Channel Partners Unleashed: A Comprehensive Guide to Channel Strategy Success

Icon-watch 12 min read
Icon-date Dec 22, 2023
Danielle M.

Customer Success Coordinator

Channel Partners Unleashed: A Comprehensive Guide to Channel Strategy Success


    Building an all-inclusive marketing strategy calls for building a network of suitable channel partners. Channel partners come in various forms and help your business touch the heights you wish for it. But this process isn’t that simple.

    Before jumping on the bandwagon of recruiting a channel program, you must learn their benefits and strategies. Only then can you make the right decision for your product.

    We have a lot for you in this comprehensive guide to channel strategy success. You will learn how to create a victorious plan, set up the right channel programs, and get the best outcomes from them. So, let’s dive right in!

    I. What is a Channel Partner?

    Picture yourself: You are a SaaS company trying to reach a broader market with minimum resources. How about collaborating with a channel partner that has just the right audience for increasing your sales?

    Now, you might be wondering “What is a channel partner?

    That’s easy:

    A channel partner is a company (or reseller) that sells products on behalf of another company. Whether the product is a software, cloud-computing service, or hardware, you are the official vendor. But the software reseller, for example, uses its selling resources such as a large audience to increase your sales.

    Vendors use channel programs to conduct indirect sales. These solution providers act as broker or middlemen getting mutual benefits in return. It is a strategic collaboration between two or more companies. As a result, the official vendor gets access to a larger market segment and new resources.

    But why would companies want to sell another vendor’s services?

    The reason is simple:

    Mutual benefit!

    II. How Does Channel Partnership Work? The Basics

    Channel partner and business providing mutual benefits to each other

    A channel sales model comes in various forms and partner types. Partners are responsible for marketing and the sales efforts of products or services for another vendor. But at times, they are also involved additional services such as product development.

    The working principle of channel partnership is simple:

    You find a suitable channel partner that has the right resources such as managed services. It could be a reseller, retail store, influencer, etc. marketing and selling your products. It can also be a company providing you with enough resources to develop a service after which they sell your products.

    So, how you want your channel partner to be is totally up to you. All you have to do is consider the benefits you need from the program and the perks you can provide to them.

    As mentioned above, channel partnerships are based on mutual benefits. You have to consider the perks you give out while making a choice The benefit could be a % of the commission, a referral fee (in case of a referral partnership), a sale commission through an affiliate partnership, etc.

    III. Why Do You Need Channel Partners? Benefits of Channel Strategy

    Now, why can’t you simply hire someone to sell your services directly instead of opting for indirect sales through a go-between? Well, collaborating with channel programs comes with a lot of perks. That’s why it is such a common marketing strategy. Let’s check out some of the channel partner benefits so you can learn why you need one!

    A. Apt and Increased Audience

    Well-established partners already have a large audience that trusts the sellers. While collaborating with a channel program, you won’t have to worry about finding market segments. Channel programs will do it for you through managed services. So, you can focus on excelling your product instead of worrying about marketing campaigns.

    Manually hiring a salesperson and training them to sell your products requires a lot of time and effort. And not to forget the hefty employee salaries you have to provide. That’s where channel partnership strategy comes in handy.

    By simply collaborating with a suitable channel program, you can reach new markets with barely any effort. This means a significant revenue for your business.

    Business person addressing and reaching larger target audience

    B. Reputable Brand Presence

    For new businesses and service providers, establishing a reputable brand presence in the market is quite difficult. By working with a channel sales program, you get access to an audience that already trusts the channel partner. So, enhancing credibility won’t be a hassle for your brand.

    C. Reduced Costs

    Experience reduced costs and increased sales efforts by collaborating with different partners.

    Imagine this:

    You have to hire a whole marketing team, train salespeople, conduct research for marketing campaigns, etc. All this takes a lot of time and money. But if you hire a channel partner excelling in marketing and selling, you won’t have to make large investments in this aspect.

    So, through channel partnership strategy, you utilize each other’s strengths and save each other’s costs to drive sales for your business.

