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Guide to Channel Partner Sales Strategies_blog

Marketing Tools — 28 Oct 2022

Guide to Channel Partner Sales Strategies

What You Need to Know About Channel Partner Sales Strategies

Growth is vital to the long-term success of your business. This is particularly true for retail and ecommerce businesses. There are a number of ways that you can achieve growth; for example, by being granted business start up funding. But the most common method is to encourage sales and repeat customers. 

The key to any successful sales strategy is to build a solid sales funnel. 

What Is a Sales Funnel?

Your sales funnel (also known as the sales pipeline or sales channel) is the route both new customers and potential customers take in your business, from discovery to transaction. The purpose of a sales funnel is to direct your brand message towards as much of your target market as possible while allowing your business to form subtle yet effective marketing techniques. 

Ultimately, the goal of a strong sales funnel is to build your customer base, drive sales and gain revenue. Other benefits include building customer relationships and paving the way for future growth. 

A typical sales funnel includes the sales process but begins with consumer discovery. It might go like this:

  • Discovery: viewing a social media advertisement.
  • Investigation: visiting an ecommerce website to learn more.
  • Problem and Solution: being part of a business’ target market – receptive to the product features.
  • Transaction: conversion to customer by making a purchase.

You may bring partners into your sales funnel strategy through a channel management partner program for the mutual benefits of partnership marketing. 

What Are Channel Sales Partners?

Channel partners are third-party businesses or individuals that are a part of your business’s sales channel. Sales made through channel partners are often called indirect sales. This is opposed to traditional or direct sales where your sales team manages all of your product marketing efforts. 

For example, a craft business might sell its products on its own website. But it may also sell through third-party websites and in brick-and-mortar shops, which benefit financially from any sales. This is an example of a channel partner sale. 

Channel Sales Partners
Source (statista.com)

A channel marketing strategy often includes both third-party partnerships and in-house sales reps. The purpose of this is to reach as wide an audience as possible and to keep some of your channel marketing in-house. Your ideal partner will usually be one that works with your existing team and understands the existing values of your salesforce. 

You’ll need to collaborate with your partners to produce a realistic working plan for your partner relationships. You’ll also want to make sure that you’re choosing the right partners. If you don’t, your sales and working relationship could be negatively affected. 

Communication is key here. You’ll need to have a solid communication plan in place, for example using a business video conferencing system so that you can communicate visually and verbally. 

For faster calls, business phone systems can be useful specifically for your partner management team. 

Partner Sales Compared to Direct Sales

The distinction between partner sales and direct sales is simply a matter of where the consumer comes from when they decide to make their transaction. However, there are several differences, some positive and some not so, which can impact the success of your sales program. 

These are some of the pros of partner sales over, or in conjunction, with direct sales, as well as some potential pitfalls to avoid: 

Pros:

  • Sales: when used in conjunction with direct sales, a channel partner strategy can increase business revenue by driving new sales. 
  • Larger audience: access your partner’s audiences and test new products in different consumer ecosystems. 
  • Brand influence: working with a recognized brand name in your industry can establish your business as trustworthy. This is great for future collaboration and gaining promotion in your field. 
  • Different styles: partners almost invariably have different styles of selling that can help to meet customer experience expectations and bring in a new demographic of customers. 

Pitfalls:

  • Less control: when partners are making sales on your behalf, you may have less control over how your products are represented and the sales process. 
  • Management: a large partner program is a complex operation to manage and may result in confusion or miscommunication if not done correctly. 
  • Different styles: yes, this can be an amazing positive but also a pitfall, depending on your industry and brand message. Make sure that your partners’ sales style doesn’t clash with your business ethos or brand message. 

Most of these pitfalls can be avoided with careful management and a cohesive marketing team. 

Benefits of Channel Partner Sales

Channel partner sales can carry huge benefits to businesses if managed correctly. These are some of the major advantages of partner sales within a sales channel. 

Reaching new markets

The major benefit of partner sales is the ability to reach new markets. When you use a partner sales strategy, you effectively gain access to your partner’s audience which will likely have a significant overlap with your own. However, their audience may contain demographics that you weren’t previously reaching. 

If you find that these demographics are receptive to your product, then you may be demonstrate enablement to drive further sales here. 

