You cannot build a strong indirect (partner) channel if you don’t know what it will do for your business. Therefore, it is critical to create clear business objectives and define the role an indirect channel will play in achieving them.
Basically, an indirect channel can play four roles, though they are not mutually exclusive. They are:
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Lead generation – An indirect channel like Amazon.com’s Associate program could be used to generate business leads that other channels can close and service. iBank, for example, is a good lead generator for lending institutes.
Lead-generation partners are appropriate for businesses who are perfectly capable of performing all the tasks in a sales processes, yet want to build a larger lead stream than can be serviced with in-house resources.
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Selling – Manufacturing reps, brokers, wholesalers, retailers, online marketplaces, etc. are all examples of selling partners.
Selling partners are suitable for a business that cannot afford a large enough sales force, or cannot reach enough customers in dispersed markets to capture available sales opportunities on its own.
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Service/Support – Examples of service/support partners include authorized service and support centers for Sony televisions and BMW cars; towing partners of AAA; aggregators and/or implementers of software solutions such as Accenture; and outsourced customer service call centers.
Service/support partners are suitable for businesses with complex products that require maintenance or support programs to mitigate customers’ risks.
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Proxy – Proxy partners perform all the tasks in the sales cycle e.g., a McDonald's franchisor, Liberty Tax Service, InterContinental Hotels, KMart, which is a licensor of Martha Stewart's Everyday houseware line, etc.
Proxy partners are suitable when the business objective is fast market share growth with little or no investment.
Some businesses hire one partner for a typical role e.g, Amazon's Associate program is only used to generate leads, while others set up different partners for every role. For example, a company might have "master distributors" to cover a geographic territory; local distributors working through the master distributors to move products within those regions; aggregators to combine these products into solutions; and an authorized service center to support customers after the final sale. The auto industry is a good example of such an elaborate partner network. Then there are companies that seek a single indirect channel that can generate leads of its own, sell products to them, and provide post-sales service and support. Best Buy, for example, generates its own leads to sell HP computers, and offers maintenance and support services after the purchase.
When it comes to designing a partner network, or assigning roles to different partners, there are many possible combinations. The key is to make sure that each type of partner has a role that makes sense in the broader context of the sales process, and that the whole system of multiple channels works together seamlessly to create loyal, repeat customers.
Related:
- Build the management team
- Define the role of the channel partners
- Establish the scope of the indirect (partner) channel
- Establish the polices under which the indirect (partner) channel will operate