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Bring together the right tools and tactics to set your partners up for success.
Writers were aided by AI to draft these FAQ questions
By: Paul Bookstaber
Writer, Salesblazer
March 19, 2024 | 14 min read
Imagine you’re buying software. You hire a consultant to find the best sales software, purchase it through a reseller, and renew the license through third party support. Now, imagine you’re the software company. You just found a buyer, sold a product, and landed a renewal — all without ever making a single direct sale.
That’s the power of channel sales, or selling through partners with partner relationship management software. It’s a great way to grow your business without spending more time and money on your own sales team. Keep reading to learn the ins and outs of channel sales: why it matters, how we do it here at Salesforce, and how you can make it happen for yourself.
Channel sales (aka partner sales) is a B2B sales model where a company sells its product through partners. These partners come in all kinds of forms, from alliances to resellers to brokers, and they can step in to prospect, sell, and grow existing customers. Channel sales is also known as indirect sales because the company doesn’t sell directly to the customer.
Direct sales means your company sells straight to the end customer. For example, you sell a service through your website or a product through your retail store. But channel sales uses third-party sales teams to sell products instead.
Many companies use a mix of direct and indirect sales. They may have customers who prefer buying through a specific channel, while other customers might prefer buying from the manufacturer. Below are a few examples to help illustrate this point.
There are many different kinds of channel partners, depending on your business type and where they step in during the sales process. Here are the most common types of channel partners:
The benefits of channel sales all point to one thing above all: revenue growth. Consider this: In the world of software alone, channel sales revenue is expected to reach $70B this year — up from $30B in 2019, according to IDC . Below are core reasons why partner-driven revenues are on the rise:
For all its benefits, partner selling comes with a few common pitfalls. Here are key challenges and how to overcome them:
When building a channel sales strategy, you can’t go wrong by defining your ideal partner, setting them up for success with thoughtful onboarding, and supporting them with resources as they go out and sell. Here are the steps to take:
Before you seek out your partners, determine your sales goal and the type of partner that will support it. Then, choose a partner based on that profile. If you’re stuck, return to the “Why use channel sales” section above, and identify the best partner based on your goals.
For example, if you want to break into a new vertical or industry, then you’d want to find partners who have existing reach in that space. Or, if you want to improve the customer experience after the sale, then you’d want to find partners who can provide value-added services, such as training and support.
Get clear on these key questions before contacting potential partners or inviting them to contact you.
What can you offer potential partners? Your partners will want to know what type of support you intend to provide, such as comprehensive training, access to sales and marketing tools, technical resources, a dedicated account manager, incentives, and rewards.
What’s your value proposition? Here’s your chance to convey the value of the opportunity. Why would a partner choose to do business with you? Demonstrate the revenue that partners will gain from the collaboration over time.
What are your expectations of them? Outline the details of the partnership, including the total timeline, the products they’ll sell, and service level agreements (SLAs) for engagement. Agree on shared goals and sales metrics to perform against, like completion of training or certification, leads generated or converted, and total revenue brought in.
Your channel sales program needs dedicated staff to support it and your partners. Depending on the size of your company, these positions may be spread across many or a few individuals. Here are some of the key roles and responsibilities you’ll want to think about covering, along with key skills required for each.
Channel sales leaders are responsible for meeting partner revenue targets and improving pipeline health. They direct their organization’s channel sales strategy. They need years (often decades) of experience in the indirect selling motion, deep knowledge of the partner ecosystem, and a strong grasp of the business and its products.
Channel sales managers are on the front lines. They’re responsible for building relationships with channel partners and direct sellers, and opening up lines of communication between both to support collaboration. Channel sales managers also need to understand the customer, the product, and the market to recommend new insights that grow revenue. Finally, they monitor channel sales metrics (more on that below) to optimize the channel sales program by overcoming issues and capitalizing on opportunities.
Channel marketing managers are responsible for creating materials and campaigns that partners use to market directly to your end customers. Channel marketers must be very clear on the value proposition of products and services and how to position them effectively.
