Sooner or later, every software company seems to reach the same moment. Direct sales are working, but it’s expensive and revenue plateaus. Then, someone in a board meeting says it: Channel.
Channel programs can certainly drive growth. They’re also where a lot of good companies waste a year because the fundamentals aren’t in place.
I’ve spent more than two decades in partner and reseller programs, both working inside them and building them from the ground up. Some were successful and I learned from people who knew more than I did. Others were stinkers, where I learned tough but valuable lessons from my mistakes.
At Intel, as chief of staff to the VP running a global ecosystem of ISVs, OEMs, SIs, and VARs. At Google, where I owned a $36M/year book of business with Google revenue running through a portfolio of reseller partners (Salesforce, Intuit, Verizon, and Network Solutions) who resold Google Ads to small businesses. Then from scratch, for multiple SaaS consulting clients, and at HealthFitness, where I was hired as the first dedicated partnerships leader tasked with building the channel program from 0-to-1, both signing and managing partners to drive meaningful revenue.
Hunting & Farming
Most articles about channel programs are about getting the agreement signed. Finding the right partners and getting them to commit takes real skill. But that’s the hunting half. The farming half, everything after the signature, is where programs actually produce or fail.
Almost everything that converts a signed partner into revenue is different work. The partner’s economics have to survive contact with their own comp plan. Enablement has to compress down to something a distracted rep will actually use. Internal teams that never asked for any of this need to stay aligned. And somebody has to still be there months in, when the first deal hasn’t closed.
That harvesting work is where I’ve spent most of my career. I’ve done plenty on the business development side as well, but the post-contract half is where I’m strongest, and it’s the half most programs underestimate.
One scope note before the list. This is about B2B software sold through resellers, VARs, systems integrators and consultancies, where there’s an assisted sales motion on both sides. If you’re running self-serve or product-led growth, some of what follows won’t map.
Here are nine ingredients that, in my opinion, make or break a reseller program:
And one note on numbers. Where I cite a commonly published benchmark, I say so. The rest are directional, drawn from programs I’ve built and run and from comparing notes with others who’ve managed their own.
1. Qualify the partner, not just the deal
A significant share of partnership failures trace back to early in the negotiation, where the vendor was so excited about the opportunity that they skipped the harder questions.
The most useful question I know when engaging a prospective partner: “What happens to this partnership if the deal in front of them dies?” A partner filling a genuine capability gap will still be there next time. A partner solving one urgent but isolated customer problem won’t, because the agreement they signed was a one-deal workaround dressed as a long-term relationship.
Certain information can feel like validation when it isn’t: they confirmed you do something they can’t, they named theoretically quick-win accounts nobody has qualified, or they quoted a big reachable-customer number nobody has checked.
None of that is a reason to walk away. It just means you haven’t finished qualifying.
The reliable way to learn whether a partner is committed is to ask them to commit to something:
Minimum volume commitment
Joint go-to-market plan
Named accounts at signing rather than promised
Named executive sponsor written into the agreement
Access to their sales team
Each of those is simultaneously a term and a test. The last one especially: a partner who won’t give you time with their reps has already told you exactly what those reps will do.
Then put your own on the table in the same detail. If you’re asking them to name accounts and an executive sponsor, name yours:
An executive sponsor on your side
The first qualified leads
Marketing support
Technical help actually staffed to execute the plan
And don’t forget the table stakes. Check the market, not just the partner: if the adoption isn’t there, no amount of enablement helps, and you’ll spend a year concluding the partner underperformed when the market was the problem. And if your own sales team can’t sell your product, forget building a channel program until they can.
2. Proof before partners
A reseller won’t lift a finger until they have proof points they can take to their own clients: a named customer, a hard number, an outcome a skeptical buyer will believe. Resellers aren’t evangelists. They’ve spent years earning trust with those clients and, for good reason, they won’t spend it on something unproven.
