When (and how) to scale your business with resellers and channel sales partners

by Steli Efti
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It’s every SaaS founder’s dream. You’ve built an amazing product. You’re just starting to get your first few sales. And then out of the blue some other company with thousands of existing customers wants to sell it for you.

No, this isn’t some startup fairy tale. They’re called Resellers and Channel Sales Partners and there are tech companies out there making hundreds of millions of dollars from them. So, why do I hear from a SaaS founder every few weeks who just started working with a reseller and hasn’t seen a dime?

The problem is, that if you want to get results from resellers and channel sales partners you need to know when to engage with them and how exactly to get the most from their resources.

What is a Sales Channel Partner?

There are lots of different ways you can get other people to sell your product for you. From referral and affiliate programs to consultants and agencies. But by far, the option that could potentially bring you in the most sales is Resellers and Sales Channel Partners.

Think of these programs like getting your product into a department store. They have a talented, dedicated sales force. Thousands of customers who trust them and want to buy from them. And a brand that people trust. All you have to do is supply them with the goods.

In the tech world, massive enterprise companies like IBM or Accenture have entire sales channel departments who sell outside technology solutions to their clients.

It’s an incredible opportunity to scale your business, but one that you need the right strategy to execute on properly.

When is the right time to start engaging with sales channel partners?

First, let’s get the basics out of the way: If you’re trying to get your first 10 or 100 customers, resellers and sales channel partnerships aren’t the right channel for you.

If you’ve only just built an MVP that you’re trying to sell so you can learn from real customers, these aren’t the right channels for you.

If you don’t have a steady and stable stream of customers and monthly income coming in, these aren’t the right channels for you.

Here’s why:

  1. Resellers and sales channel partners are not your golden ticket: These are strategies to accelerate and speed up existing growth. Not create it from scratch.
  2. They are only good at selling something that already works: If you can’t prove your product brings tremendous value to its users, these sales partners aren’t going to magically start selling it for you. Their incentive is to keep their clients happy and make money. And if your product doesn’t help them do that, they’re not going to put in the effort.

A reseller or sales channel can only accelerate the momentum and growth you already have.

So, if you’re 6 months to a year in, have a product that already has traction and growth, have experimented with and found success with content marketing, paid ads, and inbound and outbound sales, and are bringing in hundreds of thousands or millions in revenue, then it’s a different story.

You want to only engage with them when the time is right and you’re ready for that type of scale. Never before.

To make your partnership a success you have to treat them like your most important customer

Once you think you’re ready, you’ve had the meetings, and you’re ready to sign the contract, you think your work is over? Hell no! It’s just started.

The work isn’t signing the reseller, it’s what happens after you sign the contract.

But still, 90% of startups focus all their energy on negotiating and ignore the sales reps who is actually going to sell their product! And what happens if a sales rep isn’t convinced that a product is amazing and they’re going to make lots of money selling it? Not a damn thing.

Instead, you should be investing at least 2–3 months working on the channel partner, before they can work on their customers on your behalf.

At a bare minimum, this means you need to:

  1. Set up shop at your new sales partner’s office: Bring a support person, an engineer, and a marketer and set up shop in your new partner’s office and sell your product to them every single day.
  2. Create marketing and sales collateral for their team: Write the partnership announcement with them and give them sales scripts, case studies, and any other marketing materials they need.
  3. Sit next to their reps and coach them: Pick a few top sales reps and observe how they sell. Be around to explain how to overcome objections and get the sale.
  4. Research how your product fits in their ecosystem: Understand what other products they’re selling and find ways yours can integrate with and complement them.
  5. Sell up from the sales team to the C-suite: Do everything you can to help the reps make money. Because the more success they have selling your product, the more they’ll talk about it to people above them.

You can’t leave that organization until you’ve built at least the same amount of traction with them that you have with your other customers. And that’s going to take time, effort, and money.

But while it might take resources, these programs can make all the difference in scaling your business and hitting tens or even hundreds of millions in revenue. But it only happens if you put in the work.

Without the right timing and approach, you’re wasting resources you don’t have

There’s no denying this is a costly customer acquisition strategy. And there’s always the possibility you could go through all this work and still have the partnership fall flat.

But the potential results are worth the risk. If you’re ready.

Before you approach these kinds of partners, make sure you’ve put in the work. Have a product you know you can sell. And then give them everything they need to do the same. With the right time and effort, these kinds of partnerships can become rocket fuel for your startup.

Have you had experience working with resellers or channel sales partners or have questions about them? Let me know in the comments below.

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