Running a partner channel is a bit like running a baseball organization. In baseball you primarily see the big league talent, but that’s the tip of a big mountain of ice. The minor leagues constitute the majority of any good organization’s baseball effort for the simple reason that the big leagues have an insatiable need for talent. The more talent that an organization can develop in-house without going to the veteran free agent market, the better.
A channel organization is like that in some respects. The vendor has an unquenchable thirst for talented partners who can take the vendor’s products to market, implement and service them, and generally represent the organization and the brand in a credible way. Also, the channel, like single A baseball, is a great proving ground for emerging talent. A vendor might not expect a small new partner to provide significant new revenue right away, but as in baseball, the emerging talent is the future of the organization and a good reason to offer programs that nurture it.
So how do you accomplish this without alienating your established partners who are generating the lion’s share of revenue? Offering the same discount levels to emerging partners who might buy limited quantities would only upset the established partners and it probably wouldn’t do lot of good either. Without the headcount and infrastructure to add appropriate value to the vendor’s goods, a small partner might simply resort to wholesaling the goods, which would likely further alienate the major partners.
Regardless, a wholesaling arrangement isn’t even what a new partner is typically looking for. These prospects—to use a baseball term—are trying to build new businesses and assistance along that dimension is more likely to help both the vendor and the new recruit. This means almost everything but big discounts are important. To be fair discounts may be important too, but they are at the end of a long chain of events that require marketing development funds, co-branding, product and sales training, leads, deal registration, and more.
In baseball new recruits can expect to join a team and to be cared for and nurtured 24/7 as they develop their talent and play games. This is a good place to disconnect baseball and the channel because no vendor no matter how benevolent can afford the time and resources needed to build up partner prospects. This being capitalism, it’s reasonable to expect the partner to shoulder most of that responsibility.
This is another reason why building and maintaining appropriate and adequate partner relationship management systems matters. PRM is not just for managing your big and successful partners, it’s also a mechanism that implements your procedures and processes for developing new ones efficiently and economically. The PRM system helps make developing new talent affordable to the vendor. It’s also an important sales tool for the vendor.
Consider this. If you are new company interested in a channel relationship in a market space, you’ll gravitate to the vendors who can demonstrate an interest in making you successful. You’ll want favorable pricing for sure, but if that’s all you look at, you’re probably not ready to join a channel because you don’t really understand what’s most important to your success. So the desirable new partners are the ones that see value in your channel apparatus and you should make every effort to ensure that they see your value.
The same strategy can also be useful in recruiting larger partners, especially if you need to take them away from a competitor. The quality of your channel programs is on full display in your PRM system and it’s accessible all the time. In either case, the message to your partners and potential partners is that you know how to help them be successful. It’s not much different from a vision of the World Series to a minor league player.