I once had a client who wanted to launch a channel program immediately. Strong product, but no reference customers that a partner could stand behind. I recommended they wait. A program without proof isn’t a channel; it’s a way to burn goodwill you’ll need later. They waited, built the proof, and launched when partners had something real to carry.
There’s a second kind of proof that’s easy to forget. Partners want to know which other resellers have sold the product and how those relationships worked. You need proof of the partnership, not just proof of the product. That’s the argument for starting with two partners and going deep. Depth is what produces proof. Breadth just produces logos.
And hand the first partner a qualified lead or two. Resellers obviously know they have to build their own pipeline, but seeding their pipeline proves your commitment and gets them to a win faster.
3. Model the partner’s economics before your own
Most companies design a reseller program around what they’re willing to pay. The programs that work typically start from the other side of the table with one question: “Can the partner really build a business that rides on your product or services?”
I learned this the hard way. Early in my consulting work I focused almost entirely on one client’s margins and went to prospective partners with an ostensibly-baked model that made sense for us. But I hadn’t sought input from any prospective partners.
We didn’t lose those partners, exactly, but we never gained traction with them either. Their incentive wasn’t there. We adjusted and it helped, but you usually get one real shot with a partner, and I had spent mine pitching instead of listening.
After that I went in collaboratively: “Here are the proposed economics, now tell me where you can or can’t see them fitting.” That took longer but it was worth it, and I learned to be as patient with a partner prospect as we have to be with a direct sales prospect.
Four specifics worth locking in:
Know when the benchmarks don’t apply: Commonly cited benchmarks put pure resellers at 5-10% margin and value-added resellers at 20-30%, which assumes an established category and deal sizes with room to grow. If your partner is educating the market on every deal, or your average contract is small, that underprices your channel and it’ll fail. In new categories, programs starting near 15% commonly end up between 35% and 40%. Every program I’ve been part of that started in the teens had to move. And reps live on real dollars: 15% of a $10,000 contract won’t move their comp needle.
Help them build a services business around it: Most resellers can’t survive on product margin alone. Whether they can build implementation, configuration, training, and ongoing management around your product matters more than the percentage. Help design that layer and their economics work at a margin you can afford.
Get the duration right: Does commission run through the initial contract or through renewals? Share margin in perpetuity where you can. A partner paid across the life of a customer has a reason to keep that customer happy. A partner paid once has a reason to sign and move on.
Follow it to the individual sales rep: The economics have to reach the specific salesperson on the partner’s side. Does it count toward the number they’re measured on, and will they be paid the way they would be for a house product? If the deal is invisible on their comp plan then it’ll be invisible in their pipeline.
4. Enablement built for one distracted sales rep
Your enablement isn’t for the partner company. It’s for the specific, distracted salesperson inside that company who sells ten other products and will give yours about 90 seconds before deciding whether it can make them money.
If that rep can’t retell your story after one read, you’ve probably lost them. Skip the comprehensive deck. Give them five bullets and a story someone can repeat in an elevator.
Years ago, working a partnership with Salesforce, I watched their reps struggle with the extensive in-person training we were providing. The material was valuable but they were drowning in it, with a global launch event coming up in days. With help from our product team, I built a single one-pager, which I laminated at Kinko’s at midnight before the launch, compressing the value proposition to what fit on one card a rep could pin to their putty-gray cubicle wall when they found it on their desk in the morning. A one-pager certainly didn’t solve everything, but it made the pitch far more digestible because it respected how little time a busy seller has.
5. Align your own house before trying to influence theirs
This is the one I see companies miss most often. A channel doesn’t just require the partner’s organization to show up. It requires yours, and most of the teams a channel depends on are often never consulted.
Start with the question programs skip surprisingly often: “Which internal stakeholders are responsible for the success of this partnership?”
There’s program management, someone to close new partners, and someone to activate and manage them once signed. From the partner’s perspective, activation and management arguably matter more and should be a selling point for the business development team. The partner needs to know that after the ink dries they have a counterpart committed to the relationship succeeding. Plenty of programs staff the closer, which they should, and never staff the manager.
