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Partner Program – The 14 Steps to Build Your Reseller Channel Program

January 9, 2021 by Daniel Nilsson

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From the January 2021 article, "Partner Program- The 14 Steps to Build Your Reseller Channel Program." Written by Daniel Nilsson.

How can a reseller channel partner programRedirects to external site. help you?

Katrina Razavi, a business development professional, helped a B2B startup increase annual revenue by 1,983% and increase user base by 1,000% within six months…without any upfront costs.

Personally, I have helped a small startup in Sweden acquire 100 of the world’s biggest telecom operators as its customers.

How did we do this?

Yes, you guessed right. We attained success by developing a well-designed Channel Partner Reseller Program.

Channel Partner programs are so powerful that even multi-billion tech companies including MicrosoftOpens in new window and redirects to external site.VMWareOpens in new window and redirects to external site.OracleOpens in new window and redirects to external site.eBayOpens in new window and redirects to external site.MailchimpOpens in new window and redirects to external site.Shopify,Opens in new window and redirects to external site. CitrixOpens in new window and redirects to external site. and thousands of others use it.

Despite its huge success, creating successful partner programsRedirects to external site. isn’t a piece of cake. It takes time, effort, and most importantly, strategic planning. I have tried to make it simpler for you by introducing this 14-step process.

A well-designed partner program, is the formula to power your sales to Legendary levels.Opens in new window and redirects to external site.

Like my other blog posts and presentations, this article is also based on my personal experiences and reviews from industry experts. I am sharing my conclusions here so that you don’t have to reinvent the wheel.

What is a Channel Partner Program? 

The definition of a channel partner program is: “A Channel Partner Program is a strategy to motivate and engage channel partners to create more value for customers.”

Before you start…

Business goals, vision, and executive support

Before you start developing your own Channel Partner Program, there are a few important factors you need to keep in mind: business goals, vision, and executive support.

Creating a professional reseller channel partner program is a big investment of time, effort, and resources. This is why it is essential that the partner program you want to create is aligned with the company strategy and business goals. This is also why it is essential to have executive support before you kick-off the process.

Now that you know what you need to take care of before you start, let’s go on to learn how to create your very own professional partner program.

The Creation is Not a Straight Line

The creation of a Partner Program and Channel Sales is not a straight line. It’s a lovely mess that gets more clear and straight the more you study and develop it. If the world or your business changes suddenly, you may have to start over.

Step 1: Define a value proposition

A solid value proposition automatically gives you an edge. It’s the number one thing to define because it will determine whether people will bother learning more about your solution, services, or product.

Defining a value proposition is about letting people know clearly what they will get out of using your product or service. You can use some tools to define customer gains, pain points, and rank what is more important for them. The next step is always to compare your value proposition with that of your competitors, what the market wants, and available alternatives. Once you have this data, you can define a solid base value proposition.

When you and your prospect customers understand the value proposition clearly, it will be much easier for your channel partners to pitch your product or service to people.

Step 2: Create a customer-centric sales process

Customers now know about your solution. So now what? There’s still so much to do.

You need to understand the entire buyer journey for the customer and design a sales process. What steps are involved in the sales process? How many steps are there? What needs to be done at each stage of the sales process? All these questions need to be answered in detail.

But when you create the sales process, it is important that it is from the customer's perspective. It should be customer-centric.

Step 3: Benchmark competitors

Ever heard of the phrase, “Keep your friends close, and enemies closer.” You must apply it to yourself. Essentially, you need to understand what your competitors are doing.

Try to get a deeper understanding of your competitors' partner programs. What is their target audience? How have they organized it? What benefits are they offering customers? What kind of relationships are they developing with their channel partners? How well is their channel program turning out? What is their structure for channel sales and channel partners?

This data will give you a lot of insights before you even begin offering your partner program and developing your channel sales. You will know what is working and what is not.

Step 4: Define the type of partners

The success of a partnership and channel sales lies in the value each party gets out of it. So your channel partnership largely depends on what value you are building for your customers.

