How To Partner Successfully

By Chet Menzione, Quorum, For, CRN September 07, 2012

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3) Use Your Relationships for Revenue
While initial sales comprise the lion's share of revenue for a solution provider, post-sale training and support account for a tidy sum of ongoing cash as well. However, many vendors don't permit resellers to derive any post-sale revenue of this type, opting instead to capture 100 percent for themselves. Faced with that scenario, resellers have no incentive to maintain the all-important customer relationship.

Engaging in a channel program that permits the solution provider to participate in training and support revenue brings about a win-win-win for all parties involved: The customer is satisfied that its needs are met by a trustworthy business comrade; the reseller earns extra money from post-sale activity; and the vendor can now use the partner's relationship as a springboard to upsell or cross-sell.

4) Insist on Rooting MDFs in Teamwork
Vendors may provide marketing development funds (MDFs) in different ways. More established vendors that have a lot of run rate with their partners may base MDFs on a percentage of the reseller's sales of their product. For example, Large Company X might offer 3 percent of a reseller's annual 2011 sales toward marketing development for 2012.

An alternate approach — and frankly, more advantageous for the vendor and the solution provider in the long run — is for the vendor to fund marketing activities and work directly with the reseller to grow business for both organizations. In this case, MDFs are based on potential opportunities, as opposed to what a reseller has sold in the past for the vendor. Such an approach is especially advantageous for smaller resellers that might not have an established relationship with a large vendor. It also gives the vendor the power to control its own marketing message, with can also help resellers differentiate themselves from their competitors.

While those four elements will help ensure a mutually beneficial, long-lasting partnership, other key qualities in a channel program must not be overlooked. They include partner accelerator and channel incentive programs, good sales tools and a network to share best practices, and involvement in long-term strategy planning.

The concept of the total partner experience (TPE) is another trend among leading organizations to ensure successful channel partnerships (http://www.siriusdecisions.com/blog/for-channel-success-focus-on-total-partner-experience/). TPE refers to a vendor's commitment to review its channel program from its solution providers' perspective to ensure a consistently delivered best-in-class channel experience. Not surprisingly, that also contributes to overall channel success.

Essentially, the solution provider should feel like an extension of the vendor's sales team. After all, both parties' goals to succeed in building a business are closely linked, and at least partially depend on one another for any measure of success.