Channel Management Program

"Key considerations for developing a partner sales channel"

Channel Management is another sales and marketing phrase that is thrown around as if everyone knows exactly what it means. In reality it is a complex concept that encompasses a lot of different considerations.

Channel management is the process by which your company creates formalized programs for selling and servicing customers within a specific channel in a positive way. Very similar to running a small business, you have to know your company, your channel partner's business, and your customer's issues.

Your implementation plan is the description of how you will take your product or service to market. It includes how you develop and grow your revenues, identify key customers and communication channels and how to create ongoing value.

Sales channels come in many descriptions and shapes. For the purposes of this article, we will focus on selling your product or service using some type of partner organization and not direct selling.

To have a successful channel management plan, these are the key issues to be considered:

• Segmenting and Recruiting
• Develop a Revenue Stream
• Align Your Companies
• Grow the Relationship

Segmenting and Recruiting

The first step is to segment your channels around characteristics that are important to your business. These can include customer needs, buying patterns, and other critical success factors.

Next, determine what role and function the partner will perform. What skills and capabilities do they need to be an ideal partner? What revenue do you expect from them? How many partners do you need? Where do you need them? Will you be important to their business so you will get time and mind share from them?

The final question, what is it worth in terms of discount and margin to have the partner perform these functions. These are all critical questions you need get answered if you are going to build a successful program.

Armed with the answers to all your questions you can begin to customize your channel management program. Put together a target list of partners along with your recruiting package, policies, and value proposition, and start making contact.

See the article on recruiting channel partners for a full discussion of the issue.

Develop a Revenue Stream

With your new partners on board, you can focus on generating a revenue stream. There are two stages to consider in developing revenue through your new partners. One is the channel marketing plan, and the other is the channel sales plan.

The channel marketing plan identifies how you and your partner build awareness and interest in the marketplace for your products and services. This plan also helps build your brand image in the marketplace.

Your marketing plan may include things such as public relations, press releases, website portals, collateral, tradeshow participation, co-op advertising, and more. Your plan should include one-on-one marketing, one to a few, and one to many marketing. Consider everything that your partner is looking for to deliver a "whole product" to the market so they can be successful.

See the channel marketing article for a full discussion of the subject.

The channel sales plan, defines how you will address opportunities, share information, and build preference and action. It details how end customers will purchase from the partners.

A good channel sales plan outlines how you work jointly with the partner during the sales process. You should have a specifically designed and agreed upon sales process map that details the steps in your sales process. Be sure to consider the outcomes of each step, who is responsible, customer evidence that each step has been achieved, and next steps to be taken.

See the channel sales article for a full discussion.

Before leaving the subject of developing the revenue stream, you need to consider some way to track, report, and communicate your deals internally and with your partner. That could be as simple as a spreadsheet or it might have to be a shared CRM software tool.

Make certain not to over burden either company with data entry. Plan to gather the key information necessary so you can track results together. See the article on CRM for a full discussion of the subject.

Align Your Companies

The key to successfully aligning with your partner companies is to link agreed upon processes, roles and responsibilities. Link together people or processes from product development, research, marketing, admin, sales, operations, finance, legal, and support between appropriate business groups within both your companies.

Make sure your plan addresses the areas that are working well to sustain them, as well as addressing the areas where there are gaps. The more people you have engaged with your channel partner the tighter the operations will be over time.

Grow the Relationship

The next key part of channel management is the partner relationship. Your relationship is the sum total of all of the personal relations and joint experiences between your two companies. To grow the relationship, here are a few key things to consider:

• Know how your partner is organized
• Understand their key business issues
• Know the key decision-makers

Finally, it is important to know how your partner makes a profit. Every successful relationship is a win-win. The better you can help your partner make a profit, the better the relationship.

In conclusion, a successful channel management program can be very beneficial to your bottom line. If you recruit and segment your partners, develop a revenue stream, align correctly and grow the relationship, your probability of success increases significantly.

Related Articles

• Channel Partner Planning
• Recruiting Channel Partners
• Channel Marketing
• Channel Sales

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