You might also find that you’re reaching the same audience on new platforms. 

For example, consider a sustainable beauty brand partnering with an influencer in their field on Instagram. This business is likely to have a similar audience to this influencer, but they may not be communicating with them effectively on Instagram. Influencers specialize in social media promotion and have skills that this small business might not.

New markets
Source (statista.com)

Working with partners introduces new skills, audiences, and platforms into a sales and marketing team. 

Mutual Leverage

Channel partnerships are intended to be mutually beneficial. You and your partners can leverage one another’s audiences for mutual promotion and collaboration. 

This is especially true of distribution partners, for example, ecommerce service providers, third-party sellers, and wholesalers. 

For example, an ecommerce platform benefits an online business with its service, and the business benefits the platform with its custom. 

Gentle Marketing

In environments like social media apps, consumers can be overwhelmed with marketing content. In oversaturated markets, gentle marketing is a vital tool. 

Consider a third-party seller as an example. Customers on this site may be unaware of your brand, but their interaction with it on the third-party site may encourage further direct or indirect sales. 

The Difference Types of Channel Partners

There are a number of partner types that you might use across the sales cycle. This means those channel partnerships are a flexible way of engaging with your industry and driving sales. You can tailor partner sales initiatives to suit your business model, including the size of your team and the resources at your disposal. 

Distributors

Distributors are companies that distribute and ship orders on behalf of a retailer. These sites can differ between wholesalers and third-party sellers by the degree to which they’re involved in listing products. They usually act as a middleman or sales broker between the business and the buyer. 

Distributors Channel
Source (statista.com)

They are usually responsible for shipping the item to the end customer and they may make minor modifications to the product or service to suit their specific market 

Third-party distributors can be a low-cost option for growth since you can make sales passively and at any time of the day, particularly if you’re operating internationally. They can be especially beneficial for businesses with a large capacity for marketing and growth but little technical expertise or physical storage. 

Value-Added Resellers

Value-added resellers (VARs) sell a company’s products or services to end-users directly. They generally sell at a marked-up price, with the anchor product bundled with additional services. 

These additional services are known as value-added products. These sellers may make additions to a product or service to suit their audience.

Robust Technology

Because they make changes or additions, chances are that VARs are introducing your product or service to new consumers, even if it’s a small number. 

Wholesalers

Wholesale partners typically sell large quantities of a product using economies of scale, meaning they can sell items at a lower per-unit cost. They usually sell commercially to other businesses for use in a different product or for resale after modification. 

The benefit of wholesalers is that they typically move large amounts of stock. It might not be the most profitable sales route but, depending on your industry, it can be a reliable way of moving sizeable chunks of inventory. 

Referral Partners

Referral marketing transforms your customers into your salespeople. It’s typically a word-of-mouth marketing system whereby customers recommend a product or service to their social network. This can be done verbally or through social media. Businesses can encourage this by offering incentives for customers who refer others. 

Because this is often done outside of a professional environment, it’s important to measure performance metrics regularly, often known as key performance indicators (KPIs). One of the ways you might do this is to create templates of typical customer personas and track how these customers interact with your business. You can use a data tracking tool to help you with this. 

This type of channel sales partnership can come with a high-value proposition and high return on investment (ROI) without much initial financial input. 

Influencers

These are the partners that most people have heard of. However, they’re just one type of channel partner. 

Sales Process

That said, in the right industry they’re incredibly effective at driving sales. 

Consider a travel influencer on video platform YouTube as an example. This influencer might have a seven-figure following from sharing their international travel experiences online, so they would be perfect for a tour startup to partner with. 

For an agreed-upon price, the influencer will share the name and benefits of this tour company with their audience base. The influencer’s name holds weight within their industry, so their opinions are likely to be trusted. 

This company may then notice increased sales from the influencer’s audience base. 

Affiliates

Similar to referral programs, affiliate marketing programs use third-party individuals to refer customers to a business. However, affiliates tend to be marketing professionals or individuals with an understanding of the industry beyond a customer’s perspective. 

Turbocharge

Affiliate programs are generally more structured than referral schemes. They may bring higher returns for a company as they employ professional marketers, but they may also involve higher initial costs. 

