How to Perform Effective Partner Management

By Diana Ramos | May 13, 2020 (updated August 5, 2021)

In this article, we provide the top expert advice on how to successfully manage your channel and non-channel partners, and detail benefits and challenges of partner management.

Included on this page, you’ll find an overview of partner management, strategies for successful channel partner management, and tips on managing other potential partnerships.

What Is Partner Management?

Partner management is the process (and related framework) by which organizations guide and manage partnerships, so they prove effective and profitable. Organizations around the world are increasingly working with strategic partners.

Partner management is about establishing a structured system that helps an organization choose and manage partners effectively. With such a system in place, your organization and partners will ultimately reap increased profits and success. Partner relationship management is a much more limited concept, generally involving tracking and communication software.

There are two primary types of partners:

  • Channel Partners: These are organizations that partner with your company to sell or market your products or services.
  • Other Partners: These include organizations that you collaborate with strategically in areas other than sales and marketing.

What Is Channel Partner Management?

Channel partner management is the process by which your organization assesses, recruits, and manages channel partners (i.e., those partners that help sell your products or services). 

Organizations may also set up frameworks to analyze and manage channel partners; frequently, these frameworks have dedicated managers or teams of people who continually track the work and sales of their channel partners.

Benefits of Good Partner Management

Managing your channel partners effectively means growing sales and profits for both your organization and your channel partner.

Specific benefits of strong partner management include the following:

  • Increased Revenue and Accelerated Growth: Channel sales can be highly efficient and profitable. Some organizations see 30 percent (or more) of their sales coming from the efforts of their channel partners.
    Shay Doran
    “Ultimately, much of the future growth of some companies will come through channel partners,” says Shay Doran, former Head of Partnership Strategy and Channel Management at Barclays and Founder of SJ Global, a partnership consultancy in London.
  • Increased Brand Awareness: Having more sales partners in the marketplace — many with their own large customer bases and market positions — can substantially increase the awareness of your brand.
  • Expanded Presence: Channel partners allow you to make your products available in markets where they otherwise wouldn’t be.

Challenges of Partner Management

Managing channel partners can also bring challenges. For example, because you and your partners represent separate entities, you have less control over their salespeople than you do your own. 

Other challenges include the following:

  • Partnerships That Appear to Be One Sided: If either a vendor or channel partner perceives the other side as getting most of the benefits without contributing to a partnership’s overall goals, then that partnership is bound to be counterproductive. 
  • Limited or No Buy-In from One Side or Both Sides: If the majority of people on one side or both sides of a partnership don’t support or psychologically invest in that partnership, it will inevitably fail.
  • Poor Training: If a vendor or channel partner doesn’t train a channel partner’s sales staff sufficiently, that sales team will not be able to sell the vendor’s product or services.

Channel Partner Management Strategies

An organization must establish a strategy for managing its channel partners. You should base your strategy on discovering the following: the best way to assess possible partners; the most efficient way to onboard them; and the most mutually beneficial way to work with them.

Your overall strategy should include a framework and specific processes to manage partners effectively.

What Is the Channel Partner Lifecycle Management Process?

Your organization should establish an overall framework and process to manage its channel partners. That framework and process should cover the entire lifecycle of a potential partner — from assessing whether a partnership should begin to evaluating its continual evolution.

Important steps in the process include the following:

  • Consider What You Want in a Partner: This means thinking about a range of variables inherent in prospective partnerships, both good and bad. Below are some things to think about:
    • What aspect of a partnership is most important to your organization? What values and attributes are most important to you?
      Dan Sincavage
    • Good partnerships are not only about sales volume — they are also about how the partnerships fit with your organization. Are a partner’s values similar to yours? Having a poorly matched partner will cost you in the long run, in wasted time, effort, and money. A bad partnership “can be a sort of productivity suck,” says Dan Sincavage, Founder and Chief Operating Officer of Tenfold, a company that provides an online integration platform for customer engagement technology. “It can be an area in which you invest a great deal, but don’t see results if you manage it ineffectively and choose the wrong relationships.”
    • Think about partners that optimize your value proposition. Identify your organization’s weak spots and choose partners with strengths in those areas.
    • What are your organization’s major growth drivers? Does the prospective partner align with those drivers?
    • Is the prospective partner ready, willing, and able? Does it have the resources to make it a viable partner? Is the prospective partnership as good for the partner as it is for your organization? If it is, then there’s a far greater chance that this partner will remain invested in it. 
    • Look for a prospective partner that is similar in important ways to your existing successful partners.
  • Be Selective: Set up formal criteria to assess prospective partners, and diligently follow it:
    • Do extensive market research on your potential partners and their capabilities.
    • Ask vital questions of your prospective partners, and demand real answers. Ask the following questions:
      • What is important to you in a partnership?
      • What are the major drivers that are growing your business?
      • What is your unique value proposition that will help my organization?
      • What is your organization struggling with?
      • Who are your best customers?
    • Remember that sometimes, less is more. You may only want one or two partners in a specific region or sales area.
      Marcus Cauchi
      “Having one or two good partners can be very effective and profitable,” says Marcus Cauchi, co-author of Making Channel Sales Work: Ten Tools to Create a World-Class Third-Party Selling Program. On the other hand, “If you’ve got 12 [partners] in a region, they’re going to be stepping on each other’s toes constantly.”
    • Set up a formal written framework of questions and assessments to analyze whether a potential partner is right for your organization — and adhere to that framework in your analysis.

