5 key channel partners and how to choose the best for your SMB

Channel partnerships serve as a force multiplier, helping you scale sales without relying solely on internal headcount.

Even if you have a great product and a solid sales pitch, you can only call so many leads in a day. Scaling your internal sales efforts is the traditional fix, but it can be expensive.

By partnering with businesses that your ideal customers already trust instead, you can expand your reach more quickly – without ballooning your payroll.

In this guide, you’ll learn what channel partners are, the five most relevant types for SMBs and how to use Pipedrive to keep partner activity organized as your program grows.

Key takeaways for channel partners

• Channel partners lend you the credibility they’ve already earned with their clients, which shortens your sales cycle.

• Preparation is key: you need a proven sales process, a simple agreement and ready-to-use marketing assets before you’re ready for new partners.

• When getting started, referral partners are great for volume, while value-added resellers (VARs) and service partners bring higher customer retention.

• Start a 14-day free trial and use Pipedrive’s pipeline features to manage partners in the same structured way you manage leads, keeping partner activity visible and easier to act on.

What is a channel partner?

A channel partner collaborates with a vendor to market and sell that company’s products and services.

They act as an intermediary between you (the vendor) and the end customer.

Think of direct sales as a lemonade stand where you serve every cup yourself. In contrast, channel sales would be like convincing the local grocery store to stock your lemonade on their shelves.

You make less profit per cup, but the cost-effectiveness of selling thousands more cups offsets the lower margin.

Here’s how these two sales strategies compare:

The most critical element here is trust.

When a consultant advises their client to use your software, the client listens. The consultant has done the hard work of building a relationship. When they recommend you, they transfer that trust and market reach to your brand.

Prerequisites: Start strong with these 3 essentials

Many small businesses jump into a channel partner program without enough preparation, trying to make quick revenue.

The problem is, your partners will be busy. They’ll focus on the products that are easiest to sell. Before sending an email to a potential partner, ensure you have these three assets in place.

1. A proven sales process

Instead of expecting partners to figure out how to sell your product on their own, give them a clear path to follow. The easier you make it, the more confidently and consistently they can sell on your behalf.

Before bringing partners on board, it helps to have a sales motion that’s already working internally. That way, you’re sharing a tested process, not asking partners to experiment.

A simple partner enablement playbook should cover:

• Your Ideal Customer Profile (ICP): What customer segments should you and your partners target?

• The hook: What is the one-sentence value proposition that shows your competitive advantage?

• Objection handling: What do customers usually say no to and how can you best answer?

• The demo flow: A script or checklist for showing off the product.

With a comprehensive, easy-to-use sales playbook, partners can confidently position your product and present themselves as experts from the very first conversation.

2. A simple partner agreement

A well-structured agreement creates an understanding between you and your partners about how the relationship operates and how you reward success.

It should cover:

• Commission structure: How much will you pay your partners? (e.g., 20% of the first year’s revenue).

• Payment terms: When do you pay them? (e.g., Net 30 after you receive payment)

• Lead registration: How will your partner claim leads so that two reps don’t cover the same client?

• Termination: How can either side end the partnership?

For most small- and medium-sized businesses (SMBs), a two- or three-page memorandum of understanding (MOU) is typically sufficient to launch an early partnership.

An MOU is simply a non-binding agreement that outlines terms. It sets expectations so both parties are on the same page, without needing expensive lawyers.

3. Marketing assets (the Partner Kit)

Providing professional channel partner marketing materials empowers them to start selling immediately.

When you provide high-quality content, you control your brand messaging and make it easy for partners to integrate your solution into their conversations. Make sure it contains:

• Email templates: pre-written sales and marketing messages they can send to their email list

• One-pagers: PDF summaries of your products and pricing.

• Co-branded slide deck: a sales presentation where they can easily insert their logo next to yours

• Social media assets: images and captions ready for use on social media platforms such as LinkedIn

Once you have these assets ready, you need to decide which type of partner is the right fit for your business model.

5 best types of channel partners for SMBs

When investigating suitable channel partners, consider what your product or service requires.

You may benefit more from physical distribution, technical support or just more leads.

Different partner models solve different problems. The table below compares five common channel partner types to help you assess which ones align with your sales goals, product complexity and current stage of growth.

Here’s a closer look at each of these partners and how growing SMBs can secure long-lasting relationships with them.

