How do I scale through the channel?

By Mike Martin and Chip LeBlancInsights

Effective channel scaling can mean different things to different people at an ISV startup or technology company depending on your job role. A simple definition for “business scaling” is to increase revenue at a faster rate than cost.

This question most likely comes up in relation to your channel partner strategy or channel partner sales strategy, especially if you’re a startup or tech company that needs a plan to secure additional funding to scale.

But the answer isn’t clearcut. Some business leaders may lean towards lead generation or joint partner marketing for their channel partner strategy. Others may prefer to work with larger sales organizations at OEMs, systems integrators, cloud providers, or value-added resellers to help them achieve scale. Still others may think about the need for more automation like partner relationship management tools.

Startups and technology companies often race ahead with a channel partner strategy because a sales leader “knows somebody” who has worked in the channel in some way, shape or form. And while that person may be well versed in two-tier distribution, he or she may know very little about building a channel ecosystem model with multiple partner types, incenting non-transacting influencers, building alliances or leveraging marketplaces.

Building your best channel partner strategy or ISV partner program requires defining the value impact of business scaling for your organization with a plan to get there. Otherwise, you risk wasting time and effort investing in the wrong types of partners and missing your financial targets.

Consider these three questions before you start your channel journey:

  1. What gap are we filling?

A channel partner strategy works best when the value you bring to your partners—not your joint end-user customers—is clear. Resist the temptation to think your potential partners can’t “do it without you.” Instead, research their capabilities and other partnerships they have or are pursuing to help you hone your channel-partnership value proposition.

Come to the table with your best channel partner strategy or ISV partner program that includes an ecosystem model. This means contractual frameworks by partner type (e.g., resellers, managed service providers, influencers, and others), onboarding and operating processes and procedures, revenue accelerators and defined key performance indicators (KPIs) for program accountability. This will make your channel program offering more attractive to your potential partners.

  1. There’s no “I” in “we”: are we truly working in partnership?

When the revenue pressure is on, recognizing that a partnership is a “we” and not an “I” is an important first step for sales leaders. A defined channel strategy with visibility and accountability is the glue for effective partnerships.

Automation should also play a key role in the day-to-day management of your channel program. This will help keep sales leaders and their teams focused on revenue-generating opportunities instead of administrative tasks.

For example, 40% of respondents in a recent Launch GTM poll said that the #1 reason their channel partners weren’t transacting more was due to a lack of joint business planning. Consistent communication and quarterly business planning (QBRs) are other important ways to accelerate partner engagement.

  1. Do I have a plan to test market my channel approach?

Before you go “all in” on a channel route to market such as resellers or marketplaces, make sure you have a plan to test market your strategy.

Using a channel automation platform like Launch GTM can help you figure this out quickly. The Strategy and Program Development modules help you model revenue by partner type (such as reseller or managed service provider) to determine your most profitable routes to markets. The Channel Program Operations modules enable you to launch your program in as little as 10 days, and the Partner Activation and Acceleration modules provide you with business-scaling tools such as joint-investment templates.

A final mistake is to avoid is investing too quickly in channel tools such as partner relationship management (PRM). In general, PRM tools are limited to a single route to market and do not address upfront strategic planning nor global program accountability—an absolute killer for successful channel relationships and hitting revenue goals. Take the time to define where you’re going before you embark.

To learn more about how Launch GTM and BD Methods work together to help you create your best channel partner strategy or ISV partner program with the BEST Go To Market partners, contact us. We can help you build and launch your channel program in as little as 10 days.

Read about the authors:

Launch CEO Mike Martin

BD Methods Founding Principal Chip LeBlanc