For that, you need to identify and define the type of partners that may be relevant to your business and choose the best among them.

Do remember that a partner is any company or organization that can help you deliver more value to your customers.

Here are a few examples of channel partner types who might be relevant for your business:

  • Value-added Resellers (VAR): A company that resells software, hardware, and/or networking products and provides value beyond order fulfilment.
  • Managed service providers (MSP): A company that remotely manages a customer’s IT infrastructure and/or end-user systems, typically on a proactive basis and under a subscription model.
  • Consultants: An experienced individual who is trained to analyze and advise a client in order to help the client make the best possible choices.
  • System Integrators (SI): An individual or business that builds computing systems for clients by combining hardware and software products from multiple vendors.
  • Original Equipment Manufacturers (OEM): A broad term whose meaning has evolved over time. In the past, OEM referred to the company that originally built a given product, which was then sold to other companies to rebrand and resell. Over time, however, the term is more frequently used to describe those companies in the business of rebranding a manufacturer’s products and selling them to end customers.
  • Independent Software Vendors (ISV): Makes and sells software products that run on one or more computer hardware or operating system platforms.
  • Distributors: A distributor is an intermediary entity between the producer of a product and another entity in the distribution channel or supply chains, such as a retailer, a value-added reseller (VAR) or a system integrator (SI).
  • Agencies: This could be design agencies, marketing agencies etc. They are good channel partners for platform providers of web hosting, web sites and e-commerce sites.

Step 5: Success factors

You now understand the kind of sales process you must design and what type of channel partners will be the most suitable for your business. It is now important for you to understand what are the critical success factors that will enable your channel partners to close deals.

What are these critical factors? Is it a proof of concept? Good support? Pricing structure? Or efficient project management?

Make sure to list all success factors and then rank them in order of importance. Create a plan for each success factor. For example: If proof of concept is important, you must create a plan for how you will provide this to your channel partners. You will need to create instructions and processes and will also have to educate and train your partners on the subject.

In short, you need to create a framework that will ensure your channel partners understand what you have defined as critical success factors and are equipped to achieve them.

Step 6: Define motivational drivers

Everything looks good. You have the right value proposition, sales process, channel partners and have defined critical success factors. But what will drive your channel partners to act on these success factors?

This is probably one of the most creative parts of all the 14 steps. Here, you need to think out of the box. Define what elements can motivate your channel partners and determine what actions you will need to take to help your channel partners become better at delivering key success factors.

Let’s say you have determined that 'proof of concept' is your key success factor. You will then need to educate and motivate your channel partners to convincingly demonstrate the proof of concept to customers. You could also show them how they can reap huge benefits if they do so.

From my experience, there are several motivators for channel partners. Below I list the six most important ones.

  • Money: Many people think this is the primary motivator for channel partners. While this is a common motivator – after all, which company doesn’t want to make money – it is just one of many. You need to make sure that the effort your partner puts in corresponds to the revenue you offer them.
  • Happy customers: When your customers are happy with your product or solution, they are likely to become repeat customers or recommend it to others. This is a great motivating factor for your channel partner (and you).
  • Education programs: We all like it when people invest in us – be it in terms of money or resources. Many businesses develop really useful education programs for their partners, which act as great motivators. But do remember, developing good education programs requires a considerable investment of resources. So if you are taking the trouble to design these programs, make sure they are really good.
  • Amazing sales tools: Giving your partners high quality sales tools of the kind you would give your own internal team is a sure shot way to motivate them because very few channel sales and partner programs offer great tools.
  • Leads: Often, businesses get leads that they pass on to their channel partners. This acts as a great motivating factor too.
  • Certifications: A badly implemented or maintained product or solution is terrible for the business – both for you and your partner. This is why you must ensure that your partner understands your product in and out and has the ability to problem-solve when required. Several businesses motivate their partners by offering them hardware and software certifications. Partners see this as proof that you are invested in their growth. Additionally, customers tend to trust partners who are ‘certified’ by the company (think Apple and Microsoft partners). This is a win-win for you and your partners.

