As many serial entrepreneurs know, revenue and customer attainment is the key to success for all companies. However, reaching and winning new customers is challenging – especially for young companies. Gaining awareness and developing trust with buyers can be costly and fraught with error.
An alternative path is to develop relationships with ‘channel partners’. Simply put, this is a way of reaching end customers through their relationships with trusted companies from which they are already buying other products.
In Silicon Valley, channels or partnerships are often the first paths to market for a startup or growth company. To determine if this sales strategy is right for your company, start by talking to your current or potential customers about how they purchase similar products and services. Then identify ways in which your offering can complement the offering of these companies already selling to your target customers. potential partners’ current product line.
While a channel strategy requires time and investment, succeeding in this model is less costly or prone to failure than building a direct sales team. One single channel partner may have 5 – 5000 sales people which can extend the reach of your company – without the cost and risk of building a large sales staff.
In the words of Johan Attby, CEO of FishBrain and Swedish Founder of the Year knows, “My previous company, TiFiC had direct customer opportunities in the US. Although we could have built a direct sales and support team, we decided to invest in building partnerships. Ultimately, the channel strategy of leveraging these established companies was critical to our successful and lucrative exit for TiFiC.”
Keys to success with a channel partner strategy are:
- Identify the areas in which your company can provide added value to the partner through additional revenue, differentiation and customer loyalty.
- Make it easy for the partner to market, sell and implement/support your company’s products.
- Minimize the risk the channel organization is taking to represent/sell your product through training, support and sales enablement.
- Patience – building channel relationships is like growing a garden – you as ‘the vendor’ plant the seeds, water, take care and keep believing in the benefits. One day you will then see rapid growth in channel sales as a result of your efforts.