      SJ Global’s Doran says many organizations are too lax in their analyses. A company may, for instance, enter into a partnership because one of its top leaders had a chat with someone at a cocktail party. “Too many partnerships fail because they originate from a friendly conversation or a CEO’s suggestion, rather than issuing from an actual strategic decision,” says Doran.

      Cauchi says that, during the evaluation period, your organization must practice “ruthless disqualification...You need to be clear about whether or not that [prospective] partner is the right partner.”
  • Have a Contract and Set Goals: Both sides should outline in writing the framework of the agreement. The contract should include the basics concerning incentives and compensation, the duties that each partner requires, and how either side can end the partnership. The contract (or accompanying materials) should also include other details or expectations that will become part of the partnership and its work, including the following:
    • Overall objectives for the partnership
    • Assessment and details of the target market
    • Strategies and tactics the partnership will use for success
    • Duties of each side in the partnership
    • Resources each side is committing to the partnership
    • Expectation of return on investment for each side.

      It’s crucial that both sides have a clear view of partnership expectations.

      “Another critical element of the process is being clear, at the outset, about how you both measure success,” says Tenfold’s Sincavage. “You tend to think about all of the amazing things that a partner can do for you. But, you generally don’t take time to analyze what’s actually meaningful from a potential partner’s point of view.”

      A contract must also allow for and be clear about how either side can leave the partnership, says Doran. “Make sure you have a solid agreement that allows you to exit, should something go horribly wrong.”

      However, a contract shouldn’t be too long and unwieldy, and you should be mindful of business norms in other parts of the world. In some places, Cauchi says, “A 50-page legal agreement is not going to work.” In these cases, “What you need is a brief letter of intent...  that says, ‘I’m going to take you on as my partner. I’m going to give you exclusive long as you meet the following conditions.’” Those particulars and a few other details can suffice. 
  • Get New Partners up to Speed Fast: It’s vital not to languish after you’ve finalized the partnership. Both sides need to move forward in order to drive sales and begin making profits. To accomplish that, make sure your organization does the following:
    • Create a streamlined process to onboard your new partner. During the first days and weeks, it’s crucial to demonstrate what the partnership can do. It’s also essential to deliver immediate revenues to your new partner in order to ensure its ongoing commitment.
    • Outline expectations and set up the basic framework that both sides will use to track the work and drive sales.
    • Respond quickly to your new partner’s questions and needs. Make sure your partner has easy access to the appropriate people in your organization (i.e., those staff members who can answer questions about sales, marketing, or other issues). If you’re available and responsive, your partner will quickly see a financial benefit to the partnership.

      “You need to put your partners first,” says Cauchi. “You need to put money in their hands.”
  • Offer Clear Incentive Programs: Providing incentive programs for your partner will drive sales growth and make the partnership a success. The incentives need to be simple and clear, with objective guidelines. 
  • Provide Immediate and Effective Sales Support. It is vital that your organization provides your new partner with the tools it needs to make sales. Those tools should include training your partner’s sales staff in the same way you train your own salespeople. Doing this will help your partners increase sales and be more productive. You should also provide your partner with all sales, marketing, and other important materials and information. Overall, that sales support should include the following materials:
    • All relevant brand-related literature concerning sales, marketing, and training
    • Access to all online resources that your organization uses for sales and marketing
    • Price lists and information on special offers
    • When necessary, automated tools to calculate pricing
    • Relevant information about the industries in which your prospective customers operate
    • Information and advice about prospective customers (that is, data that will help your partner tailor sales pitches)
    • Possible roadblocks for your partner, as well as recommendations for surmounting those roadblocks
    • Continuous collaboration with your partner to keep your customers happy
    • Collaboration with your partner on marketing endeavors, including digital marketing strategies and technologies.

