6 Reasons to Use Channel Partners
September 30, 2020

Is a channel sales model the best option for your business? The answer isn’t always cut and dry. If you’re undecided, take a look at these six common reasons for using channel partners:

 

1. Scale your sales team

Channel partnerships enable you to scale your sales force. Partners can help you expand into markets and customer segments that wouldn’t usually be possible. For example, partners can help you reach partners usually too expensive to reach with typical marketing methods. 

Partnering with companies that already understand the market and target customers allows you to be more strategic and efficient in your efforts. In many ways, you’re utilizing existing resources and expertise to grow more quickly.

 

2. Expand your reach 

If you want to reach new geographical locations, partners with an existing presence in those territories will widen your reach. Many companies use channel partners to launch their product in neo geos to enable scalable growth. Having partners with boots on the ground across the country or even globally is a huge asset.

Also, if you’re trying to reach a customer segment (healthcare, for example), you may not sell to them because of specific laws or regulations. Partnering with companies that already have access and the ability to sell to those customers opens new doors. 

3. Create a more comprehensive offering

Partnerships are a great way to provide a more comprehensive offering to customers. For example, if you sell a networking solution, you could partner with a company that offers tech support or network management. This tactic makes you a one-stop-shop, increasing your market value. 

Channel partners allow you to create comprehensive packages of products and services that meet customers’ needs while keeping additional costs and time investments minimal.

 

4. Reduce Customer Acquisition Costs (CAC)

CAC is one of the most crucial metrics measured by sales and marketing departments. CAC reveals how much you spend acquiring customers against how much the customer will spend with you across their lifespan. Keeping CAC low is key to ensuring your business remains reliable and competitive. 

Investing in channel partnerships keeps CAC low. By utilizing the resources that come from partnerships, you can keep your costs down, ensuring business viability.  

 

5. Build brand recognition

Newer companies and start-ups can benefit significantly by using established channel partners. Partners who already have large customer bases and high brand value can open up doors that wouldn’t usually be possible for up and coming companies. 

Partnering with a company that has already gained the customer’s trust increases your likelihood of getting the sale. Significant expansion opportunities can result from these pairings. On the flip side, the established partner winds up looking more dynamic and cutting edge by offering the latest products. 

 

6. Marketing and lead generation 

Marketing can be costly, especially for newer companies. Channel partnerships allow you to create strategic marketing partnerships with larger companies. You can leverage the relationship and reach of an existing brand to expand your reach to new audiences. 

The goal of co-marketing is to drive awareness while generating leads and revenue with less work. To create effective co-marketing campaigns, make your audience overlap and that your partner has a similar goal. 

 

Bottom Line 

Channel partnerships help your business grow in many ways. Strategically partnering with other companies, you can scale your sales team, expand your reach into new markets and verticals. Customers benefit from channel partners because you provide a complete product offering that better meets their needs. Utilizing partners’ resources (especially marketing costs) allows you to lower CAC costs, ultimately increasing your bottom line.

Ali Spiric