    D. Painless Geographical Growth

    An expanded business operating in various geographical regions means touching a larger audience and gaining more sales. Setting up physical locations in different regions isn’t an easy task and not to forget the hefty costs it demands.

    Through a channel partner program, working in a different region than yours, you can expand your business presence globally.

    E. More Space for Experimentation

    Experimenting with different marketing strategies helps a business grow and learn more about its strengths. But with these experiments comes the cost of risks. The experiment can go downhill. New business owners don’t have much room to face a loss through experiments.

    But a better way to experiment with different ideas is through a channel program. It allows the vendors to test different ways to market, promote, package, and manufacture their products. As the benefits of the experiment are shared, so are the risks.

    IV. Building Blocks of Good Channel Partners – Evaluation

    With all the various types of channel partnership programs in the market today, it can get chaotic to make the right choice. The best channel partner programs for your business depend on various factors such as your vertical, commission strategy, requirements, etc. But we have a few building blocks for you to consider before choosing a channel program. Let’s check them out now!

    1. Skills and Expertise

    Identifying your channel partner’s skill set helps evaluate their expertise. Does your channel partner’s skills align with your brand? Do they have enough technical knowledge of your products to explain to the customers properly? These are some questions you should consider before choosing a channel partnership program.

    In short, their profile should align with all your requirements. For example, if you need a partner with an international presence, you won’t go for a national partner program. Another example is to learn about their expertise and sales strategies. Does the channel partner excel in marketing campaigns, drive sales, managed services, or customer service? It all depends on your requirements.

    List of skills for business to evaluating channel partner profiles

    2. Customer Base

    Evaluate the customer base of your partners. Selling through channel programs is only easy when their target audience matches your products. An irrelevant clientele won’t benefit your business in any way.

    According to statistics, channel programs contribute 58% to the total revenue of your company.

    3. Clear Strategy

    Direct and clear communication to build a channel partnership strategy is crucial for a smooth collaboration. A partner that coincides with your strategies will suit you properly. Set clear goals and expectations from the start to avoid any unforeseen circumstances. Establish a channel partner business plan to clear out all your expectations.

    4. Evolution and Flexibility

    Channel programs should be flexible enough to stay updated with the ongoing market trends and innovation, follow them, and incorporate them into their business strategy. They should be familiar enough with your target audience to implement the best marketing ideas.

    5. Perks for the Channel Partners

    Different channel associates expect different incentives and perks. So, you gotta find one that aligns with the kind of benefits you can provide the partner. A smooth channel relationship management is only possible when both parties are getting their desired outcome.

    For example:

    You partner up with a channel program that provides you with enough resources for selling and marketing your products. In return, you provide the channel partner with a percentage of the commission of sales they make for your brand.

    V. Tips for Developing a Successful Channel Partnership Strategy

    You are trying to choose your a channel program but don’t know where to start? Build a channel partner strategybeforehand to ensure you get the desired outcome. But how can you develop a successful channel partnership strategy? No worries as our tips will take you to the next level!

    Choose a Suitable Channel Partnership

    Channel partnership selection is the most important aspect of a successful strategy. Choosing the wrong partner will lead to lost revenues, wasted time and effort, etc.

    The hiring process is simple. All you need to do is build a roadmap and align your requirements with the partner’s expertise.

    With the right choice, vendors make extensive sales. Zoom’s 40% business contribution comes from channel partners in Japan.

    Zoom channel partner program advertisement

    Decide what kind of programs are suitable for your business plan and product. What are your expectations regarding sales efforts? For example, do you need a referral program or affiliate channel relationships? These are just a few channel partner examples.

    Define Your Goals

    After selecting a program, define your goals clearly. You should put your expectations upfront to your partner so they can easily meet them. Transparency is quite important when it comes to channel partnerships.

    Determine the KPIs for your company. When you invest so much time and effort to hire and train channel associates, you must be able to access the outcome. If the partners aren’t learning the good stuff and providing your desired sales, managed services, or customer retention, it is of no use.

    Provide Ample Resources to The Channel Partners

    Hiring isn’t your only job when it comes to channel relationships. The more resources you provide to your partners, the better outcome they will bring to the table.

