Avoiding Risks in Channel Partner Relationships

May 18, 2011

Avoiding Risks in Channel Partner Relationships

Even though the use of channel partners is increasing, some software companies are not fully reaping the benefits. Using the processes described in this article not only will arm you with decision factors and the necessary knowledge for eliminating the risks but also will help you create and sustain profitable relationships with channel partners.

By Stephen Dent, Partnership Continuum, Inc.

Many software companies are finding that their channel partners influence a significant percentage of their business growth. The need to deploy this growth strategy is becoming increasingly important with the uptick in switching to the SaaS and cloud models enabling software firms to enter new markets (industries and geographies). However, even though the use of channel partners is increasing, some software companies are not fully reaping the benefits, as in the following examples: (1) They use channel partners only on an opportunistic, ad hoc, deal-by-deal basis, not leveraging the full potential of this highly effective growth strategy; (2) They experience gaps in their anticipated return on investment (ROI) in channel partners.

Improving your company’s capabilities in channel partner management depends on three steps to mitigate risks: 1) avoiding the pitfalls in channel partner relationships, 2) knowing how to turn transactional channel partners into strategic partners and 3) managing the relationships so they yield more value.

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