5 Steps to Identifying the Channel Partners That Will Grow Your Business

Creating a winning channel strategy starts by understanding how the odds are stacked against you. It’s no surprise they call the golden rule of channel sales the 90/10 rule where 90% of the sales are going to come from 10% of your partners — and it can be virtually impossible to determine which will be the winners and which won’t be worthy of your time.

The best approach to this problem that I’ve found is to come up with a few frameworks you can use to focus in on those that are most likely to end up in the winner bucket. These frameworks typically dawn on you only after you’ve gone through the painstaking process of figuring it out the hard way (without a framework) so I thought over my next couple of posts that I would share some of our key learnings from building out channel strategies in the small business space.

In this post, I’m going to share what I call the Life-Cycle Framework.

Step One: Identify the Key Milestones (“Life-Stages”) in the Life-Cycle of Your Target Customer. 
For small businesses it typically all starts with someone coming up with an idea for a business and then moves through periods of time when the business owner incorporates, establishes a presence, starts to generate customers, hires employees, and then ultimately grows to multiple locations. I lay those out along the horizontal axis

Step Two: Tiers 
Create three tiers of interaction with your customers ranging from one-time interaction at the bottom through repeat on up to recurring at the top. Reason being partners with a recurring relationship will have more opportunities to put you in front of their customer than someone who’s one-time and done. Here’s how your framework should now be laid out.

Step Three: Put Yourself on the Map.
Start by identifying where in the customer life-cycle you first start to gain meaningful numbers of customers and what the nature of your relationship is. Here are a couple of examples of where I would place different players in the small business space:

• LegalZoom helps businesses set up their incorporation and tends to have a repeat type of relationship with customers.
• Intuit/QuickBooks starts a little later in the life-cycle when the business starts to generate customers but definitely has a relationship that’s recurring in nature.

Step Four: Layered Identification 
Start to layer in the various players in your industry you could potentially partner with by placing them using the same approach you used for your own business. Once you have them layered onto the map step back and admire your work. It should look something like this:

Note: there are many more providers I could have added to this chart. If you’re interested in seeing a full spectrum of the players in the smb space, check out this Lumascape Lorren Elkins did last year for Street Fight.

Step Five: Identify Your Core
You core is the five or so businesses that are closest to where you are on the chart. What makes these businesses special is that they are engaging deeply with your prospective customers at the same time as you would likely produce the highest response. You’ll find your strongest call-to-action will work with those closest to you and as you drift away from your position you’ll have to leverage less of a sales pitch and focus more on education.

This is one of a number of frameworks we used to break down how we approached building out our channel programs. If you find this valuable add a comment and I’ll share some of the others.

Eric Groves is the co-founder and CEO of Alignable, the small business network where local businesses and organizations connect and collaborate with others nearby. Eric has been a local marketing expert and enthusiast since joining Constant Contact as a founding executive in 2001.