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Your Guide to Successful Channel Development for Improved Profits 

There’s no one-size-fits-all approach when introducing your product or service to the world. Businesses often struggle to find the most effective way to reach their target audience. This is where a well-thought-out channel development strategy comes into play. In this guide, we’ll explain how you can build a strategy that can improve your profits and your market share. 

Step 1: Understand Your Customers and Market  

A winning channel development strategy starts by knowing your customers and market. Your business can do so by:   

  • Identifying Their Urgent Needs: Find out what challenges your ideal customers are facing and what solutions they urgently need. Knowing this helps you address their immediate pain points and position your product or service as a must-have.  
  • Assess Their Budget Constraints: Find out the budget range your ideal customers are comfortable with and how they allocate their finances. This ensures you offer value without straining their wallets.  
  • Evaluate Their Growth Potential: Understand your ideal customers’ expansion plans and how they envision their business evolving. This will help you align your offerings with their long-term goals, making you a strategic partner in their success.  

We’d also recommend engaging directly with customers, conducting market research, and analyzing your competition to get a good “temperature reading” of your market.  

Step 2: Evaluate a Partner’s Revenue Potential  

To pick the best partners for your product or service, you need to consider how much money they can bring in (i.e., their potential). Here’s a simple way to do it:  

  1. Look at the Size of Their Customer Base: Imagine Partner A has 10,000 potential customers, and Partner B has 5,000. Partner A is twice as big as Partner B, meaning it has more potential customers. Partner A might be your best bet if you want a bigger audience. But don’t cut out smaller partners just yet. You’ll find out why in a bit.  
  1. Examine their Potential Customer Reach: Consider where your potential customers are located and which partners in the area are best suited to reach out to them. Partner A covers multiple states, while Partner B is more locally focused. If your customers are primarily in-state, Partner B might be more helpful to you.  
  1. Calculate their Earning Potential: Calculate the potential earnings for each channel by multiplying the average spending per customer by the number of potential customers reached. Let’s say customers spend an average of $100 with Partner A and $150 with Partner B.   
  1. Partner A: 10,000 customers * $100 = $1,000,000  
  1. Partner B: 5,000 customers * $150 = $750,000  

This is why you shouldn’t discount all smaller verticals or partners. Even if Partner A has more customers, Partner B might make you more money per sale. As our Guru Ken Adams says, “Don’t waste your time chasing a “white whale” partner when there are plenty of other partners in the sea.”  

These three simple steps can help you decide where to put your resources to get the most bang for your buck. Remember, it’s not just about reaching lots of people – it’s about reaching the right people in the right places.  

Step 3: Choose the Right Channel Partners  

Success in channel development hinges on finding great channel partners, but how do you find them and start building a dream team? Answer these quick and easy questions:   

  • Are they already active in the vertical you have determined to move forward in? 
  • Are they experts on other products that are used within that vertical?  
  • Will they add value during the sales process or are they just a referral source? 
  • Is their track record squeaky clean, and do they have extensive experience in your industry?   
  • Do they understand your target market and share similar values?   
  • Will they complement your strengths and/or solve some of your weaknesses?  
  • Do they have a clear, responsive communication style?  
  • Can they keep up with your business growth?  

If you answered “yes” to any of these questions, you’ve found a company that can help you build a solid foundation for your channel program.   

Step 4: Set Quantifiable Goals and Metrics  

A goal without a plan is just a wish. So, once you have established your verticals, it’s time to set your goals and plan. Work with your channel partners to develop SMART goals for sales and revenue growth per channel. These can include:  

  • Social media impressions   
  • Leads generated  
  • Customer satisfaction levels  
  • Market share  
  • And more  

Having specific goals to attain or quotes set that both parties can track and measure keeps your strategy on track and allows for effective performance evaluation.  

Step 5: Collaborative Planning with Partners  

To build an ecosystem that fosters channel success, you need to collaborate with your channel partners. Here are a few things to discuss and consider when planning a channel program:  

  • Resource Allocation: Determine who’s bringing what to the table—money, people, and marketing efforts. Keep things fair and balanced.  
  • Communication Protocols: Set up straightforward and easy ways to talk between your team and your partners. Regular updates and open conversations help solve problems quickly and allow you to celebrate your successes in real time!  
  • Training and Support: Provide partners with the information they need to become experts in your products and services. After all, partners are like an extension of your sales department! So be sure to teach them what they need to know and give ongoing support. The better they understand your brand, the better they can sell it.   
  • Incentive Structures: Come up with fair and motivating rewards for your partners. It could be bonuses or commissions tied to their performance. This keeps everyone focused on hitting goals.  

By working closely on these points, you’ll build a partnership where everyone’s invested in the channel’s success. It leads to better profits and long-term success for everyone involved.  

Infographic about Channel Development success in Businesses

Gain Access to Expert Channel Development Strategists with P2P  

Consider utilizing the experts at P2P to help develop a winning channel strategy that will make this journey even smoother! With over 100 years of combined telecom experience, we bring a wealth of knowledge to the bat for you so you can successfully navigate the intricacies of channel development and improve your profit margins. So don’t wait – make our experts yours today! 

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