In order to both share my perspective and (perhaps more importantly) to elicit constructive feedback and new ways of thinking, I am writing a series of posts giving my perspective on the best practices of Channel Management. These are things that I have learned and have implemented with success in my career. Comments, feedback, disagreements, and additional insights are welcome, if not encouraged.
This is the third in a series.
Partner Business Planning, Part 1
Effective channel management hinges on effective collaboration between your company and your partners. Partner business planning is the basis for mutual success. This process is vital for aligning the business goals of both parties. It clarifies the strategic rationale behind the partnership and facilitates informed decisions about resource allocation. By engaging in joint planning, you can identify potential gaps in market coverage or partner capabilities. Both your company and your partner benefit from planning across sales, marketing, finance, operations, and technical departments. This collaborative foresight ensures that plans are grounded in realistic expectations. Key concepts in this planning include things like:
- Joint Marketing Plan (JMP): a blueprint for shared marketing efforts
- Go-to-Market (GTM) Strategy: an action plan for reaching customers and achieving competitive advantage
- S.M.A.R.T (Specific, Measurable, Achievable, Realistic, Time-Based) Goals.
- partner-specific data
- Joint Marketing Plan (JMP)
- Joint Sales Plan
- Review and Renew Plan.
The overarching goals are to bring about a mutual understanding of each party's vision, mission, and strategy and to align them where possible, minimizing conflicts. This involves setting joint business objectives and Key Performance Indicators (KPIs), devising strategies and action plans to meet these objectives, allocating budgets, and establishing a review schedule (e.g., monthly or quarterly) to ensure the plan remains a dynamic, "living" document.
Essential elements within the plan include a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for both your partner and your company to identify overlaps, synergies, and gaps. The plan should detail partner core competencies and differentiators, articulate a joint value proposition, define target audiences, and establish performance milestones. It should do this with specific, measurable outcomes and criteria. Future investments should be made contingent on achieving these milestones.
A deep understanding of each partner is extremely important before you begin joint planning. A generic "boilerplate" approach can undermine the relationship from the outset. This involves gathering background data on
- the partner's firmographics (e.g., years in business, core competencies, number of employees)
- their financials (e.g., annual revenue, average deal size, sales incentives)
- the existing relationship (e.g., key contacts, competition, potential conflicts).
- economic alignment, such as how the partner derives margin from the your product versus their own services and the percentage of their total margin from the vendor's product
- sales focus alignment, determining whether the emphasis is on net new customers, upgrades, cross-selling, or account maintenance
- sales cycle alignment, ensuring that sales processes are harmonized, especially for products with long sales cycles.
Planning often varies by partner tier, with different levels of commitment (e.g., revenue targets) and support (e.g., frequency of joint marketing plans, dedicated vendor resources, annual vs. semi-annual business plans) for Bronze, Silver, or Gold partners.