This is the next in our series of special reports for OODA members focused on federal business strategies for the Startup CEO (find them all here).
This special report focuses on channel partner strategies for high tech firms.
Your federal channel partner strategy is potentially a high impact way to accelerate your company’s ability to serve federal missions. A good strategy can make it easy on federal buyers to learn about your product’s features and remove friction when it comes to buying from you.
Conversely, A bad strategy can suck up all your time and deliver poor results.
We have observed both good and bad strategies and offer these thoughts to kickstart your program:
Establishing A Federal Channel Partner Strategy for the Tech Startup
1. Be a hunter. Seek out the right channel partners instead of waiting for them to come to you. Before doing so, have a clear vision of what you want your federal channel partners to do for you. The rest of this post can help you form that vision. But for now assume your vision is to establish a federal channel partner strategy to expand your sales capability, increase federal sales, and improve customer satisfaction.
2. Understand that nothing sells itself in the federal ecosystem. Even with the best channel partners you will need to invest personal time in developing relationships and closing deals and will eventually need to tackle questions like when to hire dedicated federal sales professionals and when to stand up your federal office.
3. Understand that no two partners are the same. Be ready to spend time finding the right matches.
4. Your company is also unique, so you will need to assess your strengths and gaps in the federal market.
5. If you produce enterprise software, you will want a channel partner that can hold your GSA schedule and advise on topics like pricing strategies. We have a favorite here (Carahsoft) because of their track record in helping small businesses grow.
6. There is a role for federal systems integrators as channel partners. But their interests and yours will not always be aligned. Be sure to maintain your own relationship with the end users in government, and stay in touch with seniors in the integrator you partner with to ensure you can identify and mitigate any issues.
7. Seek channel partners that can provide services that are complementary to your company and to other channel partners. For example, you will have a channel partner that holds your GSA schedule and helps close license-based deals, but may have another channel partner that sells services for installation and configuration of your solution (they will work closely with the firm that holds your GSA schedule since the customer will usually only want to contract once for both software and services). This service provider can also help with relationships and future sales, if they are incentivized by being able to deliver on more services.
8. Know when to walk away from a partner relationship. This can be very hard. Federal sales strategies take time, you should be ready to invest a great deal of time before the big deals close (at least two Octobers is the rule of thumb). However, while investing this time and energy you should see smart activity on behalf of your channel partners. Metrics are available to track positive movement, including numbers of customer meetings, numbers of webinars given, numbers of leads, numbers of follow-ups to leads etc.
9. Stay engaged. The CEO seeking to grow a federal market should be ready to spend at least 20% of their personal time meeting with federal customers and building channel partner relationships. This time investment does not go down when your federal team stands up. Plan on doing this long term.
Now What?
After thinking through the advice above you should have a better feel for what the goals of your federal channel partner strategy should be. A logical next step is to engage your network (which includes the OODA Network) to seek out potential channel partners to meet with.
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