MH: So now you can go out and recruit the right channels?

GS: No! First you have to work out what is in it for the different types of partner and how you intend to reward them. What is your channel-value proposition?  People tend to skip this stage, assuming that a 10% margin from resell will do.  But these days that is not enough. And it may be that simply handling your brand or the marketing opportunities that your product line can bring will be very attractive to some types of channel partner.

MH: If you start looking at rewards and end up giving some people more than others, isn’t there a danger that you will be perceived to be unfair?

GS:  Many suppliers worry about this, I think unnecessarily. It is not about giving preferential treatment to a particular channel, but about providing the benefits that they need to optimise the customers’ experience.

“Typically, you find that channels appropriate the wrong labels.”

Take brand, again. Using your brand and having pre-prepared marketing materials and templates might be of enormous benefit to a small reseller who benefits by association with your brand.  But, for one of the big systems integrators, such as Accenture, whose brand is much stronger than yours, all you’re doing is incurring cost.

Of course, at this stage you will also come to realise that there are some partners who might have the right skills, but with whom you simply cannot afford to work.

MH: So now we can go out and recruit them? 

GS: Yes. Although in some cases, such as two-tier distribution, the recruitment of dealers could perhaps be left to the distributors themselves. Otherwise this is the stage where good old-fashioned salesmanship comes into play. 

MH: I see, and the benefits of going through this process are obvious at this stage, aren’t they?  If you have worked out the channel-value proposition and you can talk to the channel knowledgeably about what customers want and how they fit into that process, it will make the whole recruitment process much, much easier, won’t it?

GS: Yes.

MH: So how do most companies go through this process?

GS: They tend to fall back on labels far, far too soon. They say: "We have a piece of complex solution software and so we need to go through alliance partners and solution value-added resellers."

But, typically, you find that channels appropriate the wrong labels – they tend to want to appear to add more value  than they do.  By defining precisely what you want your partners to do, you may well open up the field to more people and you can also very quickly ascertain whether or not particular partners have the right fit and skills.

MH: Finally, how much do you find that strategies change during the implementation process?

GS: Well, you certainly learn a lot during implementation. Make sure the strategic goals are right, but then be flexible.  You have to be prepared to change and modify as you go.  Projects like these are learning experiences!