    Training programs and introduction to your product are crucial. When partners become familiar with your strategy and product, they will work better to market and sell it.

    In fact, 70% channel partners believe that access to sales enablement tools has a significant effect on their performance.

    This works well for SaaS channel partner strategy as well. SaaS products can be tricky to understand at first. But with the right training, the partners can ace their job.

    Moreover, motivate your partners to prioritize your business by providing sufficient incentives, bonuses, and discounts. Anything that motivates the channel partner to provide a good outcome will always be in your favor.

    Remember: The training program shouldn’t be challenging. Provide easy-to-understand courses for your partners with one lesson at a time. So, they don’t have to overwork to learn about your strategy and product. 

    Make communication easy by using a suitable LMS. This way, information exchange for all the colleagues will be in one place and they can also interact with each other. This will only strengthen your channel partnership strategy.

    Google Classroom LMS for communicating with and training channel partners

    Set Up Success-Measuring Rules

    Success measuring rules can be different for different companies. But it is important otherwise you won’t be able to know if hiring a channel partner was worth it.

    Determine whether your partners are providing the desired outcome and enough sales efforts or not. Are their strategies aligning with your brand? Are they working at an adequate pace after the training session?

    You can set up a tier system to motivate the partners.

    For example, tiers like bronze, silver, gold, and platinum for measuring the performance of every partner.

    Partners performing exceptionally well can get the platinum tier. Whereas, those lacking in some aspects can get the bronze tier.

    With each tier, you can assign several rewards such as bonuses or increased commission. This will encourage the partners to reach the platinum tier. (which means perform phenomenally for your company)

    Provide Full Support to the Channel Partners

    Once everyone becomes self-driven, you can take a breath of fresh air. But that doesn’t mean you take away your support from the channel sale managers.

    To encourage the partners to incorporate flexible and new methodologies, you have to constantly provide them with your support.

    Monitor their performance at the backend regularly. Pitch in different ideas for campaigns. Make them feel connected by telling them your plans and strategies. This way, you will get high-quality channel partnership which is important for your company’s success and image.

    VI. How to Find Channel Partners?

    3-category chart for finding channel partners

    Until now, you have learned how channel partnership is similar to a wizard with a magical wand. But where can you find this wizard? Let’s take a look at some ways on how to find channel partners!

    Research Online

    Conduct thorough research by utilizing search engines, online directories, and platforms like LinkedIn. Through online directories, you can filter and find thousands of prospects that align with your company’s demands.

    One great example is SaasMax. This platform is designed for software channel sales. You can find various prospects that will be interested in working with your brand.

    Check Out Your Competitor’s Channel Partners

    Just because a channel partner is working with your competitor, doesn’t mean they will not work with you. In fact, if your services or products have unique elements, you can prepare a pitch and impress the prospects to experience competitive advantage.

    Researching your competitor’s partners also gives you an idea about the kind of partners you should hire. This way, you can find similar prospects for your business even if you don’t approach your competitor’s partners.

    Build Your Online Presence

    Building your online presence and promoting your product or service will increase sales as well as attract potential channel associates. Enhance your network on platforms like LinkedIn and connect with other business owners with the same niche as yours. Through such connections, you will find a phenomenal partner in no time.

    Socialise and Network

    Socializing in real life by attending conferences, webinars, seminars, etc. means you meet potential channel partners face-to-face. You can showcase your products or services at events to attract partners. Make it interesting and coherent to motivate different companies to work with you.

    VII. How are Channel Partners Paid?

    As we have discussed before, channel partnerships work with mutual benefits. So, how do you pay a channel program, and what other benefits do they get?

