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Five Tips for Small B2B Companies That Depend on Big Channel Partners

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It's a challenge faced by hundreds of small companies: how to get the CXO of a Fortune 1000 company to consider its product.

One effective strategy that helped get companies such as Citrix and VMware off the ground is to align closely with a major partner.

Building a strong channel, even with just one or two partners, can be much more effective and easier to leverage than trying to develop your own sales team and customer relationships.

The following five tips can help B2B companies maintain strong channel partnerships.

1. Get close to the partner—really close


If your business depends on a single partner, physical proximity is key. Dozens of companies have grown up in the wake of Intel, Symantec, and Microsoft—and now similar things are happening with Internet 2.0, as companies such as Facebook, Google, and YouTube are creating their own ecosystems.

It may seem like a lot to pick up and move to be close to your partners, but it's ultimately a small price to pay in exchange for the opportunity to build strong personal relationships, conduct last-minute joint sales calls, and collaborate on product development and marketing strategy.

2. Clearly articulate the differentiated value that you provide to customers

Be aware of what the competition is doing and why your offering is different and better. Make it easy for your channel partner to pitch your product.

Even if your partner is going to do the bulk of the selling of your product, it's up to you to develop a compelling value proposition, determine market positioning, develop sales collateral, and provide general training, and you must be available to support the channel in its ongoing sales activities.

Officially, your partner may say that it creates its own materials, but in reality your partner will not be able to position your product as well as you do. And if your partner is unsuccessful selling your product because its materials aren't strong, ultimately, it's you who will suffer.

3. Remember that the channel is also your customer

You need to think like your partner and try to determine what the value proposition is for your partner, not just for the customer.

Start by understanding your partner's business model so you can determine how best to deliver value to your partner. Why does the sales team want to sell your product? What's the compensation plan for sales-team members? How do your product and services help the sales team sell other products more effectively?

Remember, you need to make the first sale to the channel—and then subsequent sales to the end user.

4. Build a deep partnership

The best partnerships go beyond just Sales and Marketing. Agree to joint accountabilities, expectations, and goals at the outset.

Try to forge relationships across every discipline, especially Product Development. You want your developers to benefit from the market insights of the partner's frontline sales and account management teams. You also want to make sure that the products you develop fit into the overall solutions your partner is offering.

And, of course, the more ties you have to your partner, the stronger your partnership. Even if your company is small, make sure there's one point of contact for the relationship and dedicate a good percentage of that person's time to the partnership's success. Take the time to establish success metrics for that person and the partnership.

5. Always have other options

It may seem counterintuitive, but even as you build a strong and intimate relationship with a key partner, and devote a significant portion of your resources to courting and serving that partner, you need to think more broadly.

More than one small company has been put out of business by a big partner that decides that SmallCo's business isn't worth having. In your business's early days, you may need to take a risk and put all your eggs in one basket, but as soon as you can, develop other channels and products.

* * *

The current economy is dismal, and budgets are tight. Leveraging a strong channel partner can be a great way to build a solid customer base that is profitable for both parties.

While it can be risky to get too close to the two-ton gorilla, the risk is one that often pays off.


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Robbie Kellman Baxter is president of consulting firm Peninsula Strategies (www.peninsulastrategies.com).

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