For organizations looking to expand their global footprint, increase sales, and scale their business, channel partners represent an effective way to achieve business objectives. But channel partnerships are complex and multi-faceted undertakings–and understanding the different types of channel partners can be challenging. This article will explore three of the most common types of channel partners and what they do.
What Is a Channel Partner?
Before we get into specifics on channel partner types and what the means, let us cover a very basic definition of channel partnership. Channel partners come in many types and sizes, and there are often many overlapping aspects between different partners. Ultimately, you must make the call on what works for your organization and what types of partners resonate well with your growth goals and customer base. At their root, however, channel partners always have one thing in common–they act as a middleman between your organization and your customers to help alleviate pressure/workload for your team. Their role can be in sales, implementation, or customer management and support. They help accelerate your ability to scale and grow, whether you are looking to increase revenue or gain market share, and they decrease the expense and time costs of growing and scaling internal teams.
Value Added Resellers
One of the most common–and beneficial–types of channel partners are Channel Value Added Resellers (or Channel VARs). VARs take your product and resell it to customers for you. This sales-driven channel, however, often will undertake additional responsibilities besides simply facilitating the transaction. This can include pre-sales support–helping customers understand their needs both now and in the future to choose a solution that will set them up for sustained success. It can also include implementation services to speed the set-up process. Often it also includes continued support services that will help customers should they run into a problem with the product down the line or if they need to change the way the product is set up.
For many OEMs, Channel VARs are an incredibly valuable addition to their sales pipeline because they can increase their sales presence without needing to add and train additional staff. Also, by working with strategic partners in specific verticals or regions, OEMs can achieve targeted growth and tap into new markets.
Service Delivery Partners
Service delivery partners differ from VARs in that they do not resell the product. Rather, they cover more of the support and service items that the OEM may not necessarily have the resources for. OEMs work with service delivery partners to help improve customer experiences, build more robust support services, and accelerate product absorption. Service delivery partners bridge the gap between the technology itself and the expertise, implementation, and support it takes to run it.
Affiliate partners are a relatively new player in the channel-marketing landscape. Affiliates at their core use their influence and expertise to send customers your way. These relationships are often mutually beneficial–perhaps the affiliate is an SaaS that operates in a similar space to your organization, but your product covers a gap in their offering. They understand that by sending their customers to you, it helps them keep that user in the fold and provide better outcomes. In return, they would collect a referral fee while your organization obtains a new customer. You often see affiliates who are thought leaders or “influencers” in a particular field.
Putting It All Together
Channel partnerships represent an incredible opportunity for business of all sizes and verticals because it opens new doors to growth and market share that may be unrealistic to capture without help. By working with the right partners, OEMs and SaaS organizations can strategically scale their businesses in areas of need and expand without significant investment. Channel sales can offer huge gains to company revenue streams, and organizations like Microsoft, Oracle, and many more use channels to drive a significant portion of their sales.