    The channel partner commission structure is different for every company:

    • Some prefer a commission-only structure through which the channel partners get a percentage of commission from the sales they make. This means, the more a partner sells, the higher it gets paid.
    • Some channel partners also prefer a base salary with commission-based incentives. For example, you pay them $500 per month, and with each sale they make, they receive 5% of that sale. This method is suitable when you need more than just marketing and sale tactics from the channel partners.
    • Tiered-based commissions motivate channel partners more than other commission structures. In this structure, they can receive a higher amount of commission after reaching a certain goal. For example, you have set up a goal of making 100 sales per month. The partner makes 120 sales and also enhances other aspects of your business. Such a partner deserves more than a basic commission. So, you pay them according to a platinum tier.
    • Other commission structures include draw-against commission and multiplier commission. Multiplier commission works similarly to tier commission. In this plan, the percentage of the commission the channel partners receive multiplies as their sales percentage increases.

    VIII. Resellers vs. Channel Partners – What’s the Difference?

    If channel partners sell your products indirectly, then aren’t they similar to resellers? Channel partner vs. reseller – if this is in your mind, read further!

    • Channel partners are directly associated with a company to sell their products based on commission. Whereas resellers buy products from the company and sell them to end users.
    • Channel partnership payment is based on commission. On the other hand, resellers make money from the profit they earn from direct sales.
    • Channel partners are involved in multiple aspects of your business such as managed services, marketing, packaging, manufacturing, etc. Resellers have no say in your business.

    Value-added resellers (VAD) are a type of channel partners that work similarly to resellers. But they make a new product by combining their product with yours. For example, a VAD provides a hardware product for your software service.

    IX. How to Manage Channel Partners for Marketing?

    After onboarding, managing channel partners can be tricky. But with a clear-cut plan, you can easily perform this task. Follow these tips to manage channel partnerships successfully:

    • Build a strong relationship with your channel partners by understanding their needs and explaining your business goals.
    • Communicate clearly and regularly with your channel partners. Choose a suitable platform where you can communicate with your channel partners constantly. You can go for video calls, in-person meetings, texting, emailing, or using platforms like Slack.
    • Reward and appreciate your channel partners for reaching goals and performing well. This will only uplift them to do even better.
    • Utilize PRM software to streamline your channel partner management.

      Impartner PRM Software for channel partner management

    X. How Do Saas Channel Partnerships Work?

    All the big names such as HubSpot, Shopify, Slack, etc., consider channel relationships as an integral part of their marketing strategy.

    SaaS channel partnerships work the same way as other channel partnership programs. However, the training process can be challenging for a SaaS product.

    The reason is:

    The courses for a SaaS-based product will include more technical knowledge than other products. The channel partners will have to learn all about the features and technology used in the service to attract a suitable clientele.

    Other aspects of SaaS channel partnership are the same. You make a channel partner onboarding checklist, hire suitable channel partners, and communicate with them about your goals.

    One good example of a SaaS-based channel program is the affiliate marketing program by Shopify. Through this program, channel partners and the brand itself generate billion-dollar revenues.

    Shopify affiliate marketing program

    XI. Conclusion

    Now you know everything about channel partners so you can implement this marketing strategy to enhance your business. Channel partners greatly help companies reach their target audience and accomplish their goals. They are cost-effective and provide guaranteed results. That’s why you must choose the right channel partner program for your business. Let us know which types of channel partner programs you prefer!


    Why Do Companies Use Channel Partners?

    Companies use channel partners to promote and sell their products through a third party. This way, the company gains a bigger audience as well as better resources at less cost. Businesses flourish substantially through channel partner programs.

    What is the Difference Between Channel Partners and Distributors?

    A distributor sells your products directly to end users and doesn’t participate in marketing or branding. On the other hand, channel partners directly take part in branding, marketing, and selling your products. They collaborate with you to strategize the development, promotion, and sale of your product and help you reach a larger market.

    What are the Best SaaS Channel Partner Programs?

    The best SaaS channel partner program depends on your requirements as well as your services. But here are some world-famous and reliable SaaS-based channel partner programs:

    • HubSpot
    • Shopify
    • GetResponse Max Partner Program
    • Atlassian
    • Shipmonk
    • SemRush
    • Webflow
    Danielle M.

    Customer Success Coordinator

    LinkedIn icon

    Danielle is a dedicated Customer Success Coordinator with a flair for orchestrating optimal workflows for customers. She is well-versed in partner management.

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