      Sincavage says a vendor-partner relationship must provide customers and prospective customers with a consistent message and consistent expertise about the product. That means partners must be able to provide customers with information as quickly and as well as a vendor’s own sales team would. “Customers are going to make up their minds pretty quickly,” Sincavage notes.
  • Communicate Effectively and Continually: Your partnership will fail if you don’t continually communicate with your partner and make sure that they can easily communicate with you. In your operational framework, you should do the following:
    • Hold regular meetings, whether in person, on the phone, or via videoconference (some meetings, in particular, should be in person). Discuss sales progress, new operations, and problems. Solicit feedback from your partners and be open to what Cauchi calls “constructive conflict.”

      When, for instance, a partner is resisting your team’s sales approach, you should encourage frank discussion and figure out how to resolve the disconnect, Cauchi says. Don’t avoid the issue — if you do, you risk having a partner that uses the sales approach unenthusiastically or circumvents it altogether.
    • Solicit partner feedback in other ways, including through digital channels, surveys, and other means.
    • Cultivate a culture of immediate and effective response. Your organization needs to respond quickly and effectively to your partner’s questions and issues. Doing this helps assure your partner that the partnership will be worthwhile. “People expect to get support and a response,” says Sincavage. “The tone you set early on in your relationship affects your partner’s willingness and desire to scale it.” All of this work ultimately helps your customers.
  • Measure KPIs: At your regular meetings and through other means, track key performance indicators of the partnership, including sales figures. But, sales figures aren’t the only metric of success worth looking at — in fact, in some cases, it might not even be the best metric of success. Other metrics, especially early on in the partnership, might include the following:
    • How well the partners are sharing information
    • The development of new sales ideas and tactics

      Doran says organizations should avoid what Lean Startup expert Eric Ries calls “vanity metrics.” Vanity metrics are metrics that sound impressive — 100,000 visits to your website, for instance — but don’t really tell you if they’ve translated into something valuable, like increased sales.

      The metrics you should be tracking, Doran says, “are the kind of facts and figures that show whether the partnership is ultimately working. You want to know what the key drivers are that show whether the partnership is working. Having this data every time you go into meetings with stakeholders is critical.”
  • Analyze Your Partner’s Performance Through Overall Assessments and Objective Measures: Doing this includes not only assessing sales figures, but also evaluating sales activities and identifying any performance issues.
  • Evolve Your Program with Each New Partner: Different partners might respond differently to certain incentives. You can adjust incentives based on a partner’s normal practices or needs. These customized changes can lead to more sales and more success.

What Is a Partner Management Framework?

Some organizations consider a partner management framework to be the overall process of recruiting, analyzing, and managing partners. A partner management framework can also be an operational framework that organizations set up to manage their partners and collaborative work. 

As part of that operational framework, organizations may employ one or more channel managers.

What Is a Channel Manager and How Can They Improve Partner Management?

A channel manager works directly with an organization’s partners to help develop sales strategies, respond to partner questions and issues, and work collaboratively with partners to increase sales and profits. 

An effective channel manager is responsible for the following:

  • Building strong relationships with partners by being proactive and responsive to their questions and issues
  • Helping integrate their partners’ representatives into the organization
  • Working to understand their partners’ organization and industry
  • Being an advocate to fix organizational issues that may hamper partners
  • Being a good salesperson and a great coach

Top Mistakes in Channel Partner Management

Organizations make common mistakes in handling and managing their channel partners. One common mistake is failing to thoroughly research a partner and its capabilities before entering into an agreement.

Other mistakes include the following:

  • Agreeing to a Partnership for the Wrong Reasons: Companies can enter into partnerships for many of the wrong reasons. But, failing to screen a partner sufficiently is one of the most common mistakes leading to a partnership. Proper due diligence is crucial to making a partnership work.
  • Treating a Partnership as a One-Way Relationship: When an organization thinks only about how a partner can help them and not about how the organization itself can and should help the partner, the partnership is likely to fail. So, it is imperative that you focus on financial incentives for partners and make it as easy as possible for them to do their work on behalf of your organization.

    “There has to be something for both parties to gain,” says SJ Global’s Doran. “If people do business with channel partners only on their own terms, they will push those partners away.” In fact, those partners may “just go to work with one of your competitors.”

    Organizations “forget that partners have a choice,” says Cauchi. “This is a huge mistake. If you’re going to be a good partner, you need to lay the groundwork to help your channel partners. They’re in business to serve their own needs, not yours. If you help them get their needs met, you’ll get your needs met in return.”
  • Allowing a Partnership to Continue When It’s Not Worthwhile: This problem can result from a variety of factors: inertia, a failure to track results, or a contract without an exit strategy.

