6 best practices to build a top performing channel
TRANSCRIPT
February 2013
Step-by-step guide:6 best practices to build a top performing channel.
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Contents
Building a best-in-class channel ecosystem .................................................................................................. 2
Best Practice no. 1 – Evolve your partner program to meet the needs of a rapidly changing partner eco-
structure. ....................................................................................................................................................... 3
Best Practice no. 2 – Run a data driven channel management organization. .............................................. 4
Best practice no. 3 – Create a better partner experience. ........................................................................... 5
Best practice no. 4 – Vendor-led marketing done right. .............................................................................. 7
Best Practice no. 5 – Create a PRM/CRM infrastructure that supports a robust partner and program eco-
structure. ....................................................................................................................................................... 8
Best Practice no. 6 – Build a great channel account management team. .................................................... 8
Summary ....................................................................................................................................................... 9
Meet the A-Team Authors and Contributors .............................................................................................. 11
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Building a best-in-class channel ecosystem
While the economy is in recovery mode, technology vendors and partners face a
rapidly changing marketplace in 2013 and beyond. Some partners are
exploring new opportunities in cloud related solutions and services while those
that are not evolving their business models face extinction. This leaves vendors
locked in fierce competition launching cloud based solutions and services. It’s
never too late for a vendor to re-assess their channel practices, enhance partner
enablement, measure partner and program performance, and ensure they have a
top-notch channel account management team helping their partners succeed.
This eBook explores six key areas important for creating a best-in-class channel ecosystem.
Incorporating the following practices will enable you to build stronger, more productive relationships
with your partners, and provide you with the competitive advantage you need to thrive in the channel.
Six critical areas we will cover are:
1. Evolving your partner program.
2. Effectively running a data driven channel management organization.
3. Creating a better partner experience.
4. Implementing vendor-led marketing – the right way.
5. Developing a PRM/CRM infrastructure that supports partner and program structure.
6. Building a strong channel account management team.
Today, customers and end users are making decisions about your products and solutions based upon
how they can best leverage technology for speed to market, competitive advantage and operational
efficiencies – not basic functions and architecture. As cloud computing continues to emerge, clients,
vendors, and channel partners are trying to figure out how their programs will be affected. Many
vendors continue to evolve their cloud strategies, but as cloud adoption accelerates, the demand for
vendors to meet their partners’ needs does too.
Now let's dive into our first best practice.
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Best Practice no. 1 – Evolve your partner program to meet the
needs of a rapidly changing partner eco-structure.
Channel partners know that cloud computing is changing their position in the demand chain – yet they
still aren’t receiving the help or guidance they need from vendors. To enable partner success, vendors
need to offer business model transformation assistance and resources to develop customized, scalable
cloud solutions, while driving ongoing revenue for long-term business sustainability. Vendors should
allocate resources to help partners address their transforming eco-structure, in addition to technical
sales and marketing support.
Transitioning partners to the cloud computing business model will require “financial engineering” on the
part of vendors. Partners that commit to the transformation will experience a significant gap in revenues
and cash flow when transitioning from a transactional to a subscription or pay-by-use model. They will
need to pay their sales teams a substantial portion of sales commissions based on the total Lifetime
Value (LTV) (or at least for the first year’s value). Vendors should consider offering channel program
enhancements. One such enhancement that should be provided is a “financial bridge” – this means
paying partners the first year equivalent of revenues of a two or three year contract in one lump sum,
providing incentives for (subscription based) contract renewals, and paying SPIFFs to partner sales
teams for closing multiple year contracts.
In addition to offering a “financial bridge,” partners will expect vendors to help them:
Develop a sound cloud services business plan.
Select the right model of engagement based on current and planned cloud business goals.
Provide “financial planning for the cloud” – how to project revenues, manage cash flow and re-
design sales compensation structures to successfully transition to the cloud.
Partners also need vendors to transfer marketing knowledge and tools to them via:
Self-service, pre-packaged cloud services marketing campaigns.
Compelling incentives programs that motivate partners and their teams.
Turn-key marketing automation tools providing email content and images (simple cut and paste),
direct response landing pages customized to their business, and selling tools to get in front of their
customers.
Where you and your partners align in the cloud computing solutions stack will have significant impact on
profitability. Many are already beginning to see the effect of commoditization in the cloud computing
eco-structure.
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Evolve your partner enablement strategy by taking these following steps:
Assess – your partners’ needs.
Enable –partner success with the fundamental tools to transition to a
cloud-based business model.
Coach – partners in workshop sessions that help them IMPLEMENT a
cloud-based business model.
Create Demand – by providing marketing expertise and self-service, pre-
packaged cloud services marketing campaigns.
Best Practice no. 2 – Run a data driven channel management
organization.
