Business success is a simple concept yet it’s dependent on so many things coming together. When you are working to grow a business internationally, the number of variables and new unknowns increase. Our plans and steps to success from one market to the next are not consistent. Each country and each industry sector have differences and it often takes experienced business development people to recognise these differences and adjust.
Do Note: A Business Development person is not the same as a Sales person. Business Development people can shape the path for the Sales people to follow.
When selling through Sales Channels you add another layer of variables to learning how to grow in international markets, and each product has its own nuances. When many things are not certain, we seek the fastest, most likely path to learn what works and then lift the pace. As I regularly say, smart people in a room can make their judgements based on their extensive experience but it’s only when you engage the market do you really know what will work.
The following are necessary and difficult questions to answer in planning to grow through sales channels.
I will provide some guidance around the answers, but each of these questions warrants some deep thought and discussion in any business that is considering or actively seeking sales channel partners.
1) When will I get my first revenue? When will my partner program start paying for itself?
The simple answer might be; the time it takes to recruit and activate your first partner (typically 3 to 5 months) and then the length of the sales cycle to sell your product.
The pace of the Partner Recruitment is affected by the number of suitable potential partners and the strength of your Partner Proposition, which includes the strength of your Customer Proposition and how well you beat the competition.
The length of your sales cycle can potentially be shortened by the partner relationships with their existing customers or their credibility in the market.
2) How many partners should I recruit in each market?
In the long-term you want to achieve market coverage, and if one or a small number of partners can give you this, then that suffices. Yet it does depend on how you break up the market; geographically, size of companies, sectors, application areas etc. In the early stages you may want to recruit partners and give them space to be successful in the market, without adding competing partners.
Other factors to consider around this question:
• The risks of too few partners in a market
• Awarding exclusivity without very defined targets
• One plan for primary markets and another for secondary markets
• How many partners can you on-board and properly support within the coming 12 months
3) How many markets should we focus on? Can we start with one?
Does your first priority market offer enough potential partners to get fast traction in the market or, are you happy to wait for the timing to be right with the limits your first market offers? If not you may choose to tackle three markets offering a larger number of potential partners, providing a better chance of finding partners sooner without necessarily increasing your costs.
Is your product ready to be used or implemented in multiple regional markets? Can you credibly support your product in these markets? Can you support partners in these markets?
My preference would be to broaden the base to facilitate greater numbers of prospective partners as you learn faster what works and gets faster traction.
4) Can we start slowly with one partner?
Yes, with the acceptance that engaging with less potential partners leaves you with less routes to learn what really works and leaves you with a point of failure in the plan. A big challenge when engaging with only a small number of potential partners, is that you exert great effort to make it work and can easily fall into the trap of spending too much time with the wrong partners.
It needs to be defined what starting slowly actually means. Often times, the investment to secure one partner can carry a large portion of the investment to secure five partners. A bit like grocery shopping do you go to shop every day for one day’s meals or do you shop weekly for seven days’ meals? Which is of greater value in the long-run?
If you have interest or contacts with a potential partner, this could be an option with the proviso that you evaluate appropriately and don’t try to force a partner fit.
5) Why do we need to contact other companies in the market, when we know who we want to partner with?
It’s great if you do know the companies, as long as you know they are the right type of partners for your business. Many business leaders seek to leverage existing relationships into a partnership but unless there is a clear partner fit between the companies, it will lead to much frustration and failed expectations.
This problem is compounded when the potential partner is a large company, and years can go by trying to make it work. My preference is not to leverage existing relationships but to find potential partner companies with a good partner fit and build the relevant relationships. If you have some existing relationships, then fantastic, lets engage with them first, but Partner Fit is the priority.
There are many potential pitfalls in growing successful partner channels, but answering these questions should help you to clarify your strategy.
I’m a fan of keeping business simple, success is hard enough and there are always changes and surprises. There are so many factors in every business affecting their priorities. So, when you call a business leader seeking to partner with their company, do remember they are already extremely busy with their own plans and if your partner proposition can help them, you stand a much better chance.