A thriving channel partner program strikes a balance between sharing margin and lowering the cost of sales for the Original Equipment Manufacturer (OEM). An indirect channel provides the OEM an aggregation point that ideally facilitates the acquisition of a substantially larger amount of deals. The most successful value added resellers offer their clients a service or a product that is complementary to the OEM’s core offering. Their solutions become part of the whole offering for customers that have shared interests/objectives. Partners also provide the OEM an ability to cost effectively penetrate new, untapped markets while driving incremental revenue.
Significant challenges can arise when your channel partners offer multiple solutions from competing original equipment manufacturers. Attractive incentives must be put in place to ensure indirect sales people commit to your products and services. Cooperative marketing efforts that produce tangible, qualified leads is another way to establish a commitment between organizations.
Conflict between competing channel partners (as well as the OEM’s direct sales force) is another issue that regularly crops up, and needs to be preempted with regular communication and established engagement policies.
The Original Equipment Manufacturer must support a distribution channel by:
- Co-creating a mutually agreed to business plan with quarterly reviews and scoring
- Establishing defined goals and service/reporting requirements
- Delivering the appropriate sales/support materials
- Ensuring any and all technical needs are addressed
- Training the partner to position, sell and service clients
- Running promotions and programs to support the partner
- Servicing the partner as if they were the end user
Value Added resellers typically sell several companies’ products. The goal of the OEM is to become the channel partners preferred vendor. Therefore they must help the partner become enthusiastic experts at selling their solutions. In order to accomplish this there needs to be a deep understand of the partner’s business model specifically:
- How their business internally operates
- How they make decisions
- How they sell and support their clients
- How the OEM’s decisions impact their business
This overt commitment to understanding how their partners make money will impart real loyalty from them, and ultimately provide the OEM a sustainable advantage from worthy competitors.
If constructed correctly, a channel partner selling model can be levered by an OEM to reduce the overall costs of sales while increasing top-line performance.