Channel operations managers help partners become productive and successful by building out scalable sales tools and processes. One important responsibility includes designing and managing the partner portal, where partners log in to access resources and get deal insights
Once you’ve defined your team, sales goals, and program structure, it’s time to recruit your partners. Here are two approaches:
Inbound recruitment: Inbound recruitment happens when potential partners come to you. For instance, you can set up a form on your website where potential partners can express interest in selling your products. Then, someone inside your company can vet the application and determine if the partner is a good fit. This can be a cost-effective way to grow your partner network, but you may need to supplement this with outbound recruitment to attract the right partners for your needs.
Outbound recruitment: Identifying and contacting partners proactively rather than waiting for them to contact you is another option. For instance, many vendors rely on events like trade shows to highlight their solutions and attract prospective partners. These initiatives can be time-consuming and costly but may be effective in helping you find the ideal partners.
Remember that while new partners likely have industry experience, they may not know your product inside and out or understand how to make it relevant for each region, industry, or persona. That’s why partner onboarding is so important.
Onboarding also gives partners a first impression of your business and how easy it is to work together. Don’t wait for partners to request materials. Instead, guide partners through a step-by-step process and offer thorough training on sales must-knows, helping them ramp up more quickly.
At a minimum, your onboarding program should get partners up to speed on the following:
Personalize the partner experience with relevant content and recommendations. Onboarding should be trackable so you can see a partner’s progress over time. If a partner plans to sell one specific product, don’t overwhelm them with specs on other products that aren’t suitable for them.
For more about onboarding partners and personalizing the partner experience, check out this Trailhead module.
You’ve brought new partners up to speed, but the race isn’t over. They need ongoing support throughout their involvement with your company. Below are some ways to show your support and set partners up for success.
Provide instant access to product resources: In addition to onboarding materials, partners need just-in-time information to help them address specific customer issues. These include product specs, marketing assets, and presentation templates. Make these resources available on demand to make partners more productive and reduce back-and-forth with your channel managers.
Offer support through peer groups: Be sure partners have a communication line open for when questions arise. You can also consider offering an online sales community for partners, where they can find applicable success stories, ask questions of each other, and share best practices.
Provide prepackaged campaigns: Some partners don’t have a dedicated marketing department or resources, so offering them prebuilt campaigns, trade shows in a box, or brandable content makes it easier for them to market your offering.
Most partners work with multiple companies — including your competitors. That means you want to stay top of mind with partners and motivate them to sell your products. Here’s how:
Create an incentive compensation program: Salespeople tend to be driven and competitive, so creating performance tiers for partners to attain can keep them engaged with your brand and excited to level up. Be transparent about the benefits of each level, such as better margins or other incentives. Use charts and dashboards so partners can monitor their progress and tap into their competitive spirit.
Celebrate partner success: Highlight both the big accomplishments and small wins of a variety of partners. Whether a mention in an email newsletter, a banner in your partner portal, or a speech at a partner summit, these shoutouts will make your partners feel proud and valued. Plus, the rest of your partners will be eager to see their own names in lights.
Know when to fold: One of the reasons why it’s so important to define goals is that you have a way to effectively determine when the partnership isn’t working. Data can provide you with validation for a sometimes difficult decision to part ways. For example, you might agree on revenue benchmarks after a certain time period, and end the relationships if they’re not met.
To measure your channel sales, monitor metrics that track partner contributions to revenue and pipeline coverage (the revenue amounts represented by deals currently in the pipeline). Here are the most important metrics to look at:
The key to successfully tracking all of these is ensuring you have partner relationship management (PRM) software as part of your CRM. This keeps all of your sales data and functionality in one place, making it easier to track performance. It’s also easier to create individual partner goals.
Insights by Ryan Nunez, Vice President of Partner Alliances, Salesforce
At Salesforce, more than 90% of our deals over $1M have partners involved. Big deals don’t get done around here unless partners are engaged. That’s because selling doesn’t just happen during the sales presentation. It happens in all the little interactions before and after — from the huddle with the reseller in the parking garage, to the back-channel phone call to the partner: “Hey, can this company really deliver like they say they will?”
