Channel Sales Network Strong Factor in Company Expansion

by: Nichole Gunn April 4, 2011

Business owners are in business to sell products or services, and after creating a product or service the only way for the company to make money is to harness customers or clients. This is where an effective channel sales network comes in.

Establishing a strong channel network provides the foundation for growth. Channel partners are the gears that keep the company in motion by doing the majority of sales work. However, there are a couple of factors businesses must be aware of to allow for a successful partnership, before signing on a partner.

Vendors need to design their channel program to allow for flexibility. As the market changes and the channel partners need change, the vendor must be able to adjust to the changes.

Writing for online marketing company HubSpot, writer Heather Ryan suggests that the first step in designing your network is to provide partners with simple marketing plans that have the capability of being transferrable through various verticals. Being aware of channel sales partners’ needs puts the vendor in a better position to foster customer loyalty. This, in turn, will aid in network expansion.

A second step to a network platform, and arguably a key factor, is to provide partners with incentives and sales opportunities. Directing viable leads to local resellers is a win-win situation. In this way, the vendor creates a safety net allowing new sales prospects potential. The reseller benefits with a steady flow of leads, even if it is having difficulty finding its own.

Communication is essential for this step, and an effective email campaign is one strategy to use, advises Ryan. This type of communication provides the means for partners to be reached across the entire network. Leads can be quickly and easily offered to partners.

Ryan explains, “This campaign is to help move leads further down the funnel and to help increase a partner's lead-to-customer percentages. Often channel managers have the ability to give marketing funds for offers, so why not provide them the email message to use as well."

A third and last step in Ryan’s article is to offer recognition. Vendors need to inform the channel network of a partner’s ‘broad successes.’ This recognition provides three benefits to the vendor: (1) enhances its credibility throughout the channel; (2) creates additional confidence in its own company and product; (3) enhances partner motivation to boost sales.

Demonstrating the significance of channel partner networks is a report from the Association for Strategic Alliance Professionals showing that 40 percent of total revenues “for the top 1000 companies in the U.S.” is obtained by means of channel sales. Unfortunately, 60 percent of channel partnerships weaken or eventually fail completely due to a lack of communication.

Whether adhering to Ryan’s advice or not, vendors need to appreciate their channel network and pay close attention to partners’ needs and concerns. Keeping the lines of communication open and flowing is a key strategy in accomplishing this.