What to Look for in a Channel Program

Indirect sales partners must evaluate many criteria before entering into a distribution agreement with a supplier. These include the viability of the vendors product in the market, the companys financial stability and how easy it is to do business with the company. This last point brings up a host of considerations that partners should look for in a channel program.

Strategic Recruitment. Recruiting too many partners or more specifically too many similar partners sucks supplier resources and makes it more difficult for individual agents to be successful. Instead, channel managers should specify the partner profile, identify partners that match the profile and focus recruiting efforts accordingly, says Michael Fair, president of MarketRace, a consulting firm that focuses on developing channel programs. Successful programs, he says, constantly recruit new types of partners to reach new verticals or market segments.

Fair Contracts. Because agents do not operate an asset-based business, they must seek to protect their revenue streams by the only means at their disposal the carrier (or master agent) agreement. What constitutes a good contract may vary from agent to agent, but there are some protections that agents should seek.

On-Time and Accurate Commissions. Look for vendors that pay commissions accurately and on time, preferably using direct deposit. They also should provide detailed online reporting capabilities.

Dispute-Resolution Processes. The supplier-partner relationship, like any other, can have its share of disagreements. Whats important is that there is a formal process in place for escalating problems and mediating disputes.

Tools and Systems. Channel partners require complete access to portals that facilitate pre-sales activity and also give them direct access to carrier systems that enable them to submit orders; manage moves, adds and changes; enter trouble tickets; and monitor provisioning status. Fair says partners should look for a supplier with these types of systems that enable its partners to be self-sufficient and facilitate a tighter relationship.

Channel Integration. Look for suppliers that minimize channel conflict and allow teaming between direct and indirect sales organizations. Some suppliers create different pricing, promotions and support for products and services sold by its channels. Instead, Fair says to look for a vendor that enables its partners to compete fairly against alternate distribution channels.

Partner Enablement. Contract signing is not the basis of a provider-partner relationship; it simply marks the point when the hard work starts, says Fair. He says partners should look for vendors that offer on-boarding and training at the outset and follow with ongoing management, including proactive support, responsiveness and accountability.

Predictability. Consultant Wayne Thomas, CEO of Thomas & Company, says the most successful channel programs are those that offer partners predictability. This may take the form of consistent partner policies, stable staff, on-time installations, accurate commissions, etc. A pattern of performance goes a long way to ensure that agents will receive promised benefits for their work on behalf of a vendor.

Feedback Loop. Vendors should seek regular input from their channels both on the program and on the vendors competitiveness in the marketplace, says Fair. He suggests partners look for vendors that hold partner summits or advisory councils that solicit such feedback.