March 14, 2018
Top 4 Considerations When Expanding Your Channel Program
In a recent State of The Channel survey of 600 Channel Sales and Marketing leaders, 84% of respondents have stated they plan to expand the geography of their channel programs in 2018. If you are one of them, the chances are that you are already doing well with channel partners in your geographic area.
Another possibility is that you believe that expanding will allow you to grow sales because of the 80/20 rule. Some organizations believe that obtaining more channel partners is a solution to their sales problems because 20% of the partners will always perform well. This is a common misnomer.
This approach is akin to believing that the solution to having a leaky bucket full of holes is to pour more water into the bucket. No matter how much water you pour in, the water will leak out, and the bucket will stay empty. It works in the same way with partners. If you don’t have a strategy and systems for partner engagement, enablement, marketing and support, your partners will not succeed no matter how many partners are in your ecosystem.
However, even if you are doing well, expanding into a new territory comes with its own set of issues and challenges. This article will introduce you to four things you need to consider before you take on expansion into a new region.
1. Get clarity on what is working in your business and your interactions with your partners.
Sometimes, businesses and business relationships become successful because people in them are doing the right things the right way without actually realizing what and how they are doing. While it may not matter why you are winning when you are winning, it does matter if you plan to scale, replicate or move your model and relationships to a new geographic area.
Before you expand to a new geographic area, you need to get clarity on why you are successful in your current area. This includes clarity about your business, your channel partners and your relationship with your partners.
Often, people assume that clarity is something that just comes on its own and some people and businesses just have it. In reality, this is not true, and clarity takes work. You need to think about it, brainstorm, write down ideas, test them, validate them, and get supporting information and data.
Start with writing down a list of your products and services. Then, create a description of what your competitors have to offer. What advantage do you have over your competitors, what is unique and distinctive about your company that is difficult to replicate?
Your core competencies are not necessarily your products. They may include customer service, responsiveness, innovation and flexibility. Often, the core competency of a business consists of a complex and integrated system that includes proprietary technologies, information, relationships and operational processes. If that is the case in your business, what are the elements of the system? The description of the system is the platform that you can use to expand into new areas. A company typically develops core competencies in at least one of the following areas:
- Superior product quality
- Superior service quality
- Responsiveness to client needs
- Custom solutions
- High-quality teams
- Business processes
- Sales and marketing superiority
- Operational superiority
What is it that makes customers buy from you and what is it that makes your partners successful? One of the examples may be that in your area you had a “first mover” advantage that you may not have in another region. For this reason, it is important to know why and how you got to where you currently are.
2. Learn more about the area where you plan to expand
Once you get clarity about why your channel sales are successful in your area, study the areas where you plan to expand. Time and time again, even the most successful companies, including Amazon, Starbucks, Uber, and others find that they are not able to make things work everywhere. What are the differences between your area and other areas? Will your current advantages still be advantages there? Can you come up with something else that will allow you be successful there that is not working here? Maybe you’ll discover that the areas you are currently considering are not a good fit. If this is the case, what other areas could be a good fit?
There two ways to go here. The first one is to start with different areas based on the criteria for the areas. For example, if you currently provide solutions to clients in New York, Boston and San Francisco, it would be logical to start looking at other large metropolitan areas such as Philadelphia, Los Angeles, Miami and others.
The second one is to start with what you know about your business and ask yourself: where can we get results faster, easier, better? Business and life do not reward people for reinventing what has already been discovered. If anything, your competition is likely to get ahead while you are trying to reinvent. Figure out how you can make what’s working work better. For instance, if you sell software to independent restaurants that have a certain sales volume, you may want to start with researching locations of such restaurants across the country. You may have a lot of customers in a city like New York, but if you are targeting a specific niche, your customers will not necessarily be in another metropolitan city. It may turn out that an affluent suburb such as Mountain View will have more of your prospects than a large metropolitan area.
3. Learn more about business landscape and competition in the area
After you study the area, study your competition. What are they doing right? What are they doing wrong? Are there any commonalities to what they are doing? If you see a lot of smart competitors doing something over and over again, it most likely means that they have figured out something that you don’t yet know. Test ideas and approaches and find what works. For example, if you see that all smart players in the marketplace are selling software-as-a-service and nobody is selling standalone software packages, this tells you something. Smart competitors have tested different approaches and found the one that works. If you see all competitors providing high-quality support, this indicates that clients in this area have this expectation. Typically, if you find something that nobody else is doing and try doing it, it will either be a disaster or a huge success because there are only two options here. The first option is that the competitors have tested the market and found what works and what doesn’t, which is why they are not doing it. The second option is that you have discovered an opportunity in the market that nobody else realized was there. Examples of such opportunities include pricing, the way to structure your offers and provide support to customers.
4. Create systems and processes
By now you should have clarity about what is working and not working for you, your partners and your relationships with your channel partners. The next step is to take the documentation you’ve created and map out an action plan that leverages processes and systems.
Ideally, you want to do this in five areas: partner recruitment, partner engagement, partner enablement, partner sales activation and marketing, ongoing partner support. If this sounds like too much work, you may choose to work with a channel enablement partner such as CGS. Read more about our Channel Partner Enablement Solutions here.