Bad Idea: Chasing Revenue Goals with Channel Partner Acquisition

Bad Idea: Chasing Revenue Goals with Channel Partner Acquisition:  from Sales Force Effectiveness Blog by Drew Zarges

Too often, Channel Managers find themselves in a familiar situation—the boss wants a high increase in Channel Revenue for the fiscal year, and the numbers aren’t looking too good.  Even worse: direct sales is knocking the cover off the ball, eliminating any notion that this is a product based issue.

Many channel partners find themselves in this situation, and the decision path at this juncture is critical. A strong channel manager does a thorough analysis from all angles: End Customer, Competitor, Management and Partner.  An inexperienced Channel Manager leaves a mess, makes hasty decisions, and still falls short of goals.
Here are the Channel Management classic “quick fixes” to avoid:

• Increase Margin/Lower Price across the board for product sales
• Launch a sudden promotion- Big Vacation for the top partners!
• Lower criteria for Channel Partner Acceptance, Bring on more Channel Partners

The last bullet point is a crucial mistake when firms try to increase revenue:  Instead of finding partners who are truly aligned with their goals, they opt for partners with a broad reach at the expense of margin, or simply flood the market with new partners, increasing competition and lowering prices.  This puts them further into the spiral of death--- they now must sell even more than before in order make the number.
Here the simple steps for Channel Partner Expansion:

1. Don’t Rush:  You may miss your number in the short term, but it’s better than sacrificing reputation, margins, or your relationships with the existing channel managers.  Think it’s hard to make your number now?  Try it when new partners botch service and implementations, your price rapidly erodes in the market as partners compete, or you lose your best legacy partners. 
2. Ask yourself What Do We Want?  and What do they want?: Make sure the partner fits your Ideal Channel Partner Profile.  An Ideal Channel Partner Profile should be a tool utilized by every channel manager to ensure a tight fit.  It should change as your overall Go To Market Strategy evolves, but always used as a reference to avoid toxic partnerships.  Download a sample Ideal Channel Partner Profile here.
3. Develop a list and rank in order of importance:  Use your Ideal Customer profile and list out the key attributes of the description.  List all the Channel Partners and score them objectively.  Choose the channel partner(s) with the highest score.

Sound simple?  One of the top reasons that Channel Partners fail is that the Supplier was too lax in accepting partners in the first place.  Avoid hooking up with wrong Channel Partner, list out your Ideal Profile, and don’t settle in times of a crisis.
Channel and Sales Managers:  What are your must haves, nice to haves, and No-Gos when selecting partners?  Please post in the comments below.
Not hitting your number?  Don't settle for the quick fix, gain an understanding of how to achieve quota through Best Practices. 
Sign-up for today's webinar "How to Set Accurate Quotas" with Josh Meeks (May 10th).

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