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Built for professionals at the beginning stages of a channel
Identify the strengths and growth opportunities in your partner program
Best practices and insider secrets for partner recruitment
Once the groundwork is laid for your partner program, what’s the next step? Whether your program is taking off or you’re struggling to hit certain goals, evaluating the types of partners you’re working with is key to growing and scaling.
Taking a step back to evaluate gaps in your sales ecosystem can exponentially increase the results from your channel program, though. And this is where the value of adding new types of partners comes in.
A value-added reseller will help you attract new kinds of customers compared to an indirect reseller, for instance. A managed service provider will offer a more robust experience for your customers than a referral partner.
So, how do you figure out who else you need in your partnership community and how do you bring them into the fold? Here’s how to start adding different types of partners and the next steps as you scale.
What Are the Different Types of Channel Partners?
There are numerous possibilities of partner type combinations and nuances that can elevate your channel sales program. These are the five most common types of channel sales program partners.
Referral partnerships
Referral partners are third parties who promote your product or service directly to their own networks, tapping into the trust and credibility they’ve established with those relationships. This means the leads they send you tend to be highly qualified.
This type of partner typically receives a commission or fee for sales associated with their efforts.
Affiliate partnerships can fall under this category – if they’re posting a link to your product on social media, for example – but affiliates tend to be more hands-off.
Reseller partnerships
A reseller partner sells your product or service to their customer base, helping you reach a much larger audience than you otherwise would have thanks to their connections. Unlike a referral partner that brings you leads, a reseller will typically be involved across all stages of the customer journey.
They usually make money from the profit margins, although they may receive a percentage commission of the sale.
Value-added reseller partnerships
Channel value-added resellers (VAR) partners are quickly becoming the most popular type for many businesses. Like a reseller, they extend your customer base by taking your product or service to new markets and adding a profit margin to it.
However, the difference is that they also provide additional value to the end-user which can be anything from services to customizations. This makes your product more competitive and tailored to that specific audience base. VAR partners are particularly helpful for increasing sales volume over a short period of time and getting products to market quickly.
Alliance partnerships
Alliance partnerships are formed by organizations in a similar business – like software, cloud services or other tech – that integrate two products into a single solution for the customer; to learn more about this, specifically, read Channel Partner Integration Strategies.
It can require more investment upfront to create a joint venture with an alliance partnership but the payoff can be significant, both in terms of the product offered and any co-marketing opportunities.
Alliance partners often receive a percentage of the sales revenue. In an ideal alliance, both sides benefit equally from sharing access to customers. It doesn’t have to be a 50/50 revenue split though if one partner is benefiting more in other ways. Take it on a case-by-case basis.
Managed service provider partnerships
Managed service provider (MSP) partners deliver ongoing services, like IT infrastructure, to your customers after the sale. This can make your software more attractive to a consumer because it removes potential barriers to implementation and upkeep, improving the overall customer experience.
Partners like this can receive a percentage of the sale, but also benefit from the ongoing revenue generated from value-added services.
Choosing the Right Channel Partner Types
When figuring out which partner types to add to your channel sales program, the choices can seem overwhelming. With so many options for partners, how do you know which ones are the right fit for your program at this point in time?
If you are just starting out with a newly established partner program, you have both the advantage and the challenge of laying the groundwork. Before launching into half a dozen different categories of partners you’d like to work with, take stock of what you may already have running in the background.
Most partner programs have roots in informal partnerships, like organic referrals or resellers, long before an official structure is developed. So, consider who is already working with you and what has already proven successful when you start to solidify your ideal partner types.
Targeting sales gaps and goals
Once you’re at the stage of adding additional partners types, start by identifying gaps in your ecosystem that partners can fill as the first step. After all, your partners are an extension of your sales team and so tapping into the extra capabilities they bring to the table can be a huge source of support for your internal team.
Is your team struggling with the number of leads coming in and needing help with a more hands-on approach to sales? A highly-motivated reseller might be a good fit.
