What is a channel partner?
According to Wikipedia, “A channel partner is a company that partners with a manufacturer or producer to market and sell the manufacturer's products, services, or technologies. This is usually done through a co-branding relationship. Channel partners may be distributors, vendors, retailers, consultants, systems integrators (SI), technology deployment consultancies, and value-added resellers (VARs) and other such organizations.”
For purposes of this article, we’re essentially talking about a company that sells different products or services to the same customers your business is interested in working with (and vice versa). Therefore both businesses entering into a channel partnership can reach more of their ideal customers by working with each other to provide access to each other’s customers.
What is a channel partnership?
A channel partnership is a collaborative marketing strategy where companies who serve the same customers work together to co-promote each other’s services. You each play a specific role in the growth journey for your target audience.
Typically, a channel partnership includes shared marketing strategies such as co-promotions or events that are valuable to the mutual customer of both partners, and allows both businesses a valuable opportunity to interact with their ideal customers.
An example of this would be a marketing agency which generates leads for businesses developing a channel partnership with a sales consultant. Both businesses work with the same types of client, and recognize that when they work together, their mutual clients experience greater value. At the same time, this creates new business opportunities for the channel partners that collaborate or refer business to each other.
With the right partnership in place, you can see amazing results. For example, this business event reported a staggering 1,983% increase in sales!
These referral partnerships bring a certain level of trust because you’re being referred by a platform or service that the customer is already familiar with. Like a lot of referrals, there’s a lower barrier to entry because your partner has an established relationship with your potential customer.
The more channel partnerships you have, the more services you can introduce to your growing clients as their needs evolve.
How to grow sales through channel partnerships
Beyond being a referral partner, one of the major ways that channel partnerships help you grow is through co-marketing efforts.
By co-marketing efforts, we’re talking about webinars, conferences, or podcasts, and associated promotional campaigns. Basically, you can create a co-branded event or informational asset which is helpful and interesting to your existing mutual customers, and which can also grab the attention of your mutual target audience. If you can work a joint offer into the mix while you’re producing your content, even better.
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A co-marketing example from HubSpot and Google (source).
The goal of these co-marketing efforts is to build familiarity, brand recognition, and authority for both brands. It’s mutually supportive to each other's businesses and helps the end customer. It also allows you both to build your businesses around helping the customers you support.
Planning to grow your business with channel partnerships?
The best time to establish channel partnerships is when you’re ready to continuously support the strategy with marketing. The hardest part is finding a company it makes sense to collaborate with, while not being an unfair drain on your marketing resources.
When you’re looking for a co-marketing partner, you need to consider details like:
How closely do their customers mirror yours? A strong match is essential.
How many customers they have, and how large their marketing database is.
How do you both support the same customer in complementary ways?
Do they have a marketing team that can support the strategy?
You also have to consider how much time you both have available to collaborate on marketing efforts and whether you can produce content consistently.
Here are some additional things to consider when planning your business collaboration:
Think about how often you can reasonably produce useful and interesting content for your mutual customer.
Put some dates into the calendar for events you can collaborate to produce.
Work backwards from these dates to plan topic, content, speakers, and promotion.
Put together a warmup campaign to promote the event.
Create a follow-up campaign for sales to execute, with a custom offer if possible.
Carry out a retrospective and decide what to do better each time.
Make no mistake about it, growth through channel partnerships can be highly effective, and will likely be just as time-consuming as direct sales can be, although closing deals tend to be easier and of higher value because of the combined value proposition.
As you grow your business, you may choose to have a dedicated channel team working in your business alongside your direct sales team. If you’re looking to explore the possibility of growing sales through channel partnerships, let's talk. We can help you assess whether you’re in a good position to start forming these partnerships and help you establish a successful channel strategy.
Are you looking to grow your business? We would love to hear about your plans and help you to scale your business more quickly and efficiently.
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