This is a guest post written by Nikhil Singh, Director, Product Management at Support.com
Nikhil Singh, Director, Product Management at Support.com
1. Identify verticals where your prospective partners may have same target customer base and have common problem set that your product/service is resolving.
For example, in the tech support space, home users are common customers for both IT support service providers and electronic retailers. The retailers sell computers to customers and it is natural that they would like to go back to the same retail outlet if something goes wrong with purchased computer. There is a commonality between the problem that retailer and an IT Support service provider is going to solve and hence they can forge an alliance.
2. Identify your prospect partner’s business model.
You need to see how you can add an additional revenue stream to the partner revenue model which is substantial enough to generate interest. For example, going with the above retail example, it is a fact that a retailer sells electronic devices at a very low margin and unless volumes are not being met with he really can’t make much money. Tech support service providers in this case can help retailers by introducing premium support as another revenue stream that may bring in higher profit margins to them.
3. Assess the prospect partner’s potential customer base before coming up with revenue share
You need to assess the monthly volume that the prospect can generate. If it’s going to be high, reduce margin per SKU sold. If it is going to be low, you need to keep your share high. This is very subjective and totally depends upon your power of negotiation. If you are going to leverage a big brand name, it will be given that you will be squeezed on every transaction. However if you have multiple brands that you have partnered with you can charge premium as well.
4. Cover it with clear legal clauses
You need to cover yourself well with legal agreement that can safeguard your interest. You must specify SLAs and come up with clear agreements on failure cases and penalties if any in case you are not able to meet the SLAs. This is one of the most important aspect of successful channel partnership especially if you are offering services.
5. Good training and technical support
The channel sales success is dependent upon how best you have provided the training to their sales team. The training needs to be simple and easy to grasp if there is a technical angle involved. The time to train sales people should be very minimal. You need to figure out how you can keep sales up to date with product enhancements on an ongoing basis.