Channel Partner Recruitment in the Software Industry – 4

 In Building Successful Partner Channels

business model channelLinks to previous posts in this series are located at the end of this post.

This series of posts discuss the best approach for recruiting channel business partners in the software industry. Click here to read the first post.

We focus on the most difficult scenario where the software vendor has neither customers nor business partners in the territory. We call this the “bootstrapping” phase.

This series of posts recommends what to prepare to ensure success with the recruitment process itself and it also discusses what it takes to find and sign-up those partners who are most likely to become successful in winning new customers in the market.

A successful partner recruitment activity for a new market is estimated to take approximately 9 -12 months including an initial market assessment performed prior to contacting any potential partners.

The posts conclude that successful business partners are made by dedicated and committed professionals. Until you have met your potential business partners in person you will not be able to make the right choices.

The Recruitment Process

With the preparation described in posts 1-3 completed we can now start the business partner recruitment process:

The recruitment process includes the following seven steps:

Partner Recruitment Process2Market Assessment

Moving into a new market of which you know absolutely nothing may not put you in the most favourable light when you talk to your potential business partners for the first time.

We recommend doing a simple market assessment before you start talking to any potential business partners. How to perform a market assessment may vary depending on the nature of your product and your value proposition. Please see our fact sheet “Market Assessment” for inspiration.

The Long List

Based on the Ideal Business Partner Profile you can now produce a long list of candidates.  The information sources for the long list are the Internet, LinkedIn, XING and other social media platforms. If you have a good idea of the keywords to use for the search, then you should be able to identify 15-20 candidates per location where you are to recruit. You must be able to perform these searches in the local language of the country where you are recruiting[1].

Now you pick up the phone and call the potential business partners on the long list to start the qualification process.

You call on the CEOs of the potential business partners and if there is curiosity you submit your information package.  You tell her that you will be visiting in the near future and would like her feedback soon.

The Short List

Based on your phone interviews you should be able to short list at least 5-10 candidates.  You will have to visit these short listed business partner candidates in person to produce the final short list.

At these personal meetings you will be introduced. You will present your business opportunity, your partner program and how you support your business partners. You will also present what you expect of your business partners. The business partner will present her business and her ambitions for the future. After this meeting the potential business partners will have to consider if this opportunity is worthwhile pursuing. Likewise you will have to consider if this business partner has what it takes to represent your brand and perform her channel obligations successfully.

Your objective should be at least 3-4 potential business partner candidates that are prepared to participate in an Assessment Centre.

The Assessment Centre

06_agendaThe objective of the Assessment Centre is to review the value chain and build the business partner P&L model together.

The software vendor and the potential business partner must share the same picture of what it will take to bootstrap the relationship and make it all the way to break-even.

The outcome of the Assessment Centre, which is typically a 1 or 2-day exercise, will be the most important “appendix” to the formal agreement, which you will sign with the chosen business partner(s).

Letter of Intent

Based on the outcome of the Assessment Centre a Letter of Intent is signed with the partner(s) who are qualified and motivated.

Sales and Marketing Training

Based on the Letter of Intent the software vendor will provide introductory training for the potential business partner’s management, sales and marketing staff that are to be involved in the actual business planning process.

Business Planning and Business Partner Agreement

Where the Assessment Centre provides the conceptual alignment between the software vendor and the potential business partners, the business-planning sessions are used to develop the detailed execution plan for the activities to be initiated to find, win and make the first happy customers.

As the software vendor has been through this process before, the business partner will expect most of the input to be provided by the vendor. The training mentioned above is required for an intelligent planning session, where the potential business partner has sufficient insight to form an independent view of what is required to move forward.

The final plan should include short term KPIs and milestones allowing for regular follow up and instigation of corrective actions as and when required.

Now the business partner agreement can be signed and the actual work commences.

The Time Schedule

The time schedule for accomplishing the partner search and sign-up as described above is illustrated in the Gant chart below:

Partner Recruitment Schedule

The first business partners you sign up in a new territory are critically important to your success and your reputation in that market. It pays to take the time required and be thorough with the expectation alignment and the business planning process.

Previous posts in this series

Channel Partner Recruitment in the Software Industry – 1
Channel Partner Recruitment in the Software Industry – 2
Channel Partner Recruitment in the Software Industry – 3

We have packaged the content of this series of post as a whitepaper also.

Business Model illustration courtesy of the Business Model Foundry GmbH

Click here to check out my book Building Successful Partner Channels

[1] In the small countries business partners will be able to and will also accept having these conversations in English. As you move into bigger markets such as Germany, Italy, Turkey, France etc. it becomes increasingly difficult to avoid the local language.

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