article | July 28, 2011
Channel Management Strategy – Governance Defined
The five elements are listed below:
In our sales consulting projects, we are consistently surprised to find that a sales process exists for the direct sales force but the concept of a process is foreign to the channels team. A multi-million dollar channels organization without a governance process can expect greater variability in results.
Steve Steinhilber, Cisco VP Strategic Alliances, once said start with a strategy not a partner. His alliance management framework is a perfect example of a governance process. The framework identifies six stages that span from evaluation to retirement. For more detail on retiring a partnership you can read this prior post: Channel Management Strategy.
When you apply a process to your channel management efforts you are more purposeful and tend not to be distracted by one-off relationships and high maintenance partners. One aspect of Steve’s framework that illustrates this point is the examination of the joint value proposition. It calls for a critical look at the supposed value the two organizations plan to bring their customers. When we have applied this in our client’s channel organizations, it has resulted in a higher rejection rate of partners earlier in the process. This keeps the channels team from bloating to serve a large number of ineffective partnerships
Ultimately, governance serves both the demand for greater results and lower costs. At one SaaS provider, this simple value prop evaluation yielded a completely different form of partnership that helped the vendor propel themselves into the leadership position in their space.
Consider the alliance framework above and ask yourself if your channel management strategy includes this level of rigor.