from you into the same customers and marketplace.
  2. They can develop new business with you by selling the same products and services into new markets
  3. If you are launching a new product, they can sell new products to their existing customers
  4. Sometimes you might ask them to sell new products into new markets; this venture is always the most difficult for you and the channel partner.

In addition, your channel partner will have their own strategic growth initiatives, business drivers, and plans for the next year.  They have financial, operational, personnel, and strategic issues that they have to deal with on a daily basis.  To support their growth, you need to know what these are.

Gaining and communicating all of that information is difficult, but now comes the hard part.  It is up to you to take all of those inputs and all of that information and come up with a “Joint Revenue Objective.”

If you’re looking for a magic formula that will do this for you and put together a joint revenue objective with your channel partner, it doesn’t exist.  As a channel account manager, it is up to you to understand all those issues mentioned above and how they apply to the channel partner, and then be able to combine all of that information, as well as your companies strategic issues and growth initiatives, into an objective that both of you feel really good about; one that you are both willing to get behind, fund, apply resources to, and promote within your companies and in the marketplace.  It is not easy.  Some channel managers are better at doing this than others, but with practice we all get better.

Have the discussions with your partner.  Get them to help and agree to your objectives.  If they help create it, they will own it.

 

Last modified on 6/30/2013 10:11:00 PM
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