Developing an indirect sales channel is a smart financial move for most businesses, especially with 75 percent of all global trade attributed to indirect sales, according to the World Trade Organization (WTO). 

Companies that seek to start accretive channel partner programs, evolve their existing program into a full-blown partner ecosystem or simply improve their partner experience (PX) must focus on the fundamentals of partner development. In this blog, we’ll cover partnership development in actionable stages that suppliers can optimize and refine to get the most from their indirect sales efforts.

What Are the Stages of Partnership Development?

We’ve identified seven stages of partnership development that channel programs need to nurture to effectively turn their partners into self-sufficient revenue-generators, including:

  1. Determine Your Ideal Partner Type
  2. Recruit Your Ideal Partner
  3. Enter into a Formal Partnership Agreement 
  4. Onboard & Train Your Partner 
  5. Enable Your Partner
  6. Engage Your Partner on an Ongoing Basis
  7. Assess & Adjust Your Partner Business Plan Quarterly

Partnership Development Stage 1: Determine Your Ideal Partner Type

The first phase of developing a worthwhile partnership between a partner and your company is to ensure alignment between the two organizations. What exactly does “alignment” entail? You need to have similar, if not identical, profiles in the following areas:

  • Target Customers – Serving the same type of customer in size, geography, vertical, etc., is the vital first requirement for partnership.
  • Complementary Services – Neither you nor your partner benefits from delivering the exact same services to end customers. While you can certainly have overlapping service areas, you’ll need to come together with different products to form a comprehensive solution that together uniquely solves customer problems.

For example, a common partnership arrangement in the information and communications technology (ICT) channel is a partner that acts as an IT consultant and trusted advisor to an end customer and brings a vendor’s technology solution into a customer environment to solve a problem. In this scenario, both the vendor and partner offer different services that go hand-in-hand.

  • Compatible Value Propositions –While you may have services that complement one another’s, your value propositions may conflict when selling solutions to the end customer.

For example, a marketing agency might partner with a marketing automation software provider like Marketo or HubSpot. However, suppose a core component of the marketing agency’s value proposition is that a business client can use the agency’s services with any type of marketing platform. In that case, the agency won’t push a specific marketing automation platform. This partner is less attractive because their growth is not tied directly to implementing the vendor solution. Conversely, an agency that only delivers services to clients who buy a specific marketing automation platform may be a better partner for the vendor. 

  • Existing or Planned Market Coverage (Verticals or Geographies) – The vendor and partner need to serve the same industry verticals and service areas or plan to go to market to introduce their combined solution set to a new industry or geographical market. Some vendors and partners may choose to enter into an agreement to cross-sell services into the other’s existing customer base as a quicker path to revenue growth.
  • Forecastable Service Capacity – Both the vendor and partner company must have the capacity to serve and grow new accounts. Case in point: a partner providing consultative services may be capable of acquiring prospective new accounts quickly but needs a technology service provider that can conduct pre-sales, sales, post-sales, deployment, onboarding, training and ongoing monitoring, maintenance and management at a rapid rate. This is typically why larger services providers tout the size and scalability of their organization to attract partners. The partner knows market leaders have the capacity to serve multiple new customers simultaneously.
  • Preferred Partnership Model – Some partner programs are tailored to specific partner types or partnership models, such as a retailer, wholesaler, distributor, etc. For example, an agent partner may prefer to work through a technology services brokerage (TSB) to access preferred providers. If a prospective provider doesn’t have distributor relationships or chooses to partner with agents directly, their partnership model isn’t compatible.

Partnership Development Stage 2: Recruit Your Ideal Partner

Once your program has established the ideal partner type, your channel sales teams, made up of channel account managers (CAMs), must recruit them.

We’ve written extensively on partner recruitment and you can check out one of our recent blogs, “How Do You Recruit Channel Sales Partners?” for more information. Highlights include:

  • Identify Partner Locations – Find new partners at conferences, webinars, LinkedIn groups, discussion forums and their industry media news outlets. Your ideal partner may not be in the places you’re already aware of and frequent, so this may require a bit of research on your end.
  • Communicate the Partner Benefit – When you’re meeting with a prospective partner, focus the sales conversation on how you benefit the partner and their customers, not on the features of your solution set.
  • Form Relationships with Distributors – Distributors are sometimes viewed as gatekeepers and middlemen between vendors and partners, but they can often shortcut access to top-performing sales partners that can make or break the success of your program.
  • Know When to Say No to Partnership – Yes, you read that right. Even fledgling programs need to know when to close the door on prospective partners and move on. The investment in time, money and resources demanded from your company in onboarding, training, enabling and engaging partners requires your channel sales team to understand your ICP and be selective. And yes, it’s okay to rethink the investment in the partner after the contract signature – it’s always better to stop a loss leader than plow ahead, hoping the partnership results in revenue that all signs show won’t appear.