There can be other secondary drivers as well. For example, pushed sales process focusing on extensive follow-up, lead nurturing, and closing deals. Or inspiration by delivering consistent marketing content focusing on inspiring partners.

Step 7: Define the Motivation & Engagement programmatic elements

Motivation & Engagement elements refer to the effort and values you will deliver to channel partners to help them become successful. It also encompasses how you choose to deliver it.

The purpose of constructing Motivation & Engagement elements is also to create a culture of partnership and understanding. It signals that you care about your channel partners and their success.

Here are a few examples of Motivation & Engagement elements.

1) Education platform

If you’re into inbound marketing, you are likely to have heard of HubSpotOpens in new window and redirects to external site., a developer and marketer of software products for inbound marketing, sales and customer service. HubSpot has implemented this strategy perfectly.

You can create an education platform that delivers education and knowledge to your channel partners in the form of text, video, papers, and certifications. Some businesses require their channel partners to complete partner certification to certify their knowledge level. Such certifications may also be important for partners to reach the next level in partnership hierarchy.

Having an education platform for channel partners is great for business because it ensures that your partners are as good as you are in selling your product or solution. When your partners reach out to leads, they will project a good image of your brand and your customers will experience a professionally-delivered sales process.

2) Development forum

For integration partners, it is important to have full access to a technology platform to create new solutions, improve, and manage current solutions. The development forum consists of manuals, APIs, technical documentation, support, and a forum where issues can be discussed in the open. ShopifyRedirects to external site. is an example of a company that does this well. It has great resources for its tech partners.

3) Lead generation platform

The idea here is to distribute the leads generated among the channel partners.

Sometimes, small deals are better handled by channel partners that have efficient sales processes to handle small deals. At other times, some other channel partners may be better placed to deliver value to certain potential customers, increasing the likelihood of them closing the deal.

A lead generation platform allows you to manage all this without you having to put in much effort.

4) Support platforms for channel partners

Channel partners need to have full access to support manuals, instructions, videos, forums, etc. Customer support is identified as a key factor for success. It is important that the customer experiences excellent support during the proof of concept phase and after-sales phase to make sure that deals are not lost.

Step 8: Define responsibilities and expectations

You and your partners are a team. Now it is time to decide who is responsible for what. Focus on customer experience and define all activities and categorize them. The idea is to define roles clearly so everyone is on the same page and understands what part they will be playing in the sales process.

The first step is to define activities that need to be done. Try to make all these activities granular enough so they can all be assigned to either you or the partner.  Also, make sure that you define expectations. What do you expect from channel partners and what can they expect from you?

Now when everything is clear, you can assign responsibilities to your channel partners as well as your own team.

Here are a few things that your partners can expect from you.

  • Deliver pre-qualified leads
  • Deliver professional & knowledgeable support during pre- and post-sales process.
  • Deliver education programs that help the partner to understand the possibilities.
  • Provide a certification program.
  • Provide a best of breed solutions.
  • Create events & programs that help partners to connect and start to build better solutions that provide more value for customers.

And here are a few things that you may expect from your partners.

  • Channel partners will help you grow your business through sales and marketing activities.
  • They must focus on the customer and deliver excellent solutions that deliver true value to the customer.
  • They must be knowledgeable and constantly evolve with the market.
  • They must attend events and connect with other partners with the intention to build improved and new solutions.

Step 9: Define a framework

Imagine how you categorize your friends – some are close, some are casual, then there are those whom you meet occasionally. Defining a framework is like that. It is about organizing your partner relationships.

Partner framework for SMB

If you are small organization and are  about to create your first partner program, I strongly suggest you do not create official levels such as "bronze", "silver" and "gold" channel partners. This is because: 1. It's complicated to create and manage. 2. It costs time, money and resources. 3. It is complicated to explain. 4. For some SMBs, I have seen it creates sales issues.