To make sure we’re influencing all those conversations, we seek to build surround-sound deals, where prospects are surrounded by partners who help identify opportunity and drive the deal forward. Here are three examples of how we make that happen.
1. We lean on partners and channel sales to identify and increase customer value before and after the deal is closed
We’re thinking about how to excite partners to work toward adoption and business outcomes for us to keep customers. It’s requiring us to reimagine a closed deal as the beginning of something, not the end. The renewal date looms in the future, and we have to do everything we can to make the customer be successful and get them to stick around and buy more.
So we’re beginning to focus our partner sales program on the pre- and post-sale experience, and we incentivize our partners to keep growing our customers into the future. We’re making progress on this vision by defining new roles for partners who drive customer success, such as Partner Engagement Managers, Partner Solution Engineers, and Partner Sales Acceleration Leaders.
We’re also defining key milestones in the post-sale journey. At Salesforce, that includes post-sales handoffs and sharing a wealth of enablement materials. Tracking these milestones helps us know whether we’re on the right track, and our partners are uniquely qualified to drive this success-minded motion.
2. We use a reseller portal to provide real-time updates on channel sales deals
We used to see our account executives struggling to gather updates from reseller partners. It took multiple follow-ups and a pile of documents to share information. So we worked with our technology team to build a new portal — using Salesforce PRM software — that helps our sales team and our partners collaborate more easily. This portal integrates with Slack to fit with modern ways of working and honor the reality that our sellers are constantly on foot.
Today, our resellers manage leads and opportunities directly through the digital partner community and our sellers can see updates on their mobile devices. They can also see updates in fields for sales stage, close date, and partner comments. Of course, there are pre-built reports and dashboards that give resellers a snapshot of their book of business, including insights into sales performance and trends. This makes it easy to identify the next best actions and jump-off points for new sales plays.
3. We evaluate partner involvement and channel sales opportunities during forecast calls
Every week, we meet with our account executives on forecast calls and try to understand the health of their deals. One of the most important questions we ask during these calls is: “How is the customer planning to implement this — and which partners are you talking to?”
If partners are not identified in a large deal, that’s a red flag for two reasons. First, they bring in specific industry, domain, or market expertise. Second, they’re instrumental in expanding the view of our customer relationships, priorities, and obstacles. So, we coach our sellers to look at existing partner relationships associated with the account and opportunity, and to identify partners they’re perhaps not talking to, or who can be brought in to strengthen a customer’s plan to consume and use our technology.
To help the seller find partners, we have an inside partner team with field coordinators and partner alliance managers. They use Partner Finder and AgentExchange to identify the best partners based on qualities like their industry and relationship depth, footprint on existing accounts, certifications in our technology, and whether they’re running similar sales plays. This partner matchmaking helps us all improve our pipeline health, deal-size, and likelihood for success — bringing our biggest deals to life.
An effective channel sales program helps you grow revenue without growing costs. What could be better? By thinking through each step of the process — from recruiting and onboarding, co-marketing and selling, all the way to specialization and success — you can reap the long-term benefits of indirect selling.
The main benefits of channel sales include enhanced brand awareness, expanded market reach, and increased revenue. Partners can introduce your brand to their own client base, which offers you a level of trust and credibility. That can help you gain traction in new markets more quickly, which can lead to a revenue boost.
Best practices for effective channel sales partner management include: setting clear and fair rules of engagement, setting mutual goals, and creating an efficient process to register deals. To do this effectively, companies should support partners with the necessary tools and training to help them succeed. Channel managers should report regularly on lead activity and sales pipeline metrics to measure progress.
Key aspects of channel sales include channel strategy, partner recruitment, partner training, performance monitoring, and incentive program management. Effective channel sales also requires building strong relationships with partners and setting mutual sales goals.
Channel partners often include resellers, independent brokers, traditional retailers, and affiliate marketers. These partners help companies expand their market reach and sales opportunities.
Challenges of channel sales include managing partner relationships, ensuring consistent brand messaging, and maintaining control over the sales process. Some companies may also face difficulties in tracking sales performance, providing adequate support to partners, and aligning partner goals with their own business objectives.