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December 5, 2005
Channel Results Come From Relationship
by Sridhar Ramanathan
We’ve all heard the rule of thumb that it costs a company typically four times as much to win a customer as it does to retain one. Very true. And the same applies to channel partnerships. I have a simple model for the lifecycle of a channel partnership. Notice how the “acquisition” phase -- prospecting for channel partners through to contracting-- is only half the picture in terms of phases.
In terms of investment allocation it’s actually only one tenth or less. For example, $100 might be allocated with $10 on signup (prospecting+ qualifying+ contracting), $60 on ramp-up, $20 on driving results, and $10 on monitoring.
Why so much on ramp-up? Results such as revenue only come after a substantial investment/ramp up phase in the relationship. This ramp up includes training partner sales teams, co-marketing, equipment loaners, technical certification, lead generation, and more. How would you allocate $100 across these phases of the relationship? Your comments/best practices very welcome.
Posted December 5, 2005 | Permalink
Posted to Channel Management