Introduction

Channel management is complex primarily because of what it tries to manage. The word “management” implies some level of control to achieve performance from an individual or from a team, either through inspiration or through some level of enforcement. The meaning of “management” varies greatly when it comes to an organization’s structure—depending on whether it’s a startup, a more mature company or a governmental organization like the military. However, in every one of those instances there is a direct relationship between the manager and the subordinate or employee or team member. In the case of a reseller network or a partner network, that relationship is very different, and it presents some unique challenges. Let’s take a moment to explore those challenges.

Challenges

1. Channel partners are companies, not people. Ordinarily when we talk about management, where there is some level of control over employees or consultants or contractors, we are exerting some level of control over people. But when we talk about managing a channel, the level of control is much lower: first of all because it’s an indirect sales force and, second, as I’ve already noted, we’re managing companies, not people. Of course those companies are made up of people—sales people, technical people, marketing people—but in the end we’re trying to manage an entity rather than individuals. That’s an important difference that creates a huge amount of complexity.

2. Channel partners do not report to vendors. In the case of a direct sales force, there is a hierarchy. You have a manager who reports to a director who may report to a VP, but with a channel organization, you have a company reporting to a channel account manager or a partner business manager. That reporting relationship is indirect. If some partners don’t perform over one or two or three quarters, they don’t get fired for missing their mark. They may miss some incentives, but they don’t get fired for poor performance. Eventually, if a partner doesn’t perform over a long period of time, that partner may be replaced, but it doesn’t happen as quickly as it would when you’re managing a direct sales force.

3. Channel partners have their own priorities. The challenge here is that those priorities do not necessarily align with the priorities of a vendor. If a vendor is trying to promote a specific product or trying to penetrate a specific market—say, verticals like manufacturing or healthcare or whatever–it may or may not be in the interest of the partner to carry out those activities. So it’s crucial for the organization to understand what the priorities of those partners are instead of randomly pushing programs and deploying resources.

4.There are different types of partners, and they require different engagement models. Some partners sell to small and medium-size businesses (SMBs), some partners sell to midmarket organizations, some sell to enterprises and some sell to all or a combination of two or more segments. For an organization to align behind the needs of various types of partners, have appropriate programs and make them meaningful requires a significant level of thinking and homework which, a lot of times, companies skip. Therefore, many of the initiatives that are rolled out in the channel don’t really have an impact. In addition to differences in types of partners—what we might call practices or areas of focus—there are also differences in relationship based on revenue. Partners who are larger—larger in the sense that they carry a bigger portion of a vendor’s revenue—tend to more important to the vendors than those partners who don’t carry a lot of products. Aligning the appropriate level of resources with high-velocity and high-volume partners vs. low-velocity, low-volume partners is critical, and that can make channel management quite complex.

5.