Even if you have the capacity and resources to create such a complex framework, sometimes your channel partners may not have the internal resources to handle the various differentiations that being a "bronze", "silver" or "gold" partner entails. So just don't.

What you should do instead is to have an internal understanding about: 1. Who is your ideal partner 2. How do you understand and measure if your partner is performing.

This will help you to determine what channel partners you should focus on.

Partner framework for large organizations

Larger organizations have the resources and time to create a more complex partner framework. They can organise the framework in many different ways. It all depends on what works for them.

A good way to start is by defining partner program levels such as “bronze”, “silver” and “gold”. This framework helps organisations identify which partners are more involved in the partner program. These partners can then be given incentives. Some software companies, for instance, give their “gold”partners a lot of free software as a return on their investment in the partner program.

The different partner levels also work as motivation. By joining the education program and getting certified, the channel partner can achieve higher partner status and consequently, get more benefits.

Step 10: Build internal capacities and systems

Now that you have everything strategized and planned for your reseller channel partner program, it is time to make it a reality. Start by creating a list of all those tasks and infrastructure you need in order to build and start executing your partner program.

Create all marketing materials ready including sales presentations,Opens in new window and redirects to external site. brochures, videos, and educational material. Also, implement IT systems that will give technical support to your partner program. This step is essential because it will help you in the long run when your partner list grows.

Here is a list of needs you might have in each aspect of your partner program.

1) About the program—general documentation

  • Partner Program Operation Plan – Resources, time, organization chart, systems, sales.
  • Legal agreements.
  • Internal PowerPoint explaining the program.
  • Account manager expectations on partners.
  • Internal manual for the partner program.
  • Information on how a channel partner can get pre-sales help and support.
  • Information on how to manage leads and what is expected by channel partners.
  • Partner selection matrix.
  • Partner program roadmap presentation.
  • Co-op fund structure.

2) Marketing

3) Education platform

  • Create a specification for an IT-system that can host the education platform.
  • Select IT-system and implement it.
  • Establish training and certification curricula.
  • Produce training material in the form of videos, presentations and text.
  • Create tests so partners can certify their knowledge level.

4) Development forum

  • Write specifications, select and implement a development forum in the partner portal.
  • Make APIs available in the forum.
  • Add manuals and instructions in the forum for how to use the API.
  • Add examples of how to use the API in the forum.
  • Add "Get Started" videos to the forum.

Apart from this, as mentioned earlier, you may need IT-systems to manage your channel partners. The best way, however, to do this is to integrate it into your current CRM system. And the best solution for this would be SalesforceOpens in new window and redirects to external site. and Microsoft Dynamics CRMOpens in new window and redirects to external site..

For IT-systems to enable education management, I would recommend that you use Citrix GoToTrainingOpens in new window and redirects to external site.WebexOpens in new window and redirects to external site., or NetexamOpens in new window and redirects to external site.. There are other good solutions as well such as MindflashOpens in new window and redirects to external site.ArticulateOpens in new window and redirects to external site., and CoursioOpens in new window and redirects to external site.. For support systems, I often recommend ZendeskOpens in new window and redirects to external site. but you can also use SalesforceOpens in new window and redirects to external site. and SatisfactionOpens in new window and redirects to external site..

Step 11: Define how to measure success

Whenever you have objectives, it is important to define the parameters that will decide whether you have achieved your objectives or not. Define the parameters of KPI (Key Performance Indicators) to measure your success.

Make sure what you define as KPIs are from the perspective of the success factors you had defined for your channel partners. Once you have decided what they are, make sure your IT support system calculates KPIs automatically.

Step 12: Develop a marketing strategy

This marketing strategy is for your partners. Use the SOSTAC model for this. You can find its template hereOpens in new window and redirects to external site.. It is clear and easy to follow.