1. Referral partners (affiliates and advocates)

Referral partners introduce your business to their network in exchange for a reward.

They make up the simplest form of channel sales, but typically don’t close the sale. Instead, they simply hand you the lead (including name and contact information) and your sales team takes it from there.

Referral sales partners can include affiliates, influencers and loyal customers who advocate for your brand and drive customer acquisition.

For example, Gusto, a payroll software provider, built an extensive referral network of accountants. It knew that when a small business needs payroll, they ask their accountant. So, Gusto created a partnership program for accountants, giving them a commission for every referred client.

Is this right for you? Yes. Referral partners are the lowest-risk starting point for almost any business. If you have happy customers, you’re ready for a referral program.

How to secure referral partners

Start by looking for the people your customers already trust in the places where they spend most of their time.

You need to find the key voices that influence your buyers’ daily decisions. Here are a few types of referrers to consider:

When you find a good fit, reach out with an offer that rewards both the partner and their customers. Give the partner a commission and their client an exclusive discount. This approach makes the partner look helpful to their audience and also improves the customer experience.

Don’t ignore your current user base. You can create an advocate program to turn your happiest customers into your best referral sources. Look for those that use your product the most or have the highest customer satisfaction and invite them to the program.

Common challenges and how to avoid them

Referral programs are easy to start, but can quickly become messy without clear rules. Here are some common challenges and suggestions for addressing them.

• Low-quality leads: Partners might try to send you every contact they have just to see what sticks. Define a qualified lead in your agreement, so you only pay for legitimate opportunities.

• Partner fatigue: Partners will only promote you if you keep them interested. Keep your brand top-of-mind by sending a monthly partner newsletter with updates and sales tips.

• Brand misrepresentation: Enthusiastic partners might describe your product incorrectly or promise features you don’t have. Provide pre-approved email templates and assets so partners describe your product accurately.

As your deal volume grows or your sales process becomes more complex, you may need partners who can take on more of the sales and implementation work, such as VARs.

2. Value-added resellers

A VAR purchases your product, adds its own features, hardware or services to it, then resells it as a complete package.

VARs are what most people think of when they say reseller partners. They’re primarily for companies in B2B tech, SaaS, healthcare software and cybersecurity. If you’re in a different industry, you can skip to the next section.

If you want to become a Pipedrive partner yourself, visit the Pipedrive Partner Program to review requirements and benefits.

Is this right for you? If your product is mainly self-service, a VAR may add unnecessary complexity at this stage. These models work best for complex products that require implementation or hardware.

How to secure VARs

Target technology providers that already sell to your ideal customer but lack your specific tool to complete their ecosystem.

You need to find partners where your software fills a critical gap in their hardware or service offering. Here are a few types of VARs to consider:

Once you find them, pitch your concept of a whole product. Explain how bundling your software lets them charge clients a premium.

You typically need to offer significant wholesale pricing so they can add their own markup. This margin is their primary motivation for carrying your product.

Common challenges and how to avoid them

Reselling technology involves legal and technical complexity. Here are some common challenges and suggestions for addressing them.

• Support confusion: When the software glitches, the customer might not know who to call. Clearly define support tiers in your agreement, so the VAR knows when they can escalate a technical issue to your team.

• Margin pressure: VARs will always push for deeper discounts. Apply tiered pricing based on volume, where they only unlock better margins after selling a specific number of licenses.

• Competitor switching: Since the VAR owns the customer relationship, they can easily swap your software for a competitor’s. Some companies combat this by making it difficult to rip and replace your product without breaking their bundle.

If you sell physical products rather than software, you need a different type of partner altogether – such as distributors and dealers.

3. Distributors and dealers

Unlike referral partners, distributors and dealers purchase your stock, store it in their warehouses and handle the logistics of delivering it to the end customer.

A distributor typically covers a large region and sells to other businesses (like retailers). A dealer is usually a local business that sells directly to consumers or contractors.

For example, many consumer goods brands, such as Red Bull, rely on regional distributors to handle storage and delivery rather than building their own logistics operations.

Is this right for you? If you sell small volumes or made-to-order products, a distributor network is premature. Distributors need sales velocity and standard packaging before they’ll stock your item.

How to secure distributors and dealers

Look for companies that stock products that your target customer base is interested in.

