The channel partner ecosystem is thriving. In 2023, channel partners helped increase technology sales and distribution by capturing 70% or $3.4 trillion of global IT spending.1 This number marked a 3.7% growth, outpacing the direct sales trajectory and highlighting the significant role of these partnerships.1
The numbers continue to rise. In one 2023 forecast, nearly 60% of partners were projecting 10% annual revenue growth, with a quarter anticipating a surge beyond 20%.2 And, 59% of those surveyed were planning to add headcount.3 This confidence can benefit technology vendors aiming to expand their market reach and accelerate sales cycles.
Let’s explore five ways technology vendors can strategically align with and empower channel partners to drive and capitalize on this progress.
1. Invest in partner enablement
Equipping partners with the right tools, resources, and training is a given. Partners are moving away from a generalized sell-anything approach and specializing in specific in-demand technologies like cybersecurity and AI.
Vendors can capitalize on these market shifts by offering their channel partners competitive intelligence, product training, specialization, and accreditation support. What’s more, partners who provide services in addition to products need to understand what it takes to deliver ongoing customer support. They rely on vendors to identify varying service tiers and response options. This investment in enablement boosts partner expertise and ensures they are well-prepared to advocate and sell products and services effectively.
2. Prioritize transparent communication
Building a foundation of trust and loyalty is essential in any partnership, and that can be accomplished through regular, open communication about product developments, marketing strategies, and market insights. This approach keeps partners in the loop and cultivates a sense of inclusivity, fostering more collaboration. Here are some resources that vendors can provide to enhance their communication with channel partners and set up mutual success:
- Solutions briefs
- Battle cards
- Customer presentations
- Regular updates
- Market insights
- Joint business planning sessions
- Co-marketing campaigns
- Marketing toolkits
- Dedicated support channels
- Partner portals
By providing these tools and adhering to industry-leading practices, vendors can ensure their partners are well-prepared, engaged, and motivated, ultimately leading to more sales.
3. Embrace a recurring revenue strategy
Recurring revenue models provide stability and encourage partners to focus on long-term customer relationships and value. They generate a consistent income from a product or service instead of one-time sales. Channel partners benefit through:
- Predictable income
- Reduced customer acquisition costs
- Deeper end-customer relationships
- Increased lifetime customer value
Vendors can use several strategies for recurring revenue, including offering multiple pricing options that include subscription tiers, usage-based models, and managed services. Along with staying transparent and investing in partner enablement and collaboration, this approach can boost long-term, mutual channel growth. Recently, some channel partners have reported even doubling their annual recurring revenue.4
4. Develop stronger relationships
The power of personal connections in business cannot be overstated. Investing in face-to-face interactions, industry events, and social activities can significantly strengthen relationships with key partners. These efforts in relationship building go a long way in fostering loyalty, understanding, and a collaborative spirit.
5. Apply data-driven insights
A thorough understanding of channel partners’ needs and performance is essential. Having in-depth information helps vendor teams tailor strategies to suit different partners, identify those with high potential, optimize partner engagement, and maximize the effectiveness of the partnership. Here are some industry-leading ways to track performance:
- Partner relationship management (PRM) systems: Implementing PRM systems can help streamline communication, manage leads, register deals, and share resources efficiently.
- Performance analytics: Sharing analytics with partners about how products perform in the market can help them tailor their sales strategies.
- Feedback mechanisms: Establishing channels for partners to provide feedback on products, services, and support allows for continuous improvement.
The channel is dynamic and evolving rapidly, and using every resource available to reach end customers makes good business sense. Creating, growing, and strengthening channel partnerships through enablement, communication, better financial options, strong relationship-building, and actionable insights leads to growth opportunities.
- Canalys, Channel partners will drive more than 70% of IT spending in 2023, Aug. 2023
- Demand Gen Report, 2023 Channel Partner Marketing Benchmark Survey, 2023
- Canalys, Canalys Forums 2023: Channel partners are investing in staff to drive differentiation, 2023
- BNN, Nerdio Doubles Annual Recurring Revenue with AI Integration and Partner Focus, Feb. 2023
