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Can Channel Partnerships Help Increase Sales?

Year over year, your sales team is responsible for generating and increasing the company’s revenue. Sales reps go out in the market virtually and in person, they meet prospects, drum up interest, and ultimately close deals. At least that’s the hope.

But where can channel partnerships fit in?

Sales Hacker has published ample content about channel partnerships. You may have even read some of them at one point and wondered if channel partnerships really help you increase sales in your business. If that’s the case, then you’re in the right place to discuss the possibility.

Spoiler alert: they can!

Let’s dive into some insights on implementing a channel sales approach successfully.

Channel partnerships can make things easier on your sales teams

Whatever it is you’re selling, you’re depending on your sales reps to push more of it to potential customers. At some point though, they could hit a plateau in the number of units they can sell. While you could hire additional sales members, odds are if revenue is an issue, you’re looking to increase income streams without needing to bring more staff on board.

Unfortunately, when this happens in some businesses, upper management will sometimes decide it’s easier for them to simply increase required quotas for their sales teams. While that may work in the short term, it can be devastating for your employee turnover rate – not to mention the blow it can cause to team morale.

Because of this, your company may be debating the idea of implementing channel sales as a growth strategy. This is an excellent consideration because it can make things easier on your team. By partnering with another company offering products and services that complement your own, you may increase revenue, widen your current audience of prospects, and get exposed to other opportunities and ideas for profits you haven’t even thought of yet.

How channel partner sales can work

Let’s run through a hypothetical situation of channel sales in action.

  • Your company sells your products/services along with those of another company to your customer base
  • Another company sells their offerings along with yours to their customer base
  • Both companies sell each other’s products to both sets of customers
  • A company sells products/services from multiple companies to consumers but doesn’t actually have offerings they produce themselves

Each of these partnerships come with advantages and disadvantages, but for the purposes of this post, we’ll focus on the positives. The key to having a channel partnership that works well for everyone is to do intensive research to create a good plan that will benefit both parties.

Benefits of working with good channel partners

Notice the caveat here: you want to work with good channel partners. If the partner you are considering doesn’t really care about your bottom line and is only concerned about how much money they can make from the deal, it’s time to move on to someone new.

The best partnerships increase revenue for both companies. That said, we’ve compiled the core benefits of working with quality channel partners.

You’ll instantly have great administrative support

This is even more important for a small company looking to scale up. When your sales teams have hit a wall, and you need more support, a channel partner can help you with things like improving your messaging, email swipe copy, ideas for bundling products, and even lead generation techniques that might not currently be on your radar. If you’re working with a partner that has been in business longer than you, this is the prime opportunity to take advantage of their expertise.

You can improve cash flow and reduce financial strain

By adding a new offering to your own products and services, you can instantly start making more money without needing to create something on your own. Product and service ideation and creation can take a lot of time, money, and other resources after all. And if you’re partnering with a company that has a proven track record and a really good product to boot, it’ll practically sell itself.

This is why it’s so important to partner with companies that are selling complementary products. The new offering you are presenting to past, current, and future customers shouldn’t feel like it’s something out of the left field. Rather, it should feel like it makes sense for them to buy in conjunction with what you’re already selling or have sold.

It wouldn’t make any sense for a vegan grocery store to suddenly partner with a butcher. The two products are not aligned. Keep this in mind when you first start researching potential partners. Think of everything you currently sell, what your customers are already buying and want, and what they would naturally want along with your current offerings.

Your company could gain access to new markets

Though it is a complementary offering you will be selling, partnering with a company will give you access to new markets you might not have otherwise had a reason to reach out to.

A website hosting company that only sells hosting partnering with a website security company. You never sold website security before, but having that offering in your arsenal gives you one more reason to reach out to your customers and upsell them on something to get additional revenue. It also gives you a reason to reach out to people you may not have considered before – customers who already have website hosting with you or someone else, but that also need website security.

This is a win-win not only for your company that wants more money, but now you have given your customer a way to protect their website. And it doesn’t hurt that you can now tout that your customers are safer thanks to having a website security partner. Cash in on their reputation and create a competitive advantage for yourself.

Questions to ask when considering a channel partner

Odds are by now you’re sold on the idea of considering a channel partner. But now the question is how to choose the right one. You know it needs to be a mutually beneficial relationship and that the goal is to bring a partner on board that has offerings that practically sell themselves. Here are some things to ask yourself when perusing the possibilities available.

