We’ve talked about strategies to develop channel programs, recruit partners, enable them to sell your products and more.  At this point you may be asking yourself if it’s really worth developing a partner program at all.  There’s such a lot to do!  Well, exactly.  If you haven’t thought through all the elements of a partner program, it’s likely it may not the best investment of your company’s limited resources.  I find too many companies who are ready to dive into a channel program without thinking through all these elements.

Let’s spend this time focused on basic channel policies.  Yes, it’d be good to START with these considerations, but I find most companies don’t.

Guidance in defining segmentation and avoiding channel contention is key in a channel strategy.  As cleanly as possible you want to define what customers your channels will cover that your direct reps won’t.    Even with clear segmentation however, there is bound to be some channel conflict.  It’s best to walk through possible scenarios ahead of time and develop a set of rules to address the inevitable when it occurs.  You may even want to publish your policy, demonstrating to your partners that you recognize the potential of conflict with them and have developed a (hopefully) reasonable and fair approach to deal with it.  For example, you might have named accounts or a customer segment which is the jurisdiction of your direct reps only.

You will also want some type of agreement or contract in place with your partner.  You’ll need these not only to address how the partner handles your product – do they source it from you or from a distributor, or do they only influence the purchase? – but also to obtain their authorization to email and communicate with them on a regular basis.  You may need to consider how the product will be delivered to the partner or their customers.  If there are any complementary products sold in conjunction with yours, your partner needs to know how and where to source THAT product.  If the complementary products are integrated together, your partner needs to know if that’s done before being shipped to her or her customer, or if the partner himself needs to do the integration.  If the integration is done before the partner receives it, will your company, your complementary product owner, your distributor, or someone else do the integration?

All these questions need to be explored in building the channel policy, or published processes, for how your company engages with partners.

You may also want to document how the partners interact with you.  Your rep may be designated as the first point of contact?  Or call center number or individual specifically missioned to answer partner questions may be your first choice.  Or you may have a published web program which provides resources for your partners and THAT is the first point of contact for them.  In other words, how much of your interaction with your partners will be provided in a self-serve fashion versus a hands-on personal contact approach?  And can you afford the support strategy you are putting in place?

Another huge area of consideration is likely pricing policies.  If you have a manufacturer’s suggested retail price, you may require your partner to always sell to their customers at that price.  Partners will want to know what leverage they have to adjust your pricing.  They’ll also want to know what margin they’ll get and if or how much that will vary with associated variations in pricing.  For example, if there’s a promotion, will that affect the margin they get, and so on?

You might also need to think through whether the partner needs demo copies of your code or full-blown copies of your product so they can learn it and build skills in customization, complementary add-ons, etc.  Do you plan to charge for not-for-resale copies of your product?  Typically vendors give this to their partners.  Some vendors even give licenses of the product to their partners so they’ll use it in their own businesses, get familiar with it and promote its benefits to their prospects.  It all depends on your strategy and objectives for going to market with partners.

If your product is physical, we’d suggest you publish a return policy in the event the product is defective or rejected by the customer.  You may want the product returned or salvaged.  You may want the product destroyed rather than pay return shipping fees.  You’ll want to publish all this for your partners before the need arises for them to take action.

Channel partners for many companies sound like an easy way to generate some extra revenue.  Clearly it’s a complicated venture to undertake!  Next time we’ll take a step back and look at whether partner revenues are financially viable for a company.

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