April 30, 2021

To Win, Outsource your Channel Partner Program

Dive into the advantages and disadvantages of outsourcing your channel incentive program.

Lucy Nguyen

channel partner loyalty

The global outsourcing industry has grown to over $90 billion since the 1980s. Contracting out business processes has become standard practice. From cloud providers to cybersecurity, and of course channel management. 

Companies are moving their in-house channel program to a trusted vendor to reap the benefits of cost savings, efficiency, and specialized knowledge. Still unsure if you should outsource your channel partner program? Let's break it down. 

Advantages of Outsourcing

Efficiency

On average it takes 4-9 months to design the platform. That does not include planning, recruitment, testing, and launching. It can drag on and sometimes end up in purgatory. 

With a dedicated partner, the development process is cut in half. Working with a trusted vendor, you can rapidly onboard a sales rep and implement your program quickly. 

Agility

The ability to scale up and pivot is easier with outsourcing. Deloitte found in their "2020 Outsourcing Report", organizations cited their partners are a part of their competitive advantage. They can provide the speed, quality, and flexibility needed to stay ahead of the game. 

Often, in-house programs are rigid. Change is slow due to shifting priorities, lack of budget, and resources. Letting a program languish and remain unchanged has been the death of many programs.

Cost-effective

Deloitte found 70% of companies indicated cost reduction was their main reason for outsourcing. Using a third-party provider allows for companies to focus on their core competencies. They don't have to worry about overhead, IT infrastructure, and recruitment. 

Building and maintaining an in-house program is costly. That's why many outsource to reduce the burden of designing and developing a channel program.

Specialized Knowledge

With outsourcing, companies gain access to skill sets that aren't in-house and can bridge the technology gap. For example, Deloitte found many outsource to take advantage of artificial intelligence. With a channel program partner (like us!), there are years of knowledge to draw upon.

Specialized talent is in shortage across the board. Retaining talent is a challenge for in-house programs. Even if you manage to find someone, burnout and turnover are a real possibility. They can also be lured by outside offers you cannot compete with.

Reducing Friction

Sometimes there is drama (and not the juicy kind) between the in-house management team and channel partners. For example, friction can occur when a channel partner isn't selling their brand exclusively or channel partners feel they aren’t supported or empowered. 

Relationships often break down and deteriorate, a situation no one wants to be in. Agencies can become the bridge. They are unbiased and can act as a mediator, helping to preserve the relationship for the long term.

 

Disadvantages of Outsourcing

Lack of Control

Sometimes the development process of the program isn't transparent. There is no day-to-day visibility where you can pop in and ask a question right away. Developing a relationship with the agency is critical to ensure the program is created the way you want to.

Communication 

There could be cultural differences, time zones, language barriers, and clashing communication styles. Choose a vendor with whom you can connect with.

Brand Knowledge

Your organization will already know your customers, products, and brands. Outside agencies will have to build up that knowledge from scratch. This can be mitigated by communicating clearly with the agency.

Conclusion

Outsourcing is becoming standard practice for channel partner programs. The benefits gained from working with a trusted partner cannot be replicated in-house. While the disadvantages of outsourcing can be managed and mitigated by taking the time to carefully choose your partner. 

Here at ChannelAssist, you can feel assured you are getting all the advantages of outsourcing and none of the disadvantages. With over 20 years of experience in the channel, a proven track record, and a growing team. We are ready to help you. Your Channel Partner program will be in good hands.

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Knowledge = Money.
Join the ChannelAssist community and make more money in the channel.

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Knowledge = Money.
Join the ChannelAssist community and make more money in the channel.

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