Channel partnership is a lucrative business model. They help you bring your company’s products and services to the market, allowing you to leverage them in more powerful ways than one. From extending the market reach, to adding additional sales resources, to taking advantage of existing customer relationships that the channel partners bring to the table, sustainable channels can fuel business growth and pay dividends far into the future for both, the service providing company and the channel partners.
But here’s the caveat — the benefits of channel partnerships are strongly felt mostly when it’s a long-term alliance rather than a short-lived transaction. In other words, if your partners don’t stick around for long, it can throw a wrench in your growth plans. And, this is exactly the problem most companies face when they set out to build a business around a channel sales model.
Opportunities and bottlenecks in channel partnerships
In India, channel partnerships are becoming even more crucial as companies are increasingly eyeing the rural markets and SMEs. With companies locking horns to penetrate and establish a wider reach in these segments, forging sustainable channel relationships have almost become a business imperative.
The reason for this growing competition is clear — the total consumer spending and per-capita GDP in rural India have been outpacing growth in the cities for nearly a decade now. The Indian SME sector, on the other hand, has been undergoing monumental shifts in terms of growth and its contribution to the country’s GDP, which is estimated to reach 22% by 2020. Playing the lead role in India’s growth story, SMEs have boosted the culture of innovation, entrepreneurship, and employment generation, providing employment to over 80 million (Source: SME Chamber of India) people.
Thanks to these trends, businesses are aiming to capture a lion’s share of the rural market / SME “pie” to increase their profitability and tap into new opportunities.
However, often organizations face several roadblocks in the way. Besides poor sales and distribution infrastructure in rural areas, difficulties in establishing profitable relationships with capable channel partners leave most companies grappling with challenges. Equally frustrating is the issue of loyalty (or lack thereof). Companies struggle and vie for good channel partners, only to see them get lured by competitors promising bigger and better deals.
Another challenge lies in the conflict of interest as the channel partners work with multiple vendors offering the similar products and services. For most companies and service providers, the issue arises in driving their partners to promote and sell more of their product instead of a competitive brand.
To overcome these obstacles, companies need to engage with their partners to sustain their loyalty. Demonstrating their commitment to building mutually beneficial relationships, providing training and paying off loyal partner relationships with incentives – are potential ways to foster long-term alliances with channel partners.
Transform your channel partnerships from one-time transaction to a long-lasting relationship
Through our experience of working with a diverse set of channel partners, we’ve realized that for a business to operate successfully under a channel sales model, the key is to build an effective network where the companies rely on each other to position their products, services, and brand in the marketplace. This is not an overnight job. In fact, channel sales usually take some time to take off, the reason being that partners have a set of priorities which are often different from those of the service provider.
Know your partners well
The first logical step towards building strong channel partnerships is assessing the partner’s potential capabilities and priorities to weed out those that are not aligned with your values and expectations.
Having a process to vet the channel partners helps you answer critical questions like — which partners live up to our expectations? Which ones have a good mutual communication with us? Which partners can help us drive and manage changes in the business environment? It’s important to identify partners with maximum potential, keeping in mind the larger picture rather than simply focusing on immediate transactions.
Getting to really know your potential partners puts you in a better position to determine which partner you should move forward with and develop a deeper, long-term business relationship.
Support and motivate your channel partners
In order to distribute your products faster through the channel, it’s essential to educate your channel partners by sharing sufficient marketing material, providing in-depth product training and offering incentives. Parallely, it’s also important to have a sustained engagement to keep the motivation level high. Unless you continuously engage with your partners, you will not have high brand recall among them, and that will either encourage them to sell another brand or they will miss an opportunity to sell your products.
Vodafone Business Services has a robust channel partner ecosystem, comprising several channel partners, resellers and own retail partners, to build channel partner strength and loyalty. The channel partner onboarding starts with an evaluation form to validate the readiness of a partner to sell entire ICT solution, an induction guide for onboarding new channel partners, followed by multiple sales tools (ROI and Cash flow tool, Sales Force, System Access Partner Portal, Partner Operating System Loyalty Program, etc.) for the partner community. Such engagement programs help increase channel productivity, create higher learning opportunities and build a strong brand loyalty with channel partners. By developing communications solutions and technology roadmap basis the changing market dynamics, VBS helps its partners grow and sustain in the industry by being relevant to their customers.
Evaluate and measure success to develop a sustainable relationship
To develop a sustainable relationship, businesses need to stay on top of channel partner growth, lead generation, training and many other aspects of the relationship. Also, just like any other sales activity, channel partners must be continually evaluated to make sure you’re meeting your goals. A data-driven process can help identify the inconsistencies and weaker links within the sales, marketing, or customer support chains.
Seeking out a perfect partner is never an easy decision and the same holds true in the case of choosing a channel partner for the long haul. A careful scrutiny of the capabilities, priorities, and interests of a particular partner, followed by investment in the ones that come closest to meeting your business values and goals will definitely be the cornerstone in building a solid partnership. However, your interactions and level of shared understanding will decide whether or not you are headed towards a win-win scenario — a must factor for every successful partnership.
By – Ajay Sehgal Vodafone Business Services