Create a clear target audience because that’s one of the most important things your channel partners need to understand. Use frameworks like RACEOpens in new window and redirects to external site. (Reach, Act, Convert, and Engage), 5SOpens in new window and redirects to external site. (Sell, Speak, Serve, Save, and Sizzle), and 7POpens in new window and redirects to external site. (Product, People, Place, Price, and Promotion).

Step 13: Create a partner selection strategy

You should have a clear idea about who your target audience is for partners, just as you are clear about who you want as your customers. If you are not clear about this, you will waste time, money and effort on partners who cannot bring value to you or to your customers.

Each new relationship is an investment and it is important that you define characteristics or attributes of the ideal channel partner required to address a particular market segment. This will help you to decide what channel partners you would like to invest in and build a deeper relationship with. Define how many partners you should recruit and set a target.

Step 14: Build a focused channel partner organization

Beyond systems, there is the human element to building a successful partner program. It is important that the structure of any partner organization is rooted in the philosophy that members of the partner team remain connected to many different internal organizations in order to deliver desired results.

Building, maintaining and growing a healthy channel ecosystem requires input from all parts of an organization.

9 success factors for your reseller channel partner program

  1. Remember to keep the customer front and center: Every investment you make should, in the end, benefit the customer.
  2. Match your solution to the proper channel: This includes all your marketing material and information.
  3. Communicate often: Make sure that channel partners have all the information they need to become successful.
  4. Monitor and measure the program: There is always room for improvements.
  5. Resist making frequent changes: It takes at least 90 days after a contract is signed before you can expect to see any sales at all. Don’t change your program too often. Instead, focus on your program elements and how to deliver them even better.
  6. Be clear about what the channel partner should do: Make sure that your expectations are clear and that they are aligned with your partner's business model.
  7. Support channel partners before, during and after the sale: You can do this with technical and sales assistance to help them grow their business.
  8. Monitor your competitors: Your competitors will often be pitching to the same customers. So make sure you keep your partners educated & informed about anything your competitors may say about your product or solution and train them to rebut it.
  9. Launch and work with a partner council: This council will represent a cross-section of your channel partners and will help you to keep a finger on the pulse of your channel’s satisfaction levels.

6 potential failure points

  1. Once you have created your program you stop improving it: A successful partner program demands constant engagement and improvements.
  2. Lack of clarity: Make sure that you have truly defined what you want your channel partners to do, and that they are motivated enough to do it.
  3. Geographic diversity: Beyond the obvious differences between mature and emerging markets, there lie governmental, financial and cultural differences. Consider these when designing a first-time channel program.
  4. Investment in systems and resources: Without the appropriate allocation of resources, even the best program can’t come to life. While you can outsource some parts of the program, internal resources are still required.
  5. Diverse channel ecosystem: Each channel partner type has unique requirements, expectations, and perspectives. Be flexible with systems, programs & sales initiatives to maximize investments across a greater partner base.
  6. You have not signed up the right channel partners: The partner you have signed up fails because there is a mismatch between expectations and the partner's business model.

Example of how I built a hugely successful channel partner program

Read my article - How I built a hugely successful channel partner program and you can too (In-depth).Opens in new window and redirects to external site. It's a concrete example of how I built a partner program from scratch in 2015. The partner program was so successful that over three-and-a-half years, we recruited over 30 partners from all over the world who were instrumental in signing on over 100 of the world's biggest mobile operators as customers.

Creating a partner program is not a journey from A to Z. It is a continuous process. You must update your program from time-to-time so that it is in tune with market trends. The essence, however, lies in all the 14 steps that we have discussed. Keep coming back to each of them periodically and I am sure you will never be lost.

Conclusion

So, there you have it…14 steps to create a professional channel partner program. Please remember, an amazing partner program doesn't stop after these 14 steps. You need to continue to improve and innovate your channel program every quarter. The market, your competitors, your offering, and partners continuously innovate, and you need to make sure you keep up.

Keywords

internet, digital, customer, sales, selling, cloud, e-commerce