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Learn how to expand your reach into new markets with the right channel partners.
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By: Peter Strohkorb
8 July 2024 | 9 min read
The term ‘channel management’ is pretty straightforward, but the actual practice is more complicated than it sounds.
Like a tightrope walker, a channel manager must delicately balance their organisation’s goals with those of its channel partners. The people who fill this role must understand the many different types of partners so they can work effectively with each one. Here, we’ll cover best practices that apply to every channel, including what to look for when hiring channel managers, so you can set your organisation up for channel sales success.
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Channel management is about coordinating a mix of internal channels, such as proprietary retail and e-commerce, and third-party sellers. For the purposes of this article, I’ll focus on managing third-party sales.
While sales management typically involves planning the overall sales strategy and leading your direct sales team, channel management focuses on channel sales partners such as distributors, resellers, third-party e-commerce, and retail stores that sell your offering to end users.
These partners play a major role in marketing and selling your product, so it’s imperative to build a true partnership with each one. The best channel sales strategy has the right mix of partners and a plan for managing relationships with training, support, and accountability in mind.
Channel sales allow us to connect with strategic partners that already have credibility with our target market. But if we were to leave a channel to its own devices, there’s a chance that nothing would happen. Even worse, you might have a bit of a mess on your hands.
While that may sound alarmist, remember that channel partners aren’t just selling our products. Sometimes they sell those of competitors. When sending leads to channel partners, you want them to respond with your product or service rather than someone else’s (maybe one that offers a higher commission). This is why it’s essential to offer meaningful support and build mutual trust.
When you handle channel management well, you can achieve:
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Successful channel management starts with selecting and implementing channels that can reach and serve your target customers. But it doesn’t end there. Use these distribution channel management strategies to support your channel partners and ensure they hold up their end of the deal.
Channel managers work within sales operations teams to manage the agreements and relationships between your company and specific channel partners. But they don’t have authority over these partners. To hit their sales goals, channel managers must strike a balance between supporting partners and holding them accountable. They might partner with each channel on growth strategies adjust sales plans to increase profitability. To achieve the delicate balance required to foster strong channel relationships, the most effective channel managers are firm and fair, diplomatic and persuasive.
Most channel managers have earned a degree in business or marketing, though some may instead have studied a discipline otherwise related to your industry — especially if they’re skilled in interpersonal communication and training. In many cases, they have experience with customer management software such as Salesforce.
Choose channel partners that fit your sales and marketing strategy. Consider your target markets as defined by your company leaders in your business plan and likely deeply researched by your marketing department. You can also look to customer data in your customer relationship management (CRM) system for live trends involving your current customer base. Consider any future initiatives that may affect or change the target marketing. Then look for channel partners that already sell to those customer bases. It’s also wise to build a balanced roster with various types of partners. That helps insulate you if one type of channel meets with sagging customer interest.
All too often I see channel managers use MDF to send swag to their channel partners. Will yours be excited to wear a hat with your logo on it if others are sending them similar items?
Be judicious and innovative about incentives. Partner with your marketing team and try new things, including ways to support your channel partners’ sales. Try covering the costs to create and send them marketing materials they can use to support their sales efforts. You might also sponsor incentive trips, training events, or sales conferences. I worked with a client to create a channel partner acceleration programme that included a kickoff conference with training modules on the product and sales techniques. That was the foundation of a great relationship. The channel partner has exceeded its quota ever since. Why not try it out? If your partners need some skin in the game, split the cost and provide your half from your MDF.
It’s my (perhaps unpopular) opinion that we should all track the leads we pass to channel partners. This practice is commonplace in some areas. In the U.S., for example, secret shopping is considered normal and acceptable. A business hires a sort of secret agent to act like a lead that they send to channel partners to see whether those partners direct them to their offering (or another’s) and to get a sense of their customer service.
But in other areas, such as my native country of Australia, asking to track leads can come across as overstepping. That doesn’t mean it’s not a worthy practice, however. Train your channel managers to broach the topic with channel partners and use it to guide and strengthen partnerships.
Take time to ensure each channel aligns with your sales objectives and target market. You also want to maintain a consistent experience for customers across all channels. It requires a balance. You must nurture channel partner relationships and follow up on the leads you send them to gauge how they serve their customers.
Your channel management strategy starts with careful recruitment and training for channel partners as well as ongoing support. You also need a plan for monitoring and analysing channel performance. Encourage each channel manager to seek feedback. Train them to ask open-ended questions such as:
This shows you care and will likely deliver useful ideas for improvement. Acknowledge and thank partners for their input. Share the actions you’ll take based on their feedback (or explain why you can’t).
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We also need to talk about competition. How do we focus our partners on selling our product over another’s? It’s about ensuring there’s enough reward in it for them and creating mutually trusting and beneficial relationships between channel managers and channel partners. Here are a few ways to do that:
The right channel sales management software will strengthen channel partner relationship management, championing channel sales with the following processes and features:
Your channel managers are the calm and steady tightrope walkers bridging the gap between your organisation and your channel partners. Even the best use balancing rods, and the platform you use to support their efforts is the exact tool they need to manage those relationships with a finesse that helps both sides win.
See how to give partners clear onboarding goals and automated business insights to grow faster, together.
A sales channel manager develops and oversees a company’s sales channels. They work with partners to create strategies, manage relationships, and ensure that all channels align with the company’s goals to increase sales and expand market reach.
To prevent conflicts between sales channels, businesses should set clear rules and boundaries for how each channel operates. This can include defining territories, offering differentiated pricing, and establishing fair incentive structures. Open communication across teams also helps maintain alignment and trust.
Choosing the right sales channels begins with understanding your target customers and their buying preferences. Use customer data from your CRM to determine where your audience already engages and which partners effectively reach those markets. Assess each channel’s reach, cost, and how well it aligns with your sales strategy to promote sustainable growth and positive customer experiences.
A CRM system manages direct customer relationships and sales data while a channel management system focuses on managing partnerships with resellers, distributors, and other intermediaries. Together, they create a connected system that gives companies full visibility into both direct and partner-driven sales.
Effective channel management begins with selecting partners that align with your sales strategy and target market. It also involves providing consistent training and support, setting clear performance goals, and maintaining open communication to address issues early. When managed well, these partnerships lead to stronger sales, better customer experiences, and mutual growth.