The companies need to have the warehouse space and logistical network to move your product, like:

To secure a partner, you need to convince them that your product will fly off the shelves. Show them proof of demand, such as sales data, customer inquiries and preorders. Once you prove that your stock is a low-risk investment, they’ll buy in.

Keep in mind that logistics make or break these deals. Be ready to discuss minimum order quantities (MOQs) and shipping terms immediately. They’ll only list you if you can ship reliably.

Common challenges and how to avoid them

Physical inventory carries some financial risk. Here’s how to mitigate risk and keep your partners happy.

• Inventory stagnation: If your product doesn’t sell, the partner gets stuck with your stock. Offer a buy-back clause for the first six months to lower their risk of trying your brand.

• Price wars: If you sell to multiple dealers in one city, they might undercut each other to win sales. Enforce a minimum advertised price (MAP) policy to ensure everyone sells at a fair margin.

• Lack of attention: A distributor might carry 5,000 products. To stop yours from getting lost in the catalog, provide physical point-of-sale displays and sales incentives (spiffs) for their floor staff.

• Cash flow gaps: Distributors often demand specific payment terms (like Net 60). Make sure you have the cash flow to survive waiting two months for payment after shipping your goods.

If your product requires expert implementation rather than just shipping, you should look at service partners instead.

4. Managed service providers (MSPs)

Managed service providers are like an outsourced IT department for small and medium businesses.

MSPs are effective channel partners for SaaS companies because they control the technology choices for their customers.

If an MSP manages 50 businesses, it decides which antivirus or backup software all 50 of those businesses use. Instead of selling to the business owner, you sell to the MSP and it deploys your tool across its entire client base as part of its monthly service.

One well-known example is Datto, which sells data backup solutions exclusively through MSPs.

Is this right for you? If your product needs management or updates (like backup or compliance tools), MSPs are ideal. These partnerships typically require more support, onboarding and documentation. For early-stage SMBs, this model often makes more sense once internal processes are more established.

How to secure MSPs

You can find active MSPs by looking at the directories and lists they use to market themselves.

When you find a suitable MSP, offer them a not-for-resale (NFR) license for your software. It’s a free version of your software for the MSP to use and test internally.

Once they trust your product, offer them a reseller margin, allowing them to purchase licenses at a discount and resell them to their clients at full price.

You need to pitch on efficiency. MSPs run on tight margins and want tools that are easy to manage. If your product generates fewer support tickets than your competitor's, let them know. Show them how your tool helps them streamline their workflow and manage their clients more easily.

Common challenges and how to avoid them

MSPs are on the lookout for anything that might slow them down, like:

• Poor implementation: If a technician misconfigures your software, the client blames the MSP. Create a technical certification process to ensure their engineers know how to deploy your tool correctly.

• Pipeline conflict: You might sell directly to a client that the MSP is already managing. Use a deal registration system to let MSPs claim a prospect, ensuring your internal sales team steps back.

• Billing friction: They dislike receiving separate invoices for every client. Consolidate your billing so they get one single invoice for all their licenses at the end of the month.

• Confusion about marketing support: Define simple rules for marketing development funds (MDF) or co-marketing support. Lay out who can request funds, what they can use it on and how they should report results.

Finally, if you want to tap into the customer base of other software companies, consider exploring integration partners.

5. Integration and tech partners

Integration partners are other software companies that connect with your product to share data or functionality.

For instance, Slack has become the hub of business communication by integrating with various tools. These integrations fueled Slack’s growth because every new partnership exposed a new user base.

Partnerships are compelling because they increase customer retention. A customer who connects your tool to the rest of their tech stack is far less likely to churn because removing your product breaks their entire workflow.

Is this right for you? Integration partnerships work best when you have an open API or a developer-friendly platform. If not, focus on creating a stable product that other developers can build upon before seeking partners in this area.

How to secure integration partners

Look for tools that your customers use in conjunction with your product.

Find non-competing software that solves the problems that happen before or after a user interacts with your own tool. Here’s where to look:

If you have an open API, try to build a basic working prototype of the integration first. Showing a functioning tool is infinitely more persuasive than a slide deck.

After that, you can convince them that you’re better off together. Explain how the combined solution addresses a customer problem that neither tool solves alone. You should also discuss co-sell opportunities, where your sales teams work together to close shared leads.

During your pitch, focus on retention metrics, demonstrating how integrated users have a higher lifetime value (LTV) compared to standalone users.