Partnership Development Stage 3: Enter into a Formal Partnership Agreement

Once your CAMs have brought in an ideal partner ready to invest in a mutual partnership with your company, it’s time to bust out the contracts and electronic signatures and enter a formal partnership agreement. You’ll need to document clear-cut objectives, including:

  • Onboarding and training milestones and timelines
  • Revenue goals
  • Strategies and tactics to reach those revenue goals
  • Vendor and partner resource allocation
  • Metric tracking and reporting

The partnership agreement will keep both the vendor and the partner accountable to each other and set clear expectations for the partnership.

Partnership Development Stage 4: Onboard & Train Your Partner

Perhaps the most important stage of partner development is partner onboarding. Key steps of a partner onboarding include:

Step 1: Welcome Your New Partner to the Program – When making first impressions, there are no second chances, so set the tone with a warm welcome for your new partner. Proactive communication and engagement are essential throughout onboarding, but our panel recommends creating a professional partner welcome kit as your first touchpoint.

The contents of your channel partner welcome kit will vary depending on your solutions and business model. However, it typically includes some or all of the following assets:

  • Welcome letter
  • Table of contents
  • Onboarding checklist or next steps
  • Solutions overview and benefits
  • Partner program overview and benefits by tier, if applicable
  • Instructions for accessing and using your partner portal
  • Overview of partner portal contents and functionality
  • Information on training or certification programs required to sell or implement your solutions
  • Overview of sales and marketing tools and customer-facing materials
  • Rules of engagement to avoid channel conflict
  •  Deal registration requirements, guidelines and approvals (if required)
  • FAQs
  •  Links to all resources noted in the kit
  • Contact information, such as channel managers, sales support, marketing support, back-office support and finance
  • Note: When sending out the welcome kit, introduce your new partner to the primary point of contact for onboarding inside your organization.

Step 2: Host a Kick-Off Call – After sending the welcome kit to your new partner, you’ll want to host a kick-off call to set the stage and ensure everyone is on the same page. Getting day-one buy-in from critical stakeholders in the partner organization is paramount.

Bring in executives from both companies to the call. Their attendance and attention communicate how much you each value the partnership.

Once the stakeholders have met and virtually shaken hands, introduce the partner’s team to their dedicated onboarding representative and walk them through all the available resources outlined in the welcome kit. Don’t assume your partner has read the welcome kit. Go through it together as if they’re seeing it for the first time. Remember to record the walk-through and send the recording to your partner after the call; they may need to refer to it again or share it with teammates who weren’t in the meeting.

Once the walk-through is concluded, schedule your next discovery call when you’ll begin the process of developing the partner’s business plan.

Step 3: Create a Partner Business Plan – Successful onboarding requires developing a joint business plan with your partner. That begins with discovery. It’s essential to get under the hood of your new partner’s company to understand their capabilities, resources, go-to-market motions, and, more importantly, where their organization performs well and has gaps. This baseline information is essential to mapping a path for the partner to become an autonomous selling machine for your solutions.

Some questions you’ll want to consider in building an effective partner business plan include the following:

  • What is the partner’s current total monthly recurring revenue (MRR)? How much of the current total partner MRR comes from solutions like those your company offers? What is a realistic increase in MRR in six months or a year?
  • Does the partner currently see opportunities to increase MRR with your company’s solutions? If so, how many opportunities? If not, what vertical or horizontal industries does the partner feel capable of targeting to offer your solution? Can you spearhead penetration in these markets for the partner?
  • Will the partner sell into their existing customer base with your solution? Or is their existing customer base not a fit?
  • How well-developed are the partner company’s sales, marketing, customer service and operations departments? Are some departments, such as marketing, nonexistent?
  • Does the partner have the capacity and staff to handle front-line customer support inquiries? Or must all trouble tickets be fielded by your organization?
  • Where does your partner believe they struggle the most? Can your company fill any of those gaps? If so, to what extent? If not, can you connect the partner with a third party that can?
  • How familiar is the partner company with your type of solution and the industries you typically serve? How much education or assistance can you offer in this area? How does their level of knowledge impact the long-term timeline for ROI?
  • What market development funds (MDF) can you contribute to this new partnership? How will you allocate MDF and ensure agreement for its use?
  • How important are you as a vendor to the partner’s overall business now? Are they partnering with you so they can close an immediate opportunity or fill an unmet need? Or are your solutions “nice to have” as an add-on or another variation of similar offers in their portfolio?