Data driven channel management is imperative for vendors looking to optimize channel investment. Do
you know which programs actually change partner behavior? Many vendors don’t. They often focus on
driving cost out of the 5 percent of channel spend required to manage program delivery instead of
optimizing the 95 percent of funds distributed to partners. Vendors should focus efforts on:
Identifying specific programs and partner segments where benefits are effective – and where they’re ineffective.
Reducing spend for specific partner segments and/or programs that fail to deliver results.
Shifting financial incentives between partner segments, partner attributes and programs to increase performance and optimize investments.
Pinpointing and prioritizing partners with the greatest potential, and aligning your resources accordingly.
In order to accomplish the tasks listed above vendors must create and gather relevant data. Pulling data
from disparate sources will provide a customized 360 degree view of your partners. Aggregate, clean
and verify the data in order to create a foundation from which to understand partner behavior. Next,
use data mining and statistical methodologies to build a complete understanding of your partner's
behavior and potential value.
To assess whether your partner programs are working, create a control group of those partners that are
participating vs. those who are not and then analyze your findings. You can accomplish this by:
Evaluating the performance of participants group vs. the control group for key metrics like sales, frequency of purchases, average deal, etc.
Factoring in the cost of running the program.
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Identifying the differences.
Figuring out how to improve the program.
Evaluating partner segments and sub-segments (geo, certification, partner type, etc.).
This allows you to recognize where the program is working and where it is not and for whom.
Finally, vendors need to create the tools and reporting to measure both program and partner
performance.
Best practice no. 3 – Create a better partner experience.
Ease of doing business remains a top concern for partners – and vendors are beginning to notice. By
creating consistent and simplified partner interactions, vendors can help promote a winning channel
strategy. Vendors should make it easy for partners to see where they stand, the status of their
relationship and should provide targeted content relevant to partners based upon their attributes and
core competencies. Placing value on partner experience makes vendors attractive to prospective
partners and promotes loyalty with their existing partner base.
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Partner portals are an opportunity for you to differentiate from competitors. It is vital that your portal
be easy-to-use, targeted, relevant and up-to-date. Think of your partner portal as the “gateway” to your
partner community and relationship – you always want to put your best foot forward, right? Partners
don’t have time to wade through pages of irrelevant data or content. They do, however respond
favorably to targeted, relevant information presented in an engaging environment that makes it easy for
them to conduct business.
Vendors – make sure you’re implementing these best practices:
1. Integrate robust MDF programs with through-partner marketing capabilities.
2. Implement a formal deal/opportunity registration program to protect partner deals, increase pipeline visibility and improve forecasting.
3. Align incentive and rewards programs at the partner organization and employee level and expand beyond training. Reward the partner organization sales team for various stages of deal registration – from creating the opportunity to closing the deal.
4. Enhance ease of doing business by providing partners with a 360 degree view into their progress, successes and statement. Include partner program benefit statements and financial statements in the partner portal so partners can see their benefits to date and potential benefits they can earn across all programs.
5. Communicate with partners through a customized registration microsite, featuring single sign-on and campaign specific landing pages.
6. Simplify and reduce time-to-payment by as much as 50 percent through online submission and management of project funding requests and claims.
7. Ensure your partners succeed by offering real-time, hands-on guidance from marketing experts.
8. Save administration time through unique, custom workflow configurations.
9. Enable partners to plan and adjust their businesses, and increase performance by instituting a formal partner profiling method. Vendors should introduce a partner business plan process and template, and consolidate business intelligence platforms and reporting. Integrate one business plan and measure goals against actual performance.
10. Provide incentives across the partner life-cycle and throughout the sales cycle. You can invest incentive dollars in multiple ways:
Marketing and lead generation activities.
Opportunities from qualified leads to closed deals.
Education, training and certification.
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Best practice no. 4 – Vendor-led marketing done right.
Many partners lack the skills to effectively plan and implement marketing programs, and managing MDF
or Co-op programs is an administrative burden for them. Often, this is due to their lack of pricing or
fulfillment experience, or resources for traditional or digital media engagements. Additionally, they may
not be aware that a vendor-led marketing program exists and that MDF funds are available to them.
Therefore, vendors need to provide an efficient and easy way for partners to market without requiring
them to be marketing experts. Provide partners access to a one-stop platform with pre-approved
marketing programs. One way to motivate usage is to provide MDF and Co-op funding to accelerate
partner adoption. MDF/Co-op is the most popular incentive program offered, yet many vendors are
dissatisfied with the application and result of these funds.
To eliminate hurdles for partners and improve MDF utilization, facilitate the entire process from start to
finish by incorporating the practices below:
1. Offer integrated, pre-packaged campaigns to optimize efficiency – complete with innovative new media offerings.
2. Integrate and sequence multiple campaigns throughout the year to consistently drive leads and awareness.
3. Provide an optional online concierge and a resource library to answer questions, support campaign deployments and collect performance feedback.
