A channel partner is an organization or individual that helps you grow by introducing you to prospective customers.
Sometimes channel partners are resellers whom you pay when their customers buy your product. Often, those resellers will also take on support, billing, and collection responsibilities for the customers they bring your way. Sometimes, the relationship is more arms-length, and the partner does little more than make an introduction. In those cases, you might pay the partner a one-time fee for each new customer they refer to you. Often, no money exchanges hands (this is how most of my company’s partnerships are). In cases where there are no fees for referrals, it’s probably a two way street, and you’re also going to be referring business to your partner, providing them with some other services, offering preferred services or pricing to their customers, and/or creating value for them in some other way.
At GuildQuality, around half of our new business comes from a diverse group of dozens of channel partners (I referenced some of those in a post about our beach heads). Our partners include consultants, building product manufacturers, trade associations, industry publications, and other software companies that serve our same market. Some are small, and send us only a handful of very high quality companies each year. Others send us far more, and the quality is spottier. Despite their differences, our very best channel partners share a handful of common traits that make us great allies for each other:
- Relevance. We have non-competing offerings and a significant overlap in our target markets. A meaningful percentage of their customers (greater than 25%) are the profile of company who would be interested in GuildQuality, and vice versa.
- Understanding. We each clearly understand what the other does, how we create value for our customers, and how we can create value for each other.
- Communication. We have a healthy dialog, and connect on a regular basis to make sure our relationship is mutually rewarding. This usually entails us sharing what our “picture of success” looks like. Perhaps that’s 50 new customers over the next year, or maybe its 100 inbound leads that site the partner as a source.
- Commitment. We share an understanding of co-marketing expectations, and we each execute on our commitments, i.e. We’re going to provide some compelling content for the partner to use in six of their newsletters; They’re going to promote our free trial to all of their customers three times a year, etc. Whatever the commitments are, we outline them in some sort of agreement at the start of the relationship.
- Empowerment. Our primary point person is empowered to get things done. This is sometimes an issue when our partner is a larger organization or association, and our point person regularly needs to seek approval from others in order to make commitments or initiate campaigns.
When I reflect on the common characteristics among of our great partnerships, those are the five things that come to mind. What do you look for when finding new partners to help you build your business?