Ok, I get it. Enough with the emails telling me to stop talking partners and start talking channel. For the uninitiated with this blog, my bias is towards partner purity. In other words, I use the word Partner when talking about an organization that impacts 2 or more departments within a company, such as marketing and distribution, or operations and finance. Forget that I wrote a book on this subject. I´m clearly in a minority for companies with less than 10 employees. A channel partner IS a partner, it just happens to impact a single area-sales. Not bad of course, just one dimensional. But as I say, I GET it. No more emails. I´ll start covering Channel Partner activity starting now.
Channel Partner 101
A product needs to get to market. A channel partner gets the product to market for you faster, cheaper, and better than you can do yourself. Further, a channel partner has the service, support and systems in place to ensure a high degree of customer satisfaction. That´s the good stuff. The bad stuff is that to take advantage of the channel, and manage more than 5 organizations, you, and your company, have to make it very very easy to work with you. That´s what a Channel Partner Program, or Partner Program as it is normally referred to, is all about.
To back up, here are a few basic questions answered.
Can businesses with fewer than 5 employees create a channel?
Absolutely. Leah Mamone, CEO of MetroMamma started recruiting her Retail Distribution Channel at a trade show in Las Vegas. She rented a booth for 2 days, paid $1,500 bucks and by the end had 9 outlets carrying her fashionable baby carrier. She has one other employee, her co-founder. Now, less than one year later, she has 3 international distributors and at the last event, held in February of this year, signed over 30 retail channel partners in one show.
Is recruiting a channel expensive?
Depends on the industry and the product. A former client in the technology industry called with eight people and a product in the $50K range needed to identify, qualify and recruit (e.g. sign) potential channel partners. We hired an agency to do this (a subject of another blog), recruited 12 strong channel partners in 45 days, and by day 120, the revenue from the channel alone was over $200K. The cost was about $50K. This was expensive, but the one time cost was well worth it, paying for itself in short order. In the situation of MetroMamma, the cost of entry was much lower.
What about maintaining the channel? Is it costly, and who does it?
This is where the word Infrastructure gets bantered around. Infrastructure in the world of channel partners means: systems, services, software and support. The 4 s´s. To make sure all partners are treated fairly (and you don´t get sued for discrimination in business practices-a hot area right now in the legal world), you need to have a published program. This is usually provided in outline form pre-partner sign-up, then the full program details are delivered once the partner is on board. If you create this in-house, it´s a lot less costly than hiring a firm, but then again, a professional services firm is going to nail every critical point, whereas an internal person may miss something.
What about software to manage the channel?
Whew. A big, wonderful, multi-session blog for this one. So many products existing, and there are 2 worlds-PRM-Partner Relationship Management software CRM-channel Relationship Management. The former more complex than the latter. Don´t confuse Customer Relationship Management software-this is all about sales I won´t digress on this any more, other than to say you aren´t going to take advantage of the software until you get more than 25 channel partners on line-and your excel spreadsheet is ripping at the edges. I will say this if you are raring to go-explore Extranets, http://www.channeltivity.com/solutions/channel-partner-portal-extranet.asp, where your partners can access their accounts, the activity and view any other postings. A good system will have both an intranet (internal, company-employees only) and the extranet (partners) so you have an integrated system.
Questions or subjects you want me to cover for the channel? Email me at firstname.lastname@example.org