4. Conduct peer reviews in the selection process.
5. Fund programs by direct-deduct MDF/Co-op or credit cards – don't require further administration on their behalf as packages are pre-approved.
6. Provide flexibility, allowing partners to use vendor marketing services suppliers.
Co-marketing for partners can be as simple as ordering from a catalog. Simplicity will eliminate many of
the hurdles holding partners back from participating in the program. Partners should be able to simply
select campaigns, personalize with their logos and preview materials.
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Best Practice no. 5 – Create a PRM/CRM infrastructure that
supports a robust partner and program eco-structure.
A sound PRM/CRM infrastructure is essential to support your channel partner vision. If your current
PRM environment limits your ability to deploy the types of channel programs and tools you need, take a
look at these best practices to optimize your partner and program eco-structure.
1. Assess your current PRM environment in light of your channel program requirements. Define a future state PRM environment that is capable of supporting your channel program vision.
2. Identify gaps between your future state PRM environment and your current one.
3. Create an actionable roadmap of prioritized technology projects to bridge the gap between your current and future state PRM environments.
4. Extend the standard CRM data model to support a 360 degree view of your partners.
5. Ensure your partner portal provides a streamlined user experience, delivers profile-driven content and takes advantage of enterprise-class portal capabilities.
6. Integrate your technology platforms, eliminate data silos and enable single sign-on across your partner portal via a standards-based integration framework.
7. Provide global program templates that enable delivery of multiple channel programs with standardized tools and processes and that operate locally.
8. Make sure your channel program framework enables you to deliver program benefits to partners based on the value they provide.
9. Enable systematic measurement of partner value and effectiveness of programs.
Best Practice no. 6 – Build a great channel account management
team.
Today, vendors and partners face complexities with a dynamically changing marketplace, emerging
cloud business models and channel consolidation. While vendors rush to introduce new or enhanced
partner programs, an important aspect of channel enablement is often overlooked – the channel
account team. This group can have a tremendous impact on partner performance or it can be a wasted
resource that hardly pays for itself. It all depends on whether Channel Account Managers (CAMs) are
well trained and equipped with the tools to be a valuable resource to partners. When partners get the
help they need, they are more likely to drive leads and increase sales.
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Many vendors transfer account managers from direct sales to the CAM role. They consider sales skills to
be the most important skill set CAMs must possess. However, sales are only one skill set the CAM needs
in his or her tool bag. They must have business acumen and understand the partner’s business model to
gain credibility with their partners. They need excellent coaching and communication skills to strengthen
relationships so they can accomplish their goals with partners.
To build a great account team, vendors need to assess their CAMs skill set and implement a practical,
“hands on” training curriculum that brings the channel account management team’s training and
abilities to a consistent level of excellence. This requires a combination of face-to-face training
augmented with online training courses. The curriculum should be designed in a workshop format to
foster interaction and gain knowledge through interactive practice. Training topics should include:
Don’t forget to establish metrics to measure success in each of these areas and follow-up with a debrief.
Your debrief should include:
Post mortem review of training content and delivery.
Evaluation of training participants’ feedback.
Assessment of the need for online training refresher courses.
Summary
Best practices in the channel have more to do with earning trust and building the paths for you and your
channel partners to have successful relationships and a healthy ecosystem. By employing the six best
practices in this eBook you are strengthening your relationship in more ways than one. You are
ultimately:
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1. Showing that you care about your partners’ well-being in the channel and want to help them in a rapidly changing environment.
2. Getting partner feedback on programs and making decisions based on data analysis, not assumptions.
3. Fostering better relationships by opening lines of communication and showing transparency with your partners through an easy-to-use and efficient partner portal.
4. Aligning your partners’ profitability with your product/solutions success.
We hope these best practices help you evolve your channel strategy for happy and successful
relationships between you and your partners, producing partner advocates and advancement in your
channel program. If you have any questions about these practices or would like to set up a consultation
with one of our specialists, we’re ready to help. Simply email us at [email protected].
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Meet the A-Team Authors and Contributors
William Gilsing
William leads client engagements in channel strategy and channel program development efforts. He has
over 20-years’ experience working with technology clients on partner strategies and programs that
increase indirect sales and deliver maximum ROI on channel spend. His experience includes strategic
engagements with Microsoft, Symantec, Seagate, Skype, SAP, Cisco, Lexmark, and many others.
Prior to his consulting career, William held middle and senior management positions in marketing,
product marketing and merchandising with Egghead, Sharper Image, Duty Free Shoppers and GAP.
Sarah Foulkes
Sarah is a recent Washington State University graduate with two years of experience in marketing and
communication strategy. Sarah is well-versed in B2B and B2C integrated marketing practices. Since
joining hawkeye Channel, Sarah has worked closely with stakeholders on marketing campaigns, web site
content, digital and social media.
Follow Sarah on Twitter @sarahnfoulkes
For more information visit us at www.hawkeyechannel.com or email us at [email protected].