Reap the Rewards (and Avoid the Risks) of Channel Management in Sales

By: Peter Strohkorb
July 8, 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 organization’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 organization up for channel sales success.

• What is channel management?
• Why is channel management important?
• Four best practices for channel management
• How to support channel partners
• Tips for choosing channel management software

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:

• Heightened brand awareness: The right channel partners implement marketing strategies that attract the right audience. And by showcasing your product across multiple strategic channels that already reach the audience you want to target, they help boost awareness of your brand and your product — often in less time and more cost effectively than you could alone.
• Improved business outcomes: By aligning with strategic channel partners and then building mutually beneficial relationships with them via strong channel management, you can achieve better alignment with your target audiences. This leads to higher conversion rates, sales numbers, and profitability on both sides.
• Better customer experiences (CX): Your channel partners become part of your CX. When you foster positive business relationships with them, including necessary product training and support, they can deliver great experiences.

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 program 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 analyzing channel performance. Encourage each channel manager to seek feedback. Train them to ask open-ended questions such as:

• “How can we better support you?” Their answers may give you helpful insights on working styles that harm rather than help them, ways to keep them better informed on your product or sales analytics updates, and how to better spend your MDF to support their sales efforts.
• “How can we help you support our customers?” Think of your channel partners as your front line. They interact more directly with your end customers, so they’re better positioned to gain a deeper understanding of what those customers need and expect. Listen to what they can share about how customers use your offering and whether there are ways to improve the overall customer experience.
• “What are other organizations doing that we aren’t — but should be?” Your channel partners don’t just work with your organization or sell only its products. They interact with myriad other companies, and whether those others are similar to your company or not, your channel partners may have seen successful strategies that you haven’t considered.

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).

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:

• Keep the lines of communication open: Share the latest updates on products, incentives, and promotions without being overwhelming. Ask for partners’ insights on how to get their sales reps’ attention. One thing that rarely works? Daily emails with new product updates. This is lazy, and it usually gets ignored. Instead, focus on creating personal connections. Pick up the phone, offer help, and ask questions. Some channel managers I’ve worked with have seen huge success with live web conferences they promote ahead of time by calling with personal invitations and emailing agendas to pique interest.
• Offer convenient support and training: Help your channel partners learn all they need to know about your product or service — and how best to support end users. Create searchable content libraries and offer tools that help them deliver the information customers need to close the deal.
• Be forthright about performance expectations: While onboarding channel partners, share how you’ll measure their success, including the metrics you’ll track. Then you can pinpoint issues and address them before they grow into a larger problem.
• Use technology to optimize the sales process: The right CRM technology offers tools powered by artificial intelligence that support sales efforts. These can help you track leads through each channel partner’s pipeline and share sales enablement tools that support their performance.

The right channel sales management software will strengthen channel partner relationship management, championing channel sales with the following processes and features:

• Workflow paths that guide partner onboarding, training, and certification with integrated collaboration tools, such as Slack, help to connect all parties
• Online communities to communicate with and support channel partners, keeping them up to date on best practices and promotions and on target with sales goals
• Dashboards that track leads and opportunities in partner pipelines, giving everyone access to the same information to check against goals and guide priorities
• Artificial intelligence (AI) tools such as next-best action and generative AI to aid channel partner success
• Mobile apps that channel partner reps can use across devices in any location

Your channel managers are the calm and steady tightrope walkers bridging the gap between your organization 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.