Surfing the Channel — Channel Partners, That Is

I spent the past weekend in Las Vegas engaged in a highly complex partnership with casinos, restaurants, limousine companies, rental-car agencies, and an airline. I was out to win money, and they were out to take whatever I dished out. I relied (for some time and without much success) on each of these organizations for some product and/or service to aid me in my quest for untold riches in the city of sin.

On my flight back to San Francisco, I thought about how successful Las Vegas has become in the past five years. My airline, rental-car company, and travel agency were all seemingly in cahoots with one another. (I got a great package deal.) The hotel/casino offered promotions for certain shows and restaurants and made available only certain limousines; but it took my money any which way it could. Each of the organizations that I dealt with has invested in certain partner relationships to help drive sales and customer satisfaction.

All kidding aside, what exists in Las Vegas (and in all mature markets) is a highly developed set of relationships in which organizations more effectively acquire, manage, and retain customers by leveraging the services their partners offer. The trick is to establish partner relationships that accomplish three key things:

  1. Provide access to a base of customers you previously did not have

  2. Make a product and/or service available that you previously could not offer to existing customers
  3. Generate new streams of revenue

In Las Vegas, or elsewhere in the offline world, establishing symbiotic partnerships may seem easy, but achieving the same online is much trickier and riskier. Assume that you can solve the challenge of customer anonymity and segmentation (which would allow you to effectively target interactions). You are still left with the challenge of tracking transaction, revenue generation, and recognition on a channel-to-channel basis, and then evaluating the performance of each deal. It’s enough to make you gamble on a few name-brand (and expensive) partnerships.

But don’t be so hasty to throw in your chips and bet on the wrong partner. Rather, heed the following guidelines to make sure you choose the right channel partner and come out a winner.

Identify your strongest channel partners to help you meet discrete marketing goals. Building an effective channel strategy requires that you assess the needs of your customers and the offerings that different channel partners boast. Select partners who will be most able to provide services that help meet your goals (whether they are acquisition or retention focused).

Design products and services to fit the relationship. Successful channel partnerships are those that create a foundation that both organizations can leverage to bring unique products and services to market. Unless you are selling a true commodity, you should be thinking about how you could develop and market your products and services to take advantage of the channel partnership. Are the channel’s customers a different demographic? Do they have more advanced customer service needs? Are they more affluent than your regular customer base? What are their specific needs?

Measure the channel relationships. As I mentioned in my last article, marketing is about creating demand. I’ll only mention this once in this article because I am sure I’ll say it again in a future article: Make absolutely sure that you can measure what you are doing because at some point, you and everyone else will start asking questions. Having the answers not only helps you avoid looking silly, but it also helps you make smarter decisions.

Think deeper. What are the strongest channels within your partner channels? Is it better to be part of a partner’s Web site or part of a partner’s direct marketing efforts? Consider your options when planning the nature of the relationship you are entering. Having a channel partnership and having a successful channel partnership are two very different things. For Web-based companies, channel partners are a great way to gain exposure and access to customers in the offline realm. The reverse is true for offline companies. Why do you think Amazon and Wal-Mart are finally playing nice?

So, that’s all for this week. Consider it a rough guide to building your channels and increasing your sphere of influence. As always, I would love to hear how you are doing.

Oh, and just in case you’re dying to know, my game of choice is craps, and I lost a total of 300 bucks during my entire Vegas weekend. But for a while there…

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