The race to the cloud is revolutionizing sales channels for product vendors, and now organizations and their channel partners must adapt to thrive in the changing marketplace.
It is critical to define and execute a forward-thinking channel strategy. This includes determining which of your channel partners will become strategic partners and which will become integration partners. Integration partners provide technologies to complement and enhance your offerings, whereas strategic partners collaborate with you in product development, resource deployment and standard setting. The following actions will help ensure successful transformation in channel partnerships:
- Identify ways to support channel partners through the new business model of servitization
- Transform transaction-based channel partners into strategic partners
- Build trust with your partners so the relationships yield more value
Transforming Channel Partners to a Servitization Model
Undertaking a growth volume strategy of selling products and services through channel partners requires thorough preparation. Having a clear understanding of your channel partners’ needs and expectations is the first step in determining which channel partner is best suited to be a strategic partner in the future. When creating your strategy for servitization, follow these key steps:
- Identify exactly what your company needs and expects from the channel partner (be sure your list includes task/deliverable needs as well as relational expectations).
- Identify which channel partners can grow into strategic partners with guidance and investment from you.
- Establish trust with your channel partners by understanding their needs and expectations.
- Grow trust by sharing your task/deliverable needs and relational expectations with your channel partner, prioritizing goals and deliverable so it is clearly understood which needs are most important.
Turning Transactional Channel Partners into Strategic Partners
The greatest opportunity for innovation and increased market share is found in working strategically with your channel partners. Through synergy and collaboration these partnerships will allow your organization to drive new, exciting solutions to the marketplace. Sharing insight and ideas is a key benefit of working with strategic channel partners. Strategic partnerships break through old boundaries and help companies see things from a new perspective. For companies, channel partners will fall into two categories:
Partners with whom your company shares resources, develops products, and helps raise industry standards.
Progressive organizations that develop adjacent technologies that can be integrated with your company’s products and /or services
Developing Trust With Your Channel Partners
Working with a strategic partner rather than a project-basis partner requires trust, aligned ambitions, loyalty, communication and synergy. Although the focus is usually on market share, mindshare is equally important. The following are several ways in which market share and mindshare can be improved.
- Establish trust: Trust is reciprocal in nature. In order for channel managers to be trusted, they must keep their promises, act with integrity, and protect their reputations. For your part, keeping promises means you need to announce what you are going to do, execute, and then inform your partner when it is done. Good communication is an integral component of trust.
- Use the right communication: Communication is an important factor in achieving mindshare. Poor timing, secrecy, and the inclusion of irrelevant information often leaves partners confused and dissatisfied–not only with communication, but with the relationship itself. Begin by conducting an audit of your partner’s communications. Are they a genuine dialogue, or merely a monologue? Are messages relevant to individual partners, or are you employing a “one-size-fits-all” blast? Do you have a partner portal? Is there an immediate response to partner inquiries, combined with easy access to information?
- Increase loyalty: Loyalty is primarily linked to the partner’s perception of value in the relationship. Incentive and reward programs will certainly improve loyalty, and engaging them early in planning quotas will remove the feeling that goals are arbitrary.
- Choose partners that share your ambitions: There needs to be harmony in the ambitions of your company and those of your partners. Do you share common goals? Are your territorials and market motivations the same? A partnership with shared ambitions will have little conflict, further leading to a deeper level of engagement.
- Forge greater synergy: Synergy is all about cooperation. This is a key element in dictating the level of mindshare–cooperating on large-scale projects and in the marketing push.