Do you need partners who can generate their own leads? Referral partners with an established customer base or value-added resellers, for instance, can be a life-saver.
Are you looking to improve the after-sales experience for your customers with ongoing services or support? Consider the benefits of managed service providers or alliances.
When you’ve established the baseline needs for your channel sales program and what gaps should first be filled, take a step back to focus on the more long-term business goals.
What are the ultimate results you are hoping to achieve with your channel sales program? Do you want to enrich your product with tech partners? Are you hoping to build up a pipeline of resellers?
There is no one-size-fits all solution for the best type of partners to include in any given channel sales program. And the best type for you will likely evolve over time as your program grows and your business goals shift.
That’s why it’s so important to set performance goals for your overall channel sales program and regularly review what’s working. Make sure that your expectations are clearly communicated to your partners, you’ve given them the material and support they need to successfully sell, and you’re measuring the results.
Recruit and Reward Each Partner Type Differently
Just like you’re looking for distinct benefits from these different channel partner types, each partner will be weighing the advantages of working with your organization, as well. And what motivates each partner type can vary greatly depending on where they’re coming from.
Thoughtful recruitment messaging and incentive packages tailored to the distinct goals of your individual partners can go a long way in building long-lasting relationships that are successful for both parties.
A partner who is referring a set number of new leads to your sales team each month, for instance, may simply be looking for a set commission on each successful sale. One who is helping you close the deal or is more actively involved in co-marketing efforts will likely be looking for a more competitive commission structure.
On the other end of the spectrum, a tightly-knit alliance that requires significant investment and effort from both of you upfront – often the case with technology or SaaS partnerships – would need a more comprehensive compensation plan that doesn’t just include monetary rewards.
That could include free certifications or training, the ability for their teams to use your technology solution at a reduced price or strategic visibility to build up credibility. The biggest benefit to a solution partner alliance is the opportunity to multiply revenue from the services offered over the long term. A $100K deal can lead to two or three times that in ongoing revenue from services provided.
Ultimately, the rewards you can reasonably offer are informed by and reflect the responsibilities, required effort and results for each partner type.
Go-To-Market Strategies For Different Partner Types
As you optimize your channel program to include new types of partners and expand your sales reach, your strategies will become more sophisticated, as well. The types of partner content you create, the way you onboard participants and how you go to market with them will evolve.
In our new channel partner go-to-market guide, we explore the best ways to increase revenue, expand reach and boost credibility with your channel sales partnerships for all partner types.
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Ali Spiric
Latest posts by Ali Spiric (see all)
- Affiliate or Referral: How to Pick the Perfect Partnership - January 2, 2020
- 5 Ways These Remarkable Channel Leaders are Improving Their Partnerships - December 18, 2019
- eBook–How to Get Your Partners to Step Up to the Plate - November 26, 2019
A Boost to Channel Programs: Allbound’s $43 Million Growth Equity Investment from Invictus Growth Partners
When building technology stacks, Sales and Marketing actively avoid tools with capabilities that heavily overlap in order to limit spending. This leads to a very common question: can I use my existing CRM platform to manage channel partners?
The short answer? It’s not recommended to rely upon your CRM for partner relationship management (PRM). This is because it’s not equipped with specialized features that speak directly to channel partners’ needs, such as content co-branding, onboarding, and automated content curation based on group types. The lack of comprehensive yet targeted PRM functionality will force you to rely upon multiple tools in addition to your CRM, complicating processes and erecting barriers to scalable operations.
Contrastingly, a PRM is a centralized hub intended solely to help companies enable partners through a variety of features and automations triggered by user actions and customizable settings. What’s more, PRMs are increasingly essential to staying ahead of the curve, as Forrester predicts the PRM market will grow to $679M by 2023 across all industries.
Still on the fence? Consider that PRM technology is relatively new and specifically designed to address CRMs’ insufficient abilities to service partners.
In this article, we’ll help you understand key differences between CRMs vs. PRMs and how to best integrate the two platforms.
What is PRM?