And comp that person deliberately. Paid on closed partner revenue, they’ll gravitate to the partners already producing. Paid on activation and partner-sourced pipeline, they’ll do the harder work of getting a new (or stalled) partner to a first win.
Where programs can go sideways due to internal misalignment:
Sales: If your direct team isn’t compensated on channel-sourced deals, they’ll treat partners as competition. Channel conflict is rarely a partner problem; it’s a comp plan problem. Set time-stamped deal registration, decide in advance what happens when two partners register the same account, and name the prospects that are off-limits to both of you. Write all three before your first deal, not during your first conflict.
Solutions architects and technical teams: Partner deals need technical support during the sale and integration work after it. If nobody budgeted that bandwidth or reflected it in how those team members are measured, you’ll hear a version of “I don’t have time for this” and they’ll be justified.
Client success: Who manages the customer after the sale — you or the partner? If it’s you, that team just inherited accounts it didn’t source, doesn’t know what was promised in the room, and may not be staffed to carry them. Decide who the customer calls when something breaks, and make sure that person has a name and a number on the partner’s side. And make sure someone on your side sees the renewal coming.
Marketing. A channel program has two marketing jobs: marketing to your partners, and equipping your partners to market to their customers. Both are real work. What I have watched repeatedly is a program announced and then pitched over the wall, with marketing finding out it now owns a channel nobody consulted it about.
In short: Rally all relevant teams before the first partner signs.
6. Settle whose paper you’re using early on
Early on, discussions with a prospective reseller arrive at the same question: “Whose contract does the customer sign?”
Most partners push hard for their own paper, and the reason is legitimate. They want to own the relationship so that, in turn, they own the revenue and the renewal.
What matters isn’t what the partner says they’ll own. It’s what they are capable of owning and then actually own. If you’re in the background while the partner runs the entire client engagement, their paper makes sense. If they make the sale but need you to run everything after signature, that drifts toward yours.
What helped was setting the boundary against three specific things in advance: who holds the billing relationship with the customer, who provides first and second line support, and who carries indemnification when something goes wrong. Where the partner owns all three, their paper makes sense. Where you own two of the three, it’s yours. It won’t resolve every case, but it turns a negotiation you keep relitigating into a policy you can point to.
Protect three things regardless of whose paper it is:
Access to the end customer
Your own data
Visibility into renewals.
And be honest about the trade. A deal with no attribution, no customer access, and no reference rights carries a real cost, and the margin should reflect it. Plenty of white-label deals are worth doing on those terms. But they probably aren’t worth doing at benchmark margin.
7. Measure activation, not signatures
The vanity metric is partners signed. A new partnership gets a press release, but on its own it means nothing.
The metric that matters is activation: “How many partners have actually sourced a deal, and how fast did the first one come?” Track time to first deal, partner-sourced pipeline and revenue, and your active partner ratio. Commonly cited benchmarks put acceptable activation above 40% for early-stage programs and above 60% for mature ones, which tells you how low the floor is.
The windows are tighter than most people plan for, and they scale with your sales cycle; if your average deal is six figures on a nine-month enterprise cycle, stretch every number to match. Partners who get to a first deal inside 90 days are far more likely to still be active at the 12-month mark.
One thing almost every program gets backwards: Don’t gate first revenue behind certification. A 90-day gauntlet ahead of the first deal kills momentum before any revenue exists, and a large share of partners who haven’t completed onboarding by then never activate without direct intervention. Let them register and pursue while they certify. Gate what carries real risk, like demos and implementations.
There’s a harder boundary on that same clock. In my experience, if a partner hasn’t won at least one deal within around six months of signing the agreement, they generally never do. It isn’t disloyalty. It’s just that their reps have to make a living, and if your product is a hard sell (or if they don’t have the right support to sell it) then they’ll rationally move to something that pays this quarter. Treat six months as a decision point: diagnose the blockers, fix the economics, or release them.
Five active partners beat fifty logos every day of the week.
