Make the channel strategic for growth by aligning incentives, providing training and creating a feedback loop.

April 20, 2023

4 Min Read
channel partnerships via CRO
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By Tom Lin

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Tom Lin

Amid macroeconomic challenges such as rising interest rates and inflation, technology vendors cannot ignore the multiplier effect that channel partnerships have on overall revenue. For example, 78% of organizations (registration required) say one of their biggest cloud challenges is not having enough resources or expertise to execute their digital initiatives and would benefit from working with a partner. Further, 60% of enterprises use managed service providers to manage their public clouds, and another 11% plan to use MSPs this year.

With that in mind, chief revenue officers (CROs) who don’t have a strategy for building channel partnerships as part of their integrated sales motion are missing a big opportunity to accelerate growth. CROs need to prioritize channel and work with partners on incentives, provide training and support, and create a feedback loop to ensure both parties are generating ROI.

Align Incentives

For years, organizations prioritized resale margins from their channel partners. While this is the one way to grow indirectly, it is purely transactional and fails to capitalize on the full potential of channel relationships. CROs should encourage their sales and channel teams to identify the broader ecosystem opportunity, meaning: the ability for partners to build services around your technology to better help their end-customers thrive amid many different cloud challenges. In fact, Canalys reports that the average ecosystem model — where vendors and partners work together to grow — has 10 times more partners than a transactional channel reseller model.

The best channel programs include mutual incentives as well as motivation and loyalty strategies for partners. For example, when you build go-to-market plans with partners, both parties should have a healthy level of investment and effort put into the relationship to ensure the best results. You can include marketing development funds, joint GTM plans, co-innovation of specific products to address partner needs so that the incentives are there for both parties — and in moving beyond a transactional relationship, you open more doors to growth.

Provide Training and Support

As the CRO, your primary goals are to increase revenue and achieve your company’s growth targets. For the channel, providing the proper training can not only accelerate time-to-revenue, but also encourage new revenue streams for partners. In fact, over one-third of MSPs report that advanced training is the best way for an ISV to incentivize them to adopt their products as compared to larger discounts or kickbacks on services.

But not all partners should be treated the same: Partners require unique training and support, and personalization can make a difference. For example, you may have a large enterprise partner and a small MSP using your technology. Their education, training and certifications may differ depending on how they are building services and what they need to be successful.

To ensure your channel teams are enabling partners effectively, CROs should add key performance indicators (KPIs) around training certifications, sessions completed or modules utilized. Training KPIs can be used as proxy metrics to identify increased revenue and satisfaction among partners. When partners know how to use your technology most effectively, they’re more likely to build compelling services around them and sell more to customers, ultimately increasing revenue for both organizations.

Create a Feedback Loop

In addition to providing better training and development for partners, your overall revenue strategy should include a feedback loop to learn from partners and enhance your approach to growth. Consider hosting quarterly or bi-annual offsite gatherings with top partners to understand their challenges and identify new opportunities to expand together, similar to how you may already have customer advisory councils. It’s important to align feedback from multiple sources of revenue — for example, indirect and direct sales — to better identify areas for improvement. As CRO, you can cascade that feedback to other areas of the business such as product strategy, marketing, sales operations and customer success. The goal is to ensure that the channel is a fully integrated arm of your revenue strategy.

Ultimately, including channel as a strategic piece of your revenue growth strategy and not an isolated function is critical to success today. To truly see channel as a revenue-driving piece of the business, the CRO can help make structural changes to channel relationships by aligning incentives, providing training and support, and creating a feedback loop. By elevating your channel relationships and the role of channel in the overall sales motion at your organization, you can drive growth even amid macroeconomic challenges.

Tom Lin serves as chief revenue officer for AvePoint. He previously was its chief customer officer and VP of sales, where he led the global enterprise, mid-market, SMB and channel sales strategy. He began his career there as the company’s first sales representative. You may follow him on LinkedIn or @AvePoint on Twitter.

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