Partner relationship management software provides businesses with tools to track reseller and referral sales while also giving partners support, resources, and a portal to communicate with your business. The power of PRM comes from a personalized portal for partners where they can access documents, marketing content, market development funds (MDF), opportunities, and track deals.
PRM is considered the 3rd evolution of SaaS tools, the first being CRM and then marketing automation. When the market started changing, PRM stepped up to fill in the gaps.
What do PRMs offer in comparison to CRMs?
PRM software provides businesses with tools to track reseller and referral sales while also giving partners support, resources, and a portal in which to communicate with your business. When comparing it against CRM, PRM technology’s power can best be summarized by three points:
- It centralizes most functions and content within a partner-friendly interface - Content is housed in a library with a search bar. Features like market development funds (MDF) requests, deal registration, and prospect pages are all within a single platform. This allows both partners and your management team to be more organized, as well as to identify relationships between different portal activities and subsequent conversions.
- It grants partners controlled freedom - Partners can engage with training and quizzes when most convenient, co-brand select materials as needed, and find quick solutions using the portal’s search function. This results in partners having the autonomy necessary to be productive and achieve success on a mass scale.
- It utilizes automation to improve the partner experience - The portal micromanages partners on your behalf based on commands you set up prior to deployment. This means that you can gate some features and content from defined partner groups and map out content recommendations based on users’ past responses.
Another advantage of utilizing a specialized PRM is that it shows your partners that you invest in their success. You’re willing to spend to accommodate their needs rather than asking them to fit their square bodies into your CRM’s round hole.
Case in point, Serko, a technology solutions provider in the travel and expenses industry, uses Allbound to support their partners who manage over 6,000 customers globally. Channel sales managers at Serko were able to showcase a world-class partner program and portal in which each partner was provided with the right sales and marketing content for their needs. Serko now has 100% partner adoption, which you can read about here.
It’s not “PRM vs. CRM”, as you will need both
Your company’s CRM is not intended for managing your partner ecosystem. However, there are CRM capabilities that are indispensable to Sales and Customer Service that a PRM simply cannot provide.
The Value Your CRM Brings to Your Partner Program
Remember, CRM is an acronym for customer relationship management, meaning that it helps businesses track prospective and existing customers within a single system of record, regardless of whether they came from Direct or Indirect. Advantages of a CRM (in conjunction with a PRM) include:
- The ability for Customer Service to pull client information to better serve their needs
- Customer base data for easier analysis, enabling companies to create and test retention strategies
- The option to schedule emails to customers through the CRM and collect related open-rate data
- Comprehensive pipeline views and sales forecasting, achieved by pulling data from both your CRM and PRM into a single view
- Customer segmentation for intelligent automation and more in-depth analysis
In short, your CRM is essential to keeping all the won leads your PRM helped generate. Additionally, it grants long-term insights into the quality of partners’ leads. For example, if a particular partner group consistently generates customers with high abandonment rates, this could indicate that they’re pursuing the wrong audiences or are setting false expectations, both which modified training practices can fix.
How and Why to Integrate Your PRM and CRM
Your PRM and CRM should share real-time data with one another through integration. This will grant you:
- The ability to block duplicate deals across both platforms - when Direct Sales and a partner both lay claim to a lead, the results are messy. Avoid channel conflict by enlisting data-sharing between your PRM and CRM so both platforms will immediately notify users that the deal already exists within the sales ecosystem.
- A fuller understanding of your pipeline and sales forecasting - Your PRM and CRM should generate reports that give you an overview of today’s (and future) performance. However, why look at two separate reports when you can dive deeper into one?
- For data comparisons between direct and indirect sales performance - By enabling your CRM to pull data directly from your PRM, you can do side-by-side comparisons of how different audiences react to various strategies. This enables you to create better-informed hypotheses and have the sales channels learn from one another.