8. Respect the co-opetition risk
The riskiest partner is the platform that could become your competitor. This is the one people tend to learn the hard way.
There’s one recent example in the Healthcare AI AI. Epic, the dominant electronic health record, collaborated with a wave of ambient AI scribe companies, including Abridge, Microsoft’s DAX, and Ambience which helped validate the entire category.
Then in February 2026, once the market was proven on its platform, Epic shipped AI Charting, its own native scribe, with no separate contract for the health system to sign. Epic built AI Charting in collaboration with Microsoft, running models through Azure. So of the partners who helped prove the category, one ended up inside the platform and the others ended up competing with it. And they weren’t evicted. They keep the integration and the marketplace listing, and they compete with the platform for the same buyer at the same time. But the partner who had been closest to Epic, sitting in its invitation-only co-development tier, was moved down to the same designation every other ambient vendor already held.
The pattern isn’t particular to healthcare, of course. It happens often enough in consumer software that it has a nickname, Sherlocking, after Apple shipped native functionality that displaced a third-party tool built on its own platform. Any platform eventually looks at the categories its ecosystem proved and asks which ones it should own.
That isn’t a reason to avoid powerful platform partners. Their distribution is real. So structure for it, contractually rather than just attitudinally. Term length and change-notice provisions negotiated up front cost little and mean a platform partner can’t easily reprice or sunset the relationship on short notice. The customer access and data protections above matter even more here, because the partner who could become your competitor is also the one learning the most about your business.
One concrete thing you can do before signing: ask whether your category is on their product roadmap. Directly, and of someone senior enough to actually know.
And your partner has the mirror-image fear: you might change terms, raise prices, or sunset the program. Raising it before they do is a differentiator rather than a concession.
9. Give the program and partnerships the time they need
Build a channel program from scratch and you can be prone to fantasize about serious revenue inside 6-9 months. Unless you’re able to feed the program and partners hefty resources out of the gate, plan instead for 12-15 months.
This is a different clock from the last section. Six months is the right decision point for an individual partner who isn’t producing. It’s the wrong one for the program itself, and confusing the two is how good programs get killed a quarter before they work.
I once had a client for whom I built the reseller program from the business case up. I told them at the outset they’d need to give it at least twelve months, in large part because they were still trying to identify their first customer proof points and they did not yet have the cross-functional infrastructure or resources to execute quickly. We were the bottleneck.
They said they’d be patient.
At the 6-month mark, with partners not yet producing, they asked where the revenue was. I wrote an analysis saying that, given their own sales team was struggling to sell the product, it’d be another 6-9 months before revenue grew from a trickle to a steady stream. I knew recommending they stay the course would probably cost me the client. (It did.) I wrote it anyway, because the alternative was telling a client what they wanted to hear about their own money. They couldn’t wait, so we shut it down. All things considered, it was the right call.
So, give your program and partners the time they actually need. Without fail, that’s always longer than you want it to be. The alternative, though, is buying an expensive write-off and a set of partners who now tell others you weren’t serious.
If you’re honest with yourself that the program must flourish within six months of inception, I recommend waiting.
Embrace the Unglamorous
None of these nine are complicated, or even particularly original, and that’s the point. Reseller programs don’t fail because the ideas are difficult. They fail because teams skip the unglamorous parts — the qualification, the partner economics, the enablement compression, the internal alignment, and the long-term perseverance to succeed.
A reseller program isn’t a distribution hack you bolt on. It’s a set of relationships you build like a business, one at a time, with the partner’s success modeled and considered as carefully as your own.
These partnerships exist to drive transactions. The relationship that produces them can’t be run that way. If a partner senses they’re a short-term means to an end rather than a long-term partner, you’ll get exactly what you built.
Build it with the fundamentals in place and your partners will continue opening new doors for you well into the future.
Chad’s Business Channel is where the professional writing lives: articles on healthcare AI, partnerships, and go-to-market, written for the people building and buying in that market. Each piece publishes on LinkedIn as well, where most of the conversation happens.
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