Why you need to segment your channel

7 min read By October 27, 2022 No Comments

In our previous blog we talked about why it made sense to split the channel up into three different types. The influencer channel, the transactional channel, and the retention channel. But the key point of that segmentation and what’s often missed is there’s no point segmenting your channel if you’re giving it to the same salespeople.

Your partner success team or channel account manager can’t be expected to manage both service providers and ISVs and transaction resellers. Instead, build segmentation into your channel, then build sales and marketing efforts that support each part.

Deal facilitations vs deal creation

Deal facilitation and deal creation are two different sales approaches.

They require two different levels of support and two different types of partners.

In order to facilitate deals you want massive breadth. The important question to ask your partners here is how many end-users do they reach? When it comes to creating deals, the amount of end-users is less important. It’s about being proactive in the technology and sales process.

You should focus on providing different levels of support, depending on what you want to do. Yet so often we just see, channel is channel and partnerships are partnerships. Let’s throw everything together and hopefully some of it will work.

Where’s the strategy in that?

If you want your channel to be successful, then you need to pivot far more to channel by design, not channel by accident.

Deal facilitation

A great example of deal facilitation would typically be a large IT reseller. They sell a lot of different technology to lots and lots of end-users. They add value through their strong (and often long-term) relationships with IT buyers. They provide outstanding operational delivery. And have good relationships with many vendors.

These partners are typically not specialized in networking or security or communications, or any of these different verticals. They do a lot of business, which makes them highly valued. Partners that do this extremely well, like Bechtle in Germany and right across Europe, are the top partners in the world.

They facilitate business, deliver value, and drive volume. But all at a facilitation level.

Deal creation 

Deal creation partners are typically a lot more specialized.  A good example is an AV reseller. They usually only have 30 to 40 high-value end-users – but those names could include Pepsi, Sony, and Amazon.

These partners might do all of the meeting rooms globally for these end-users. It’s considered deal creation because they’re taking technology into those end users to educate them on what’s new.  They really provide a very specific but significant amount of value.

So they create business and deliver value at a smaller but deeper level.

Which channel should you focus on? 

When designing your channel it’s important to understand what you are trying to drive:

  • Deal creation
  • Deal facilitation
  • or a combination of the two

Once you figure that out, think about what you need to be able to support your efforts. What kind of infrastructure is needed for an affiliate marketing program for instance. Marketing collateral, ease of sale, deal registration, everything built and set up so that partners can focus on creating opportunities easily.

Why you need to segment deal facilitation and deal creation 

Both have their place and both are incredibly important. But vendors need to decide how and why they want to each win with each and build a strategy accordingly.

Too often the same channel account manager is managing a tech partner and an AV partner. It’s a big ask from a salesperson because they include two very different types of sales cycles.

One partner may have a thousand salespeople and one partner has 12. A much deeper level of education is required for the 12 than the thousand. And that’s a very complicated thing to manage. But too often vendors simply throw everything on one pile.

The value of alliance and tech partnerships

The importance of co-selling

In the example of an AV partner doing deal creation, we gave the example of a meeting room. When it comes to a partner creating an offer to an end-user for a complete solution like a meeting room, they can never do it alone.

Just look at the different vendors they need:

A video bar to record.
A speaker to hear each other talk.
A screen to see each other.
The video-calling tech itself.
And a conferencing solution to connect everything.

Five different brands for one solution. And the interesting thing is that end-users aren’t specifying which brands they are looking for, they usually just want one solution.

Alliance partnerships

This is where Alliance partnerships originated from a hardware perspective. In the example above – and many others like it – partners are invaluable as they tie everything together and bring that complete solution to the end user.

This goes to the next level in software. Most hardware vendors have 20 to 30 alliance partnerships that they put effort into. Then there are companies with have hundreds or thousands of alliances like HubSpot and Salesforce. Everybody wants to tie into their platform and into their ecosystem. So they create an integration.

But as soon as an integration is created, then you only have an integration.

Where tech and alliance partnerships come together

And that’s where we really see tech partnerships rising. If you just create the integration and you put it on a marketplace, nothing will happen. It’s one of the reasons that tech partnerships are rising. Software integrations require joint innovation.

Integrating your products leaves you with a joint value proposition that provides more value to the end user than the software on its own. But in order to get this value to the end-user you need to start co-marketing together.

That creates combined customer cases that you can show to your customers and to new prospects. Or you create webinars or live events together. Start account mapping and co-selling together. Leverage your combined customer base and provide combined value, which in turn will lead to an increased customer lifetime value.

Account mapping gets you a lot more (high-value) prospects, and warmer introductions. It’s where tech and alliance partnerships come together.

Beware of silos

Deal facilitation and deal creation. Alliance and tech. IT and hardware. Tech and channel partnerships. Creating distinction is good and often necessary, but beware of creating silos.

This can be especially apparent in tech partnerships and channel partnerships, especially in terms of end-user control. Whoever is talking to the end-user should be correctly educated and incentivized to sell the ecosystem solution.

In channel partnerships, if you manage an end user and you sell to that end-user you’re paid on everything. In tech partnerships things can get a little tricky.

Partner one and partner two create an ecosystem approach and any quota relief done on either side drives the right output. But where the complication arises, is when one tech partner needs the other far more than vice versa.

One of the partners owns the deal and the others are tying into those deals. You need to drive value from all sides for partnerships to work.

Segmentation is an important part of building your channel. Decide which play you will focus on – or both – and create separate business cases for each. Don’t overwhelm your own salespeople by making them manage all different partners. Know where to add value in each partner deal. Are you getting the most out of your channel, alliance, and tech partnerships? Create distinction, but beware of causing silos.

Listen to the full episode of Partnerships Unraveled in which we discuss tech partnerships and channel partnerships, whether the channel is under threat from SaaS, and the importance of segmentation

Cassandra Pizzey

Cassandra Pizzey

A Channexteer since 2021, Cassandra has been copywriting for the past 10-years, broadening her horizon as content marketer since entering the B2B SaaS industry. Connect with Cassandra on LinkedIn for more.

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