Common challenges and how to avoid them

Technical partnerships require more engineering resources, which can lead to these challenges:

• Building ghost integrations: Companies often spend months building connections that no one uses. Validate demand first by asking your customers which tools they want to integrate.

• Lopsided marketing: You might build the integration, but the partner never promotes it. Agree on specific co-marketing or go-to-market strategies in writing before you start coding.

• API breakage: If the partner changes their code, your integration breaks and the customer blames you. Set up a shared communication channel between your engineering teams so you get a heads-up before major updates.

Once you have secured your partners, you need channel partner software to manage them; otherwise, you risk missing follow-ups, misattributing deals and losing partner trust as competitors respond more quickly.

How to manage your partner ecosystem in Pipedrive

To maximize sales revenue, you need to track partners with the same discipline you apply to your sales pipeline.

Relying on spreadsheets can make it easy to lose visibility as partnerships grow, as follow-ups get missed, referrals fall through the cracks and ownership becomes unclear. At the same time, most SMBs don’t have the budget or operational need for dedicated partner relationship management (PRM) software.

Pipedrive sits between those two extremes. As a CRM, it provides a structured and affordable way to manage partner relationships and track referred leads without adding unnecessary complexity.

Here’s how to use Pipedrive’s pipeline management features to support a growing partner network and turn referrals into revenue more consistently.

1. Build a dedicated partner recruitment pipeline

Create a partner recruitment pipeline to monitor exactly where every potential partner stands in your onboarding flow.

A dedicated partner pipeline means you can vet and onboard partners and track your recruitment targets in a single place. It also makes it obvious who’s responsible for each partner and helps you spot stalled conversations before they quietly drop off.

Having a standalone partner pipeline also keeps recruitment activity separate from sales deals. It makes it easier to accurately forecast sales capacity, spot stalled partnerships and assign clear ownership.

Here are the recommended stages for this pipeline:

1. Identified: A list of potential partners you have found.

2. Outreach: You’ve sent the first message.

3. Meeting booked: You’re pitching the partnership.

4. Due diligence: You’re vetting their fit.

5. Contract sent: You’ve sent the agreement.

6. Onboarding: Your partner has agreed and is currently in training.

7. Active: The partner is ready to sell.

To set this up, first go to your “Pipeline view” in Pipedrive. Select the pipeline name in the top left corner and choose “Edit Pipeline” > “+ New pipeline”.

Next, click “+ Add stage” and create the seven stages listed above. Finally, click “Save”.

Make sure to use Pipedrive’s custom fields to segment them by type, territory or region. Go to “Settings” > “Data fields” and press “+ Custom field”.

Now, you can simply drag and drop your prospective partners between stages to track their progress.

This structure helps your team see recruitment as a daily sales activity. If you see the outreach stage is empty, you know you need to find new prospects to keep the partner program growing.

2. Create a friction-free lead submission portal

Use Pipedrive’s Web Forms (part of the LeadBooster add-on) to let your partners register deals themselves.

Asking partners to email you leads is slow and creates manual data entry work for you. It also makes it challenging to track which leads belong to each team member.

Instead, you can provide them with a simple link to a web form where they can enter the lead’s details. When they hit submit, Pipedrive automatically creates a deal in your pipeline.

This way, your partner handles the data entry for you and you never miss a referral in your inbox.

To set this up, go to “Leads” in the left menu and select “LeadBooster” > “Web Forms”. Click “New form” and choose a blank template.

Next, click “Edit” to add the specific fields you need, such as their name, company and deal value.

Then, go to “Options”. Under “Save preferences”, choose “Deal”. Every submission will now create a deal in your sales pipeline. Finally, click “Share” to copy the link.

Send this link to your partners. They can bookmark it and submit referrals in seconds.

Instead of waiting for leads to come in by email, then manually routing them to your team, you now have an entirely hands-off referral machine.

Partners follow the same process every time, which ensures consistency even as your network grows.

Channel partner FAQs

Final thoughts

Done correctly, the benefits of channel partners are clear – you’ll build a self-sustaining engine that delivers qualified leads without the overhead of expanding your sales team.

Take the time to determine which channel strategy suits your business and how to implement it effectively. Pipedrive helps you make this system scalable, with the tools to manage hundreds of external relationships without missing a beat.

Start your free 14-day Pipedrive trial to build a partner network that’s easier to track, manage and scale.