True story. At a previous software company, I was building a channel of resellers and integrators for our collaboration solution. We had pioneered some amazing in-browser functionality, and getting good attention.
I had set up a meeting with the CEO of one of the largest corporate software resellers at the time. I flew out to Chicago to meet with him and his team for an hour. Ran them through the demo. Talked about the technology. How other resellers were very interested. A perfect pitch.
“You in?” I asked.
He leaned back and thanked me for my time. “We’ll contact you if any of our customers ask for this.”
I was crushed. But I now realize I shouldn’t have been. Like many companies who are trying to develop a channel, I had been thinking only about ourselves, and not about the reseller and what they do for their customers.
I now know the secret when it comes to developing a great network of partners. But before we go into that, let’s look at how the typical channel partner selects the technologies and vendors they work with.*
Less is more
Today’s cloud solution providers (resellers) typically work with less than 10 different vendors. Time is money, and they can’t afford to spend all their time reviewing and on-boarding new vendors and partnerships.
Gone are the days when channel partners compete on the size of their portfolios (or “line cards”). They understand the time and effort it takes to build competencies, and are brutal when it comes to evaluating new vendor relationships. They’ve got businesses to run. For more on how channel partners run their businesses, see this blog post. And if you think all channel partners are the same, check out this blog post.
Yes, loyalty matters
What if you already have relationships with cloud solution providers and are bringing a new product to market? Will they be interested? Yes. Channel partners will give preference to their existing partners’ other products when considering new offerings. But remember this when you are pitching to replace an existing vendor’s solution.
But choice matters
Two thirds of channel partners surveyed said that they offer more than one choice in each product category. Why? Partly because their customers demand choices (or have different requirements), and to reduce dependence on any one vendor. That’s not to say they aren’t loyal. It’s just good business.
And so do leads
“We’ve got leads!” Channel partners do appreciate leads, but you can’t buy a relationship with leads alone (technology and customer demand matter more). In fact, when ranking the reasons why they cut ties with vendors, the reason “The vendor failed to provide us with leads” was consistently the least important reason stated.
The secret when it comes to developing a channel
Keeping in mind that potential channel partners consider new vendor relationships carefully, how do you go about recruiting and developing a mutually profitable channel?
“Can’t we just cold call them? It works with end-users.” Channel partners rarely respond to inbound campaigns from vendors. In many ways, they are as hard to reach as venture capitalists. They want warm references, often in the form of customer demand, before they will engage with you. Once they see strong customer demand, then they’ll be ready to talk about your technology.
The secret to developing a strong network of partners? Look for companies that need you more than you need them. Do this by educating them on your solutions and your programs, and creating pull from their customers. Sounds simple, but this is hard to do right, especially when you are focused on building your end-user awareness, leads, and revenue.
Oh, and if you are wondering if we partnered with the large corporate reseller in Chicago? No. But we applied the lessons learned to recruit and develop a channel that wanted to work with us to solve their customers’ problems.
What’s worked for you when it comes to building partnerships? Feel free to comment below.
*Data pulled from a lifetime of experience and the “Partnering in the Cloud” 2015 survey of 87 cloud solution providers. Let me know if you want a copy.