And the reason is simple: 64 percent of the tech industry’s $3.5 trillion in annual revenues currently flows through channel partners (Forrester Research, 2021).
With competition being so fierce and getting fiercer every day, those operating in the channel must find ways to stand out. The following are a few of the best practices that have helped Leidos, a Fortune 500® technology, engineering, and science solutions and services leader, lead in its field and establish a brand that’s both global and localized in nature.
Understand Who You Engage
Ethics, transparency, and doing what’s right for the customer are some of the core values of modern business. They must extend beyond the confines of the organization to every corner of the partner network. This is especially true in a global operation.
In many countries, political or contractual preferences demand the involvement of local companies. Therefore, it’s incumbent on you to gain a complete understanding of anyone you choose to engage with. As your representatives in that region or country, you must ensure they live up to stakeholders’ expectations. Exhaustive due diligence and thorough background checks keep your organization clean in what can sometimes be a murky marketplace. Over time, this becomes a significant point of differentiation.
Embrace the Localization Trend
Localization is a growing force across the planet. More and more government-sponsored projects, for example, demand localized contracts—and with good reason. There have been cases where multinationals have overpromised and underdelivered. In such cases, governments have found holding them accountable for their errors challenging. They often prefer the work to be channeled through a local entity that can be held responsible for project execution and overall satisfaction.
But localization takes adjustment and planning. If you execute internationally, realize that not everyone speaks English. Contracts and documentation, therefore, must be accurately translated into local languages. In many cases, you must rely on partners to assist in translations. Legal teams on both sides must take the time to ensure that contractual and linguistic nuances are identified and resolved. Training of partners and users must be available in any necessary languages.
Beyond language, additional work must be done to integrate partners into your processes and deliverables. This ties back to due diligence. Some prospective partners are more capable than others of aiding with these various localization duties. Obviously, both sides must contribute. But if everything falls on your shoulders, you may have selected a partner ill-equipped to deal with international business requirements.
The human resources (HR) department should actively participate in localization initiatives to avoid hiring based on their organization’s country of origin. Companies that lack cultural depth will struggle with international and partner relations. The corporate hierarchy and middle management must include people from diverse backgrounds, ethnicities, and nations. The workforce must reflect a global perspective, including representatives from the local markets where you operate.
If a partner relationship is a one-way street, it can become a dead end. Trust and transparency must flow both ways. It’s up to you to be fully transparent in your operations once a relationship is established. This includes pricing, overall goals, the progress of ongoing projects, your mission, and where you want to be in the future. At partner meetings, this level of transparency makes partners feel included and valued. By setting a clear pathway forward, they can formulate their plans and strategies with confidence that you’ll be there for them.
All Partners Deserve Support
No two markets are the same. Demographics, income levels, and levels of industrialization vary widely. Therefore, treat all partners with respect, and appreciate the conditions in which they operate.
It’s a common error to pay attention only to the big sellers operating in the most robust market. Yes, their impressive sales volumes do merit more attention, but smaller partners in more challenging markets need to feel appreciated. If all they hear about is how partners X, Y, and Z bring in $10 million a month and unrealistic demands for them to do the same, they might start looking elsewhere. You might lose them to a more attentive competitor.
Spend some time with your smaller partners. Make an effort to understand the local realities in which they operate and find ways to give them the support they need to do better. This should extend to a personal interest in the individual. Ideally, visit them in their area. But at the very least, meet with them one-on-one during a partner gathering. Ask many questions about their business, region, culture, family, and interests. Answer their inquiries, and resolve their complaints and challenges. Let them know they’re more than just a number on a monthly sales chart.
Balancing Trust and Governance
One of the most significant difficulties for organizations with overseas channels is balancing contractual governance with common-sense trust. Too much emphasis on the former can erode trust while relying primarily on a handshake without contractual accountability is a failure in fiduciary responsibility. Balance is the key. You have a duty to safeguard all stakeholders via the proper legal structure. Yet this structure should be used as a vehicle to develop mutual and long-term trust.
Build a Track Record of Success
Adherence to these points will serve you well in establishing a viable and enduring international partnership presence. In the end, the effectiveness of your localization strategy will be evidenced by the volume and quality of references you can provide that showcase your local and international capabilities. They set you apart from the competition as a partner that understands the channel, is experienced in dealing with the fine points of localized channel relationships, and can be trusted when it comes to execution, delivery, and value.
Eduardo Parodi has extensive experience working with domestic, international partners, and end users in developing new opportunities and establishing long-term relationships that contribute to profitable growth. He has over 25 years of software and hardware solution sales, channel partner management, strategic business development, and government affairs experience in domestic and international markets with small, medium, and large cross-functional enterprises. Parodi is the director of business development and sales at Leidos, a global science and technology solutions leader working to address some of the world’s toughest challenges in the defense, intelligence, civil, and healthcare markets.