Channel Marketing 101:
How to Get Started

Given the tightening of budgets and emphasis on maximising ROI from investments, channel marketing represents a significant opportunity for propelling growth, if leveraged correctly.

One example of the channel’s potential to enable indirect selling, is Dell Storage’s Go-to-Market model (GTM). This strategy is built entirely on partner-led growth to counteract the impact on revenue generation from economic uncertainty—a drop in revenue of 20% overall (IT Channel Oxygen, 2023).

This partner-first tactic is reinforced by a reward scheme that awards sales representatives with higher commissions if their storage products and services are sold via a partner instead of directly. In total, 99% of current and potential Dell clients will be considered partner-led for their storage solutions.

The emphasis on partner-led marketing strategies, such as this example, are clear indicators of the efficiency of channel marketing to attract and grow client relationships.

This has led to an increasing number of businesses to adopt ecosystem-led growth (ELG) GTM strategies, focused on partner ecosystems as the primary way to build a client base and drive growth.

According to Crossbeam, ELG deals are 53% more likely to close and at a 46% faster rate. ELG-sourced clients are also 58% less likely to churn. The same report also found that 30% of pipeline was attributed to partners in 2023.

Furthermore, McKinsey predicts that the ecosystem growth model will reach $60 trillion by 2025, given the growing demand for seamless buyer experiences from clients (Accenture). This, following the 2023 Canalys forecast of channel partners driving 70% of the $4.7 trillion worldwide IT market, highlights the growing role of channel marketing in GTM models.

While the state of channel marketing continues to evolve, its principal value remains clear. The core benefits for each party involved are the following:

In short, successful channel marketing not only mitigates risk, but also enables all involved to secure more value, and more quickly. This positions channel marketing as an even more pertinent strategy considering the defensive state of the B2B buyer.

Below is a breakdown of the four core steps to establishing channel marketing strategies and building a partner ecosystem.

Carefully analyse the capabilities of potential partners, their reach, the challenges of their markets and most importantly, how they address them to drive revenue. Developing partner assessments specific to your needs can facilitate this process (and will be important for step three).

For example, this process should ensure that partner audiences are aligned with your ICP and target market. Ideally, partners should share intelligence with you to illustrate this, however, combining this with your own research and leveraging your own intelligence can be helpful for discerning the most beneficial partnerships.

Finally, the channel partners you select should also align with your overall business goals and approach to ensure a productive partnership and culture match. This should also include quantifying the ability of partnerships to further said goals.

After determining the best partnerships, approach partners to discuss the details of your agreement. This should include establishing partnership KPIs and goals, as well as the responsibilities of each party involved in achieving them.

Your agreement with channel partners should also cover review cadences to evaluate current performance against the goals set to inform pivoting or optimising strategies. If necessary, this can also include an assessment of the partnership in general, to determine the need for more extensive changes.

In short, clearly outlining all of the details of each partnership at this stage will help to avoid issues that arise.

A common element of enabling partners to drive value is the attribution of market development funds (MDF) to each partner by the main vendor. While partnerships show great potential, the process of assigning MDF to partners is an area of significant debate in the channel space due to the following three challenges:

1. Partners not delivering value due to a lack of MDF
2. Partners receiving adequate MDF, but not enough vendor support to activate strategies
3. Lack of partner training resulting in MDR going unspent and partner resources not being used

These challenges can result in a cyclical issue where channel partners, even if typically high-performers, are not able to achieve performance goals.

Given that the process of assigning MDF is often informed by performance, this results in partners receiving less for future channel marketing efforts. Conversely, low performance may be influenced by partners not taking full advantage of the funding provided, due to a lack of support—or partner-vendor engagement.

This has led to the development of two key approaches to distributing MDF to partners:

In essence, accurately attributing budgets and MDF are critical elements of ensuring that channel partners are aligned with goals and well-equipped to deliver meaningful and scalable performance with campaigns.

As an extension of your in-house teams, educating and providing training to your partners is a must. This can help them focus on and navigate the evolving expectations of your buyers to provide better experiences and drive engagement.

Depending on your goals, this could include training partners on the types of content and topics best suited to your buyers—or simply keeping partners informed of the top challenges impacting your buyers.

Encouraging the sharing of data insights between partners in your partner ecosystem is also another powerful tactic for ensuring that teams are leveraging the latest intelligence for their campaigns. Consider establishing regular communication with your ecosystem (including partner to partner) to enable reporting and necessary optimisations.

Demand generation is a powerful driver of channel marketing outcomes, especially given the focus of channel marketing on expanding reach and enabling buyer engagement in broader markets.

In short, demand generation drives brand awareness by engaging the decision makers in buying groups at target accounts. This helps to establish a strong foundation of interest, that keeps brands and offerings top of mind for when prospective clients are ready to make a purchase.

As a result, demand generation strategies play a key role in nurturing buyers along their buyer’s journey, motivating conversions and higher client lifetime value (CLTV)—by supporting seamless buyer experiences.

While demand generation marketing strategies vary depending on the goals and capabilities of each organisation, they can include initiatives such as:

When applied to channel marketing, these demand generation strategies enable partners to drive valuable opportunities and establish long-term, valuable relationships with prospective buyers. As a buyer-orientation strategy, demand generation is a far more sustainable strategy than focusing on lead generation alone—and is key to amplifying the performance of partner ecosystems.

Intelligence gathered from demand generation campaigns can also inform the optimisation of MDF budgets and partner marketing strategies. This can include leveraging complementary performance marketing techniques, such as pay-per-click (PPC).