How to Optimize Your Channel Partner Sales Strategy

Once you’ve established your partner program, you need to understand how to make the most of it. Here are a few tips on how to build your partner sales strategy from the ground up, ensuring a solid foundation. This will help you to manage any future issues effectively and quickly. 

Know Your Audience

This is probably the single most important aspect of channel partner sales. Your audience’s tastes and habits are what should determine who your partners are. If the goal is to attract further customers and encourage repeat purchases from within your industry, then your partner’s audience is key.

Social media is your friend here. To conduct a quick customer audit, try the following steps:

  1. Identify between three and five competitor businesses or potential partners
  2. Using their social media presence, identify mutual connections
  3. Research what content is receiving positive reactions – is it similar to yours?
  4. Distinguish what values their audiences are expressing
  5. Use this information to build an ideal customer profile (ICP), cross-matched with that of your potential partners. 

Understanding your audience should make the process of finding new partners straightforward. It’s a waste of everyone’s time if you work with a partner based on brand recognition or audience size alone. Your partners should work for your customers and for your business. 

Know Your Business

As important as it is to know your audience, you also need to know your business. You need to be at a certain point in your business cycle to be ready for channel sales. You should be able to:

  • Demonstrate and replicate sales success 
  • Fulfill additional orders and support partners
  • Meet any costs associated with partnerships
  • Define why you’re using partner sales

All of this can help to protect you against fluctuations in any of your partnerships and aid plans for future growth. 

Set Clear Goals

Important for any business decision, setting clear goals is particularly important when it comes to setting up a partner program to make channel sales. 

The reason that goals are important is that you need to have something concrete to work towards. This helps your whole team to stay focused and work collaboratively. 

You might want to try:

  • Using data: set a number of sales or a percentage of growth to work towards that’s ambitious but achievable.
  • Sharing: don’t be afraid to share your goals with your partners so that they know how best to approach helping you and working with you. 
  • Break it down: break down your goals into actionable items by weeks and months, even by days if you’re tracking your progress tightly. 

Try not to get bogged down in setting goals. You should make sure to review your goals regularly across your sales channel to stay on top of your progress. 

Research

Research into potential partners is crucial to securing strong working relationships and driving sales across your channels. Here are some of the things that you should research before agreeing to a sales partnership:

  • Brand ethos and message
  • Cost and value proposition
  • Other clients or customers
  • Any additional legal obligations
  • Technical needs, like data transfer
  • The size and demography of their audience base

You should look in-depth at this research so that you choose the partners that are right for you and likely to put your business in front of the right audience. Make your expectations clear throughout the onboarding process to avoid a clash of values or communication styles. 

Consistent Communication

You need to be communicating regularly and clearly with your partners. Your business may have a large network of partners in different capacities, which makes communicating with them all at once near-impossible. 

Your team should devise a system to track your partner communications and assign tasks to team members based on availability and knowledge. Make sure that your partners are aware of your expectations. Be honest with one another about any issues and share regular updates on sales and customer interactions. 

Smaller companies still need to stay on top of their partner communications, although they’re less likely to have a large number of partners across different channels. 

Strong Management 

Partnership management is essential to successful and consistent growth from channel partner sales. You need to define what’s expected from each partner and from you and information on cost, timelines, and projected sales. 

As your customer base grows, you’ll also need to engage seriously with customer relationship management (CRM) systems. These are usually hosted by a specialist company. Your team can then track all customer service interactions. 

Management helps to avoid problems that come with growth, including missed orders, supply delays, and overstretching your team. 

Final Thoughts

Using a channel sales model in your business and its marketing can be an incredibly rewarding venture. Channel partner programs help to boost your team’s sales performance and establish good working relationships for your business in your industry. 

Take some time to understand the goal of your channel sales strategy and be sure to bring on new partners as a result of this very understanding. 

Finally, try to find out about support with partner management to make your channel sales partnerships run smoothly and be beneficial for all parties. 

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Jenna Bunnell - Senior Manager, Content Marketing, Dialpad

Written by

Jenna Bunnell is the Senior Manager for Content Marketing at Dialpad, an AI-incorporated free conference calling system that provides valuable call details for business owners and sales representatives. She is driven and passionate about communicating a brand’s design sensibility and visualizing how content can be presented in creative and comprehensive ways. Check out her LinkedIn profile.

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