Tips for Working with Channel Partners

Below, experts offer best practices for working and selling effectively with channel partners. Those best practices include extensive collaboration with your partners, as well as the following:

  • Have a Good, Clear Contract: The contract should spell out the details of the partnership and the procedure for exiting the partnership, should either party decide it’s not working for them.
  • Co-Sell: Have your sales reps work directly with your partner’s sales reps, and always be available to answer questions. Depending on the specific circumstance, this may also mean going on sales calls together.
  • Promote Together: For instance, attend trade shows that your partner regularly attends. Doing this will allow your partner to see the nuances of your organization’s sales strategy.
  • Participate on Social Media Platforms Together: Your company can learn a lot about the market, and the response to your product, from social media. Private social media communities that focus on your (or your partner’s) products or industry can be especially helpful.
  • Create a Channel Management Community Outside of Social Media: You can do this via email newsletters or other digital means. You can also hold in-person events and meetings where your organization comes together with partners, distributors, and others to allow everyone to share industry best practices and sales strategies.
  • Co-Invest with Your Channel Partner: For example, your company may pay a percentage of the compensation for your channel partner’s new sales reps. That way, you can earmark that portion of the compensation. Your investment may, for instance, call for a higher sales commission for new customers (rather than current customers). In return, you may require the relevant sales reps to participate in your organization’s sales training or other company exercise that will improve their ability to sell your products.
  • Enjoy Yourselves: Invite your partners to marketing events, dinners, and sporting events. “The most important thing is to have fun,” says Doran. “Make sure they feel included.”

Tips for Managing Your Organization’s Other Partners and Alliances

Of course, you may have partners and alliances beyond channel partners. If that’s the case, it’s essential to manage those partnerships in a way that benefits both sides.

Here are some expert tips on managing non-channel partnerships:

  • Be Even More Careful and Strategic about Entering Only the Right Partnerships: As important as it is to be careful when entering into channel partnerships, Tenfold’s Sincavage suggests that regarding larger partnerships, caution and due diligence are even more crucial. “As soon as you even start considering strategic-level partners...that’s when you have to be ultra-selective about the people with whom you work.” Additionally, Sincavage emphasizes, “Your organization must also be clear about any specific partnership’s goals as well as the investment such a relationship will require to reach those goals.”
  • After Setting up a Contract and Designating Parameters, Focus on How You’ll Really Work Together: Focus not only on the requirements that both sides agree to, but also on the nature of your everyday interaction. Some forward-thinking companies follow a minimum four-week process in which employees of both organizations do the following: examine and evaluate the cultural, operational, fiscal, legal, and other differences between the two organizations; explore the potential challenges of working together; and determine the protocols for managing those differences and potential conflicts.
  • Develop and Track Metrics Based Not Only on Partnership Goals, but Also on Partnership Progress: Few partnerships start with immediate progress toward a significant increase in sales. Building such a relationship dynamic takes time, and it’s important that neither party becomes discouraged when it doesn't see immediate success concerning those sales-related metrics.

    However, there are other metrics that you can measure early on to hint at later potential success. These metrics might include how the two sides are sharing information; how they are working together to fix problems; and how they are jointly exploring new ways of working and selling. Make sure to track those metrics as well.
  • Celebrate Your Differences, Rather Than Trying to Eliminate Them: Often, two organizations decide to partner because they believe their different strengths will complement each other. It’s crucial to keep this idea in mind as you begin working together — too often, in an effort to minimize conflict and iron out differences in order to reach a common agreement about how to pursue partnership goals, resentments arise that sabotage the effectiveness of the partnership. Instead, partners should work to understand their differences — doing so will enable you to choose strategies that complement each side’s strengths to help accomplish partnership goals.
  • Encourage Collaborative Behavior — Beyond What the Original Contract Says: A partnership’s contract and written framework will likely address how the two sides will collaborate and communicate. But, leaders of each organization (and the employees working closely on that partnership) can also establish a list of basic protocols on how the two sides should work together. Those protocols can include things like how to handle complaints from employees of either organization and how to make sure each side shares information with each other.
  • Manage Your Organization’s Internal Stakeholders as Closely as You Manage Your Work with Your Partner: Frequently, people at your own organization who aren’t involved in the partnership can undermine the partnership. Before such a problem becomes irreversible, use it as an opportunity to locate and understand that resistance within your own organization. That way, leaders from both companies can work to address any issues, so the partnership has the best chance of succeeding.

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