What are the products that complement my own offerings the most?

Again, you need to be thinking about things that enhance your own company’s offerings. The top priority is to add value to your customer. It’s not simply about making more money. You still need to keep your current customer base happy, otherwise all of your efforts will be for naught.

What does the refund process look like for the partner being considered?

Is there a lot of customer churn? Do customers that buy from the partner you are considering ask for a lot of refunds? It’s not going to do you much good if your partner can’t keep the sales they are making from ending in a refund.

This can actually damage your reputation in the long run. At the same time, you need to know how they handle refunds. If it’s difficult for customers to back out of a purchase with your partner, that can be just as damaging for your company’s reputation.

Can my company afford the time to learn the ins and outs of the partner?

Working with channel partners is a fast way to increase revenues. That’s not to say it’ll happen overnight. There will be a learning curve, and your sales team will need to be brought up to speed on the particulars of the new offerings they will be adding to their pitch for current and new sales leads. Is there a good time for your business to take on this partnership (i.e. a slow season)?

You also need to know how long the training will take. Has the partner worked with other companies before? If so, can they give you an estimate as to how long it took for onboarding with their previous partners? The faster you can get the product added to your list of offerings so you can increase profit margins, the better. Of course, you don’t want to rush things, but time is money.

How can you add your partner’s offerings to your own?

Remember the top goal is to add value to your customers. So this question is about determining if you are going to sell it to everyone, or if it’s better for a specific segment of your audience. The more you’re selling in your business, the more thought you should put into this question. The last thing you want is to turn off your prospects by giving them too many options for products or services to buy, which can result in decision fatigue and zero sales.

Can the partner offer its support, and vice versa?

The more technical the product you’re adding to your offerings, the more support you may need to give each other for this to be mutually beneficial. If needed, can you train your partner in how your company works?

Doing so could help them determine additional ways to help you close more sales. There may be some investment of both time and money needed from both partners in the beginning; you also need to determine if you can support your partner financially to get things going.

The best way to increase sales with channel partnerships

If you’re still here, it’s clear you really want to increase sales with channel partnerships. There’s been a lot of information so far, but we’re coming into the home stretch. You wanted to know if channel partnerships can help you increase sales, and we said up front that they can.

Here’s the exact strategy you can use to improve your profit margins.

1. Choose an amazing partner

An amazing partner is one who sells products/services that complement your own. Their values and goals should be aligned with yours, and they should want this to be mutually beneficial.

2. Work together on a sales plan and marketing strategy

If they simply give you affiliate links and wish you luck, you’ve chosen a horrible partner to work with. The better way is to put your marketing teams together and decide on the most effective strategy for drawing in new customers. This might mean writing articles and white papers, developing high-quality infographics, or even coming together to create webinars or training for customers about the benefits of using each company’s products in tandem.

When working together on your marketing strategy, think about things like:

  • What problems will both of your product offerings solve for your customers?
  • How will your sales strategies be different when compared to competitors in the market?
  • Do you have proof to support the claims about the products you will be selling together?

The point here is to make a strategic plan of attack and then execute the plan.

3. Have realistic expectations

You can’t expect this to save your business, or raise your revenues drastically overnight. The better way is to write out your realistic expectations, and then strategize ways to make them realities. If you set your expectations too high, or if your partner makes promises that they can’t deliver on, nobody wins.

4. Get it in writing

Whatever you determine in steps two and three, get it in writing. Not only will this protect both parties, but it will hold you both accountable to deliver on any promises that were made.

5. Track everything

You need proof of what’s working and what isn’t. Then as the data starts coming in, work together, making adjustments along the way to keep improving revenue. As the old adage goes: channel partnerships are marathons, they are not a sprint. You’ll need to keep tracking and adjusting the course until you find a way to start making serious money, then rinse and repeat.

But if you’ve followed everything to this point, you are much more likely to see success in your channel partnerships and increase sales than if you’d gone into it blindly.

Where to go from here

The next steps you should take if you are interested in channel partnerships are:

  • Look into what types of businesses would complement your own sales efforts
  • Investigate whether or not the businesses you are considering offer channel partnerships
  • If they do, look into how their partnerships are structured and what it takes to work with them
  • Set up a meeting with their channel partnerships point of contact and see how you can get started on working together

With a little luck and a killer marketing strategy, you’ll be increasing your sales for your business in no time.

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