Purpose
For those Allbound customers who are new to the Indirect Channel or would like to simplify their understanding of Channel Partnerships, this article outlines the different channel partner types.
Introduction
Once the groundwork is laid for your partner program, what’s the next step? Whether your program is taking off or you’re struggling to hit certain goals, evaluating the types of partners you’re working with is key to growing and scaling.
Taking a step back to evaluate gaps in your sales ecosystem can exponentially increase the results from your channel program, though. And this is where the value of adding new types of partners comes in.
A value-added reseller will help you attract new kinds of customers compared to an indirect reseller, for instance. A managed service provider will offer a more robust experience for your customers than a referral partner.
So, how do you figure out who else you need in your partnership community and how do you bring them into the fold?
What Are the Different Types of Channel Partners?
There are numerous possibilities of partner type combinations and nuances that can elevate your channel sales program. These are the five most common types of channel sales program partners.
Referral partnerships
Referral partners are third parties who promote your product or service directly to their own networks, tapping into the trust and credibility they’ve established with those relationships. This means the leads they send you tend to be highly qualified.
This type of partner typically receives a commission or fee for sales associated with their efforts.
Affiliate partnerships can fall under this category – if they’re posting a link to your product on social media, for example – but affiliates tend to be more hands-off.
Reseller partnerships
A reseller partner sells your product or service to their customer base, helping you reach a much larger audience than you otherwise would have thanks to their connections. Unlike a referral partner that brings you leads, a reseller will typically be involved across all stages of the customer journey.
They usually make money from the profit margins, although they may receive a percentage commission of the sale.
Value-added reseller partnerships
Channel value-added resellers (VAR) partners are quickly becoming the most popular type for many businesses. Like a reseller, they extend your customer base by taking your product or service to new markets and adding a profit margin to it.
However, the difference is that they also provide additional value to the end-user which can be anything from services to customizations. This makes your product more competitive and tailored to that specific audience base. VAR partners are particularly helpful for increasing sales volume over a short period of time and getting products to market quickly.
Alliance partnerships
Alliance partnerships are formed by organizations in a similar business – like software, cloud services or other tech – that integrate two products into a single solution for the customer.
It can require more investment upfront to create a joint venture with an alliance partnership but the payoff can be significant, both in terms of the product offered and any co-marketing opportunities.
Alliance partners often receive a percentage of the sales revenue. In an ideal alliance, both sides benefit equally from sharing access to customers. It doesn’t have to be a 50/50 revenue split though if one partner is benefiting more in other ways. Take it on a case-by-case basis.
Managed service provider partnerships
Managed service provider (MSP) partners deliver ongoing services, like IT infrastructure, to your customers after the sale. This can make your software more attractive to a consumer because it removes potential barriers to implementation and upkeep, improving the overall customer experience.
Partners like this can receive a percentage of the sale, but also benefit from the ongoing revenue generated from value-added services.