Allbound’s PRM technology has standard integrations with a number of CRM solutions, such as Salesforce, Pipedrive, SugarCRM, and Hubspot. We also can do custom integrations in order to accommodate new customers’ existing technology stacks. In order to have the process go as smoothly as possible, designated integration specialists will sync up our PRM with your choice of CRM (as well as with other technologies). The end result is seamless interactions between the two software with minimal maintenance required.
What About CRMs That Say They Offer PRM Capabilities?
Because of the rapidly accelerating interest in channel partners, the Sales world is abuzz about PRM technology. It’s only natural that some related software companies would want to capitalize on this interest by laying claim to the PRM title, even if their products don’t quite meet the definitions.
Remember, a true PRM acts as a centralized hub for partner management and sales prospect interactions. Read Automate, Scale, Integrate – PRM System Criteria for a fuller understanding of what features to expect, and remember that a tool that offers only a fraction cannot call itself a real PRM solution.
The Bottom Line About CRM vs. PRM
The market has already started moving to a comprehensive partner management approach. In fact, 65% of high-tech companies have already adopted PRM tools that deliver a significant amount of company revenue. Companies that continue to manage partners in traditional ways via CRM or spreadsheets are not only missing out on new end customer sales, but also valuable insight from the data provided by channel partners. Consider creating a great partner experience to see big returns on your bottom line.
To learn more about choosing a PRM that fulfills your program’s needs, we recommend reading Partner Portal Best Practices and Design Checklist.
How does PRM work within a complex partner ecosystem?
Channel partners are your company’s selling allies, an extension of your sales team. PRM tools give you the functionality to support a variety of partners and their end customers.
PRM tools automatically gather and analyze performance data and metrics, with a clear focus on revenue and activity metrics. Rewarding your most profitable partners with MDFs for hitting revenue targets, or training completions, ensures that you see ROI from your investment.
PRM and tracking revenue
The revenue metrics for partner programs are unique to the indirect sales model, which is why PRM tools have extensive features to track leads and revenue including:
• Partner portal software for easy communication and data exchange
• Access to relevant parts of the customer database
• Dashboards for tracking leads, deal progression, deal registration, and sales KPIs
• Data about which partners perform well and which individuals fail to generate or convert leads
• Integrations with contract, scheduling, expense, and content tools
What are the benefits of PRM?
Overseeing a partner program has traditionally involved complex spreadsheets and manual correspondence for every deal, which required switching between a CRM and other tools to fill in the gaps. This is a huge competitive disadvantage and makes it almost impossible to correlate partner activity and training to closed business. That’s why PRMs provide partner management specific features like:
• Business intelligence, automation, and template-based workflows
• Visibility on the impact of 3rd parties on reaching new buyers
• Partner segmentation for targeted experiences
• Partner channel avoidance through clear registration processes and pipeline integrations
• Planning, recruitment, onboarding, enablement, co-selling and co-marketing, and incentives
• Overview that channel managers can use to track how well training and content is performing in relation to deal registrations
Integrating your partner tool with your CRM
For a complete view of your entire revenue org, both indirect and direct, integrate your PRM with your CRM tool. Look for a PRM vendor that helps you get your integrations in order.
Allbound let’s users bring their existing sales tools with them into the partner management process. You can pass information between your PRM and CRM to create a consolidated pipeline that is your single source of truth and stays relevant with real time updates on deal registrations. Syncing your data also avoids duplicate deal registrations, making partner conflict resolution much simpler.
Conclusion
Guide to Implementing a Channel Loyalty Program
What's one thing that starts and never stops? You might be thinking that the answer is Newton's first law of motion, but you'd be wrong. The answer is much simpler than that: partner recruitment.
Expert panelists Adam Pasch, Co-Founder of Stealth Startup, Ben Wright, CEO of Partner Fuel, Blake Williams, CEO of Ampfactor, and Chris Murray, VP of Partner Ecosystem at Lead Forensics join us to teach you how to recruit powerful partnerships that will take your business to the next level. We're talking about partnerships that will crush your revenue goals.
In this webinar, we'll discuss:
- How to nail a partner pitch
- How to build an IPP
- Why you should use ABM as part of your recruitment strategy