Answering these questions with your partner will get you well on your way to establishing a roadmap and realistic timeline for your partnership’s future.

Step 4: Establish Goals + Benchmarks – In order to build a partner business plan, milestones must be set and tied to dates. Once you have a solid timeline, you and your partner will understand the pace for ramping up sales and what resources are required from both sides to reach agreed-upon goals.

Joint business planning is the leading indicator of success for channel partnerships, but other KPIs that are leading indicators include:

  • Participation in technology or sales and marketing training
  • Attendance at your events or webinars
  • Engagement with the portal
  • Number of campaigns sent (if supported in the partner portal)
  • Number of demos or proofs of concept performed
  • Number of deals registered

Establish frequent check-ins with your partner on reaching milestones and goals, so you can work together to make any adjustments.

Step 5: Train Partners – Once you’ve finalized the partner business plan and timeline, you’re now at the point where you need to train your partner. Multiple people at the partner organization need to understand your products, solutions and business processes so they know how, when and why to pitch your company to their customers.

 Your channel business model also will determine the required training. If you’re offering white-label services, your partner may need extra technical certification training to onboard customers and diagnose and resolve customer problems independently.

You’ll also need to iron out how training is delivered by asking the following questions:

  • Will you offer self-service training (written or video courses) through a learning management system (LMS)? Or will you provide live training – online or in-person?
  • Are certifications earned by passing courses in the LMS? Or are mandatory live training and assessments required?
  • Is scheduled live training regularly offered so that partners can attend at their convenience? Or will partners need to schedule one-on-one live training with their dedicated rep?
  • How often will partners need to get retrained or recertified?

Step 6: Provide Accessible Sales, Marketing and Technical Resources – Hallmarks of successful channel partner programs include an abundance of partner-ready sales and marketing assets, including:

    • Fast and accurate quoting tools
    • Simple deal registration processes
    • Responsive and available channel managers and sales engineers
    • Brandable sales collateral, such as
      • Flyers and datasheets
      • Battlecards with comparisons to the competition
      • Templated sales cadences with emails, LinkedIn mail and call scripts
      • Pitch decks and presentations
      •  Demo videos
        • Sample proposals
  • Brandable marketing materials, such as:
    • Partner marketing kits or “campaigns in a box”
    • Templated email campaigns
    • Topical blogs
    • Demo or marketing videos
    • Promotional social posts
    • Content-rich vendor website for partners to direct customers
    • Customizable web landing pages
    • Active vendor social media accounts with valuable, shareable content for partners

It’s vital that these resources not only exist but are easily accessible and brandable via a self-service portal, so your partners can leverage them as needed.

Step 7: Hand Off Leads and Co-Sell Opportunities – Send opportunities to your partner as early as you can in your partnership. You might think, “Isn’t my partner supposed to bring leads and deals to me?” Yes, the goal is to eventually get them to sell most of the time independently, but the odds are that they will need help selling your solution and getting a few wins under their belts.

By sending leads to partners and co-selling, you’re training them to handle real-world situations, which fast-tracks the onboarding process and gets partners closer to their revenue targets sooner. Plus, your partner will have tangible evidence of your investment in your partnership and understand you’re serious about creating success for both parties.

Step 8: Track and Measure Success – Now that your partner is out in the wild, hunting down deals and learning to handle the sales process more independently as months pass, it’s time to begin assessing your partnership’s success (or failure).

Some of Zift’s clients choose to measure success through two lenses:

  • The first way is through hard sales numbers. Quantitatively, success is measured in deal registrations. These show that the partner trusts you, validates their belief in your product and demonstrates the effort they’re willing to make to succeed.
  • The second way is through how the partner talks about you publicly. Qualitatively, the partner wants to brag with and about you. They want to post about you and your business on social media and are excited about big wins.

Creation and execution of the agreed-upon business plan are essential. Performance and engagement of the plan can be tracked by implementing a partner scoring program within your CRM.

A partner scoring method will help you understand the strengths and weaknesses of your partner and your channel program in an objective and data-driven way.

