Channel Partner Ecosystems are more than just the latest industry trend. They are helping vendors expand their customer reach while increasing mutual revenue opportunities for Vendors and Partners. In a recent survey conducted by Channel Marketer Report for Channel Sales and Channel Marketing professionals, more than 80% of respondents would like to expand their number of channel partners. Nearly 70% identified that they would like to increase the financial investments in their Channel Partner Programs to achieve their overall corporate revenue goals. As you build or expand your Channel Partner Ecosystem, it is important to develop trusted relationships with a diversified set of channel partners, working together to deliver robust business solutions to your mutual customers. Read on to learn more about Channel Ecosystems.
What is a Channel Ecosystem?It takes a diverse set of Vendors and Channel Partners working together to make a Channel Ecosystem. How that looks and what that means for your business can be very different from one Vendor to the next. For some, a Channel Ecosystem refers to a defined set of channel partners that address a defined business problem and provide a technology stack made up of multiple products working together to provide a complete solution. Others refer to the channel ecosystem as the larger community of channel partners that include reseller and managed service partners providing a full suite of services, technology innovation, or any other type of general customer product offerings. Each Vendor's Channel Ecosystem is unique. What defines that ecosystem as healthy is based on the value it brings to the Vendor's end customer's value proposition. How well a vendor's channel ecosystem is working and how much revenue is being driven by the channel is the first part of what you are looking for when you define the health of your partner strategy. Some questions that go into analyzing this include:
- Is the partner channel meeting the strategic objectives of the Vendor?
- Is the partner channel sustainable? Is it driving the expected ROI?
- Is the end-user experience enhanced with the help of channel partners?
- Are the Channel Partners satisfied with their relationship with the Vendor?
- Are the Channel Partners profitable and demonstrating product or service growth?
Measuring Channel Partner Ecosystem Health!Channel Partner Ecosystem Health refers to the metrics you use to measure how efficient the relationship is in driving your sustainability and productivity within the channel. There are multiple types of metrics you can use, and we would like to share them.
Steps for Measuring Channel Partner Ecosystem Health!
1. Identify your Strategic Channel GoalsBuilding your Strategic Channel Ecosystem Health Metrics starts by identifying the strategic objectives you are trying to achieve through the channel. You can use these objectives to see how your channel is performing. They can include:
- Getting access to additional geographical markets, global or local
- Is your channel allowing you to break into a new technology market segment?
- Are you able to expand product adoption into new customer verticals?
- Have you built relationships with Channel Partners already in the role of trusted advisor to end-customers, and have established business processes and offered turn-key solutions to address your customer's needs?
- Do your partners allow you to gain additional pre-sales services such as defining customer requirements, project scoping, and responding to RFQs, and are these partners providing post-sale services associated with configuring, installing, training, provisioning, and change management?
2. Define your Channel's Financial Health MetricsWhile a Healthy Channel Ecosystem will generate revenue and market share growth, it is still important to watch the financial metrics that indicate strong economic health.
- Are you developing Channel Ecosystems that provide you with cost-effective logistical benefits, and do they enhance your channel efficiency? How do they compare to your existing internal teams and processes?
- Are both you and your partner able to maintain profitable margins? How do your partners do in terms of the overall channel? Do you have partners that perform higher and bring in more opportunities than other partners?
3. Operation Channel Ecosystem Health MetricsThese metrics are often considered "levers and knobs," which can drastically manipulate financial and strategic outcomes. These are also known as the KPIs that give you an insight into how you can optimize your performance to attain the objectives.
- Do you have effective Partner Onboarding practices in place to kickstart the appropriate enablement process?
- What other activities can help engage Channel Partners to attain channel effectiveness? Typical programs' effectiveness may include deal registrations, joint business planning, MDF, and various incentives and rebates.
- Have you started to pass qualified leads to your partners? They are an excellent way to build a stronger relationship and can be used as leverage to keep a channel partner's contacts fresh.