Avoid the Top 10 Channel Mistakes

By Diane Krakora, CEO

On a plane, train or even Uber I’m regularly asked, “so, what mistakes are we making in the channel?” Okay, so not just anyone asks me this question. But at any channel event or conversation with someone who is even tangentially related to partnering I rarely have  more than a 15-minute conversation before this question surfaces. I typically call to mind this handy checklist of channel mistakes, which unfortunately hasn't changed much in recent years. It’s easy to remember them because –  regardless of industry – most companies fall prey to at least 3 of these mistakes.

Let’s do this old-school David Letterman style. Count down ...

The Top 10 Mistakes You May Be Making in Your Partner Program:

1. You set it and forget it. Channel partners produce sales leverage and investments in your partners produce an exponential return. However, there has to be an investment. Correction – a sustained investment. From financial incentives, to account management and enablement activities we see the more you put into partnering the more you get out of it. You can’t “set it and forget it” with the channel.

2. You measure partners on volume. Best-practice companies not only incorporate value-based metrics such as certifications, specializations and customer satisfaction into their partner performance measurements, but have them as the leading metrics. Always keep value, not quantity, in mind and maybe it's time to rethink what you're measuring.

3. You treat all customers the same. For example, small customers have different needs than enterprise customers and thus are best addressed with different channel partners. Expand the types of partners you have to reach different horizontal and vertical market opportunities.

4. You treat all products the same. Different types of partners are appropriate for products at different stages of market adoption. For example, leverage distribution at the later stages of adoption when you don’t need the immediate feedback from a small set of customers like you do in the introduction stages (see Geoffrey Moore's "Crossing the Chasm" for more on market adoption stages).

5. You prioritize discounts. Instead of prioritizing a discount-off list for reselling your hardware or software as the primary driver for partner engagement, consider that partners make most of their money (from 30 – 60% of their margin) from services.

6. You expect partners to market for you. Partners do a great many things – influencing the selection criteria, designing the solution, driving the brand decision, installation and support – among many other actions with the end-customer. But only 1 in 100 can execute effective marketing campaigns. Do not leave demand generation exclusively in the hands of your partners.

7. You hold on tightly to your internal processes. If you want partners to sell, you need to streamline your processes and policies to be easy-to-do-business with. 30% of partners sell a competitor's product because the process with the preferred provider is too complicated. Don't give partners a reason to sell for a competitor; focus on making doing business together easy for them, not just for you.

8. You drive partners to sell as soon as they’re signed up. We all want partners to sell our solution – they are the primary connection point to hundreds if not thousands of target end-customers. However, success (measured as happy customers) requires partners be fully enabled. This means they can independently initiate and complete the sales process AND effectively implement and support the customer solution. Pushing partners to sell before they are enabled results in unhappy customers and partners selling only on price (because they won’t understand your key differentiators).

9. You stop at technical certification. So you agree with #3 above – partners need to be trained before they can sell. However, stopping at technical certification is not enough to enable a successful partner. Consider expanding enablement to include sales/prospecting skills, industry expertise, service delivery skills, marketing skills (#5!) and even business acumen.

10. You focus on driving sales. What?! Yes, I said several times above we want partners to drive sales. But what do they want? Partners want you to understand and focus on their profitability. At a 5% net profit margin, one more $100,000 sale might produce $100k to you, but only $5,000 to the partner. However, every dollar of cost-saving produces a dollar directly to the partners’ profit. Focus on helping your partners increase profitability with your products.

Diane Krakora is CEO of PartnerPath with two decades of experience defining the best practices and frameworks around how to develop and manage partnerships.