The 5 Cs of Partner Scoring

At a high level, partner scoring involves classifying partners by how they fit into five categories, dubbed by SiriusDecisions “the five “Cs”:

  1. Coverage – partner access to buyers in targeted markets
  2. Compatibility – partner alignment with your company’s business model and portfolio
  3. Capability – partner departments have the abilities, skills, and experience required to function and pull in new business
  4. Creditworthiness – partner long-term financial viability
  5. Capacity – partner’s ability to reach revenue targets and workforce to sell

Metrics for measuring the 5Cs can include:

  • Sales Performance-to-Plan – Does your partner meet revenue targets?
  • Pipeline Performance-to-Plan – Does your partner have a sales pipeline that meets targets?
  • Existing Account Cross-Sells & Upgrades – Is your partner growing existing accounts?
  • Number of Sales or Technical Training Sessions Attended – Is your partner investing time in learning how to sell or deploy your solutions?
  • Number of Certifications Passed – Is your partner investing time to become an expert in your solutions?
  • Deal Win Rates – Does your partner frequently win deals that involve your solution?
  • Installed Base Refresh Volume – How many existing customers migrated to or upgraded from a previous version of your solution?
  • MDF Utilization – Is your partner marketing your solutions?
  • Service Contract Renewals – Is your partner focused on revenue retention? 
  • Customer Churn Rate – Is your partner managing their customer base?

Measuring partner performance will vary by company, solution and partner program, so use this list of KPIs as a guide to developing your own.

Partnership Development Stage 5: Enable Your Partner

Technically speaking, the partner enablement stage of partnership development happens concurrently with your partner onboarding and will include overlapping elements. Remember, your onboarding process isn’t complete until your partner sells on their own and actively brings deals to you.

Partner enablement usually includes providing training, tools, content, and sales and marketing resources to assist partners with bringing your solutions to market. Most of these materials will have been provided to partners during onboarding.

Key best practices to remember to incorporate in your enablement program include:

  • Tailor your channel enablement strategy to the digital-first selling environment
  • Meet partners where they’re at on their technology journey
  • Incentivize and reward success beyond only deal compensation
  • Tackle target market and vertical specialization for your partner
  • Build a partner enablement program for salespeople, not marketers
  • Take care of your partners’ customers, no matter what
  • Listen to your partners and focus on their needs, not yours
  • Take time out to give your partners one-on-one attention
  • Create multiple touchpoints to reach your partners
  • Ask your partners what enablement they need from your program
  • Invest in enablement programs for top-performing partners
  • Staff your partner program with channel and solution subject matter experts
  • Test and refine partner enablement tactics and activities
  • Create easily consumable partner enablement resources
  • Use a PRM with deep business intelligence and analytic tools to enable program success

Partnership Development Stage 6: Engage Your Partner on an Ongoing Basis

After the onboarding and enablement processes are finished, your partner is out in the marketplace working on closing deals. But they won’t stay that way. In a sea of other providers vying for mindshare with top-tier partners, your program must compete aggressively to stay top of mind with high-quality partner engagement.

Zift defines a successful channel partner engagement as successful collaboration with channel partners that helps both organizations achieve their goals. In other words, it means developing and maintaining an authentic, ongoing partnership. 

Key tips for effective partner engagement include:

  • Establish open lines of communication with your partners.
  • Spend plenty of one-on-one time with new partners.
  • Get your onboarding process down pat.
  • Lead with what’s unique about your program and solutions.
  • Embrace the new generation of sellers.
  • Maintain regular quarterly business reviews (QBRs).
  • Keep partners updated on product releases and updates.
  • Protect partners from poachers with personal relationships and lucrative incentives.
  • Keep interacting with your older partners just as hard as your new partners.
  • Re-engage inactive partners by having an honest conversation about why they disengaged and asking what you can do to re-engage with them.
  • Give inactive partners a reason to re-engage by bringing them leads, providing new training and certification opportunities, sharing the successes of similar partners and lining up account mapping sessions.
  • Use metrics to measure partner engagement such as pipeline, revenue, QBR participation, portal and content use, training participation and certifications earned.

Partnership Development Stage 7: Assess + Adjust Your Partner Business Plan Quarterly

Once you’ve assessed where the partner is in the development process and how they’re performing (or underperforming), regroup with them at the next check-in meeting and work with them on adjusting your joint business plan to get them to meet or exceed targets.

Zift is honored to be ranked a leading provider of Partner Relationship Management by G2, the largest software marketplace with unbiased, validated buyer reviews.

With ZiftONE, you can align your channel marketing, sales and operations like never before.

We’d be happy to show you how our platform and team can help your channel partner program. Contact our team to learn more today.