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]]>Key insights when thinking about partner agreements and negotiations
By T.C. Doyle
When building a channel program, prepare yourself for an inevitable question from one or more partners: “Are you willing to sign an exclusive deal?”
The question often pops up when you enter a new market and/or when a partner senses a unique sales opportunity that revolves around your product or service. It’s a conversation you should prepare for as you build your partner program, says channel program expert and Tenego Academy president and founder Donagh Kiernan.
Kiernan, a member of the Impartner Channel Chiefs Advisory Board (CCAB), advises clients on how to build partner programs and enable their channel personnel. He advises having conversations about exclusive deals when you begin developing agreements and negotiations for partner contracts*.
Why is pretty straightforward: “Exclusive agreements protect vendors and their partners from either party working with competition for a set period of time,” explains Kiernan. “Exclusivity affords partners the freedom to develop a market without having to worry about a competing reseller, and vendors the assurance that they have a dedicated sales ally who can provide access to a market, build a sales pipeline and speed their time to success.”
Exclusive deals offer both promises and challenges. No matter where you are in your partner-building journey, you’re going to have to consider them at some point. In this article, we examine the pros and cons of exclusive deals, a little business history for perspective, and questions you will want to ask before you move forward with any decisions.
Before we dive in deeper, please note: exclusive agreements don’t have to last forever or be to all or nothing propositions. Also, exclusive arrangement should always be vetted by veteran legal experts as exclusive deals are subject to different if not confusing local and national laws, in many instances.
Understanding Exclusivity
Understanding exclusivity starts with definitions. You can, for example, define “exclusive” in any way you wish. In general, exclusive deals involve granting a partner sole access to a market as defined by geography, product specialty, company type, customer segment, vertical niche, use case or more. You can also make your “exclusive” more specific, such as a list of named accounts. Again, laws vary from region-to-region, but you get the idea.
When carving up a market, specificity is the key. “Exclusive” can be as simple as a registered deal in a PRM, or as broad as a vertical market such as “government” or geography such as “the UK.” Regardless of what you choose, you will want any definition of “exclusive” to pass the McKinsey & Co. “MECE test.” A territory, sector or niche, for example, should be “mutually exclusive and collectively exhaustive.”
The pros exclusivity? There are many. An exclusive deal can provide you a knowledgeable partner who is dedicated to the success of your products or services. It can also provide instant access to a desired set of customers, plus a local presence and trusted ally in a region or vertical market that you alone don’t have great familiarity with.
On the downside, there are as several cons that may or may not influence your decision making. When you grant a partner an exclusive deal, for example, your sales priorities become subject to the agenda of another company. That may or not work for your organization or strategy. Similarly, your exclusive deal may mean that your sales opportunities are limited to a partner’s existing customer base or tied to its sales savvy. If you sell sophisticated goods and/or services, you become defined by your exclusive partner’s technical acumen or dedication to customer service.
There are also other considerations. Ask yourself: are you willing to grant exclusivity to a partner that represents one of your rivals? How would you respond if a high-performing exclusive partner wants to expand into another market where you already have existing partners? Would you extend its exclusivity? If so, how?
Given the pros and the cons of exclusivity, it’s not surprising that business history includes examples of success and failures of exclusive deals. Apple, for example, signed a deal that made communications giant AT&T the sole carrier for the then-new Apple iPhone. (The deal worked spectacularly.) But a previous exclusive deal involving Apple co-founder and former CEO Steve Jobs failed miserably. That deal, struck in the late 1980s, gave computer reseller Businessland exclusive rights to sell the NeXT computer to educators and students. It was just one of several missteps that doomed the device and, ultimately, the company.
Questions to Consider
If asked for exclusivity, you need to consider several questions before deciding. They include:
What to do when things go wrong is an especially important consideration. The problems you encounter with an exclusive deal could run the gamut from very firm (you partner gave business to a competitor) to more squishy (your partner took sides with an end-customer over a contract dispute). At any one time, the calculus of your deal could change when one or more of the following occurs:
If any of these developments occur, change is inevitable.
One last thing: don’t confuse fidelity with loyalty. You might be tempted to grant a partner exclusive rights to a market because of its pledge of fidelity to you. What might make better sense is to enlist the support of loyal partners that are equally capable and dedicated to customers’ success but may represent other brands.
For more thoughts on how best to build your partner program, but sure to check out our series on program building blocks, Channel 101*. In addition, see for yourself how partner automation can help increase your sales by a full third. Sign-up for your Impartner demo today.
Coming next in Part Seven: Partner Program Tiers and Supports Matrix
*The Channel 101 series was produced with insight and information provided by Tenego Academy. Tenego Academy is a Cork, Ireland-based company that provides support to companies wanting to grow their organizations with third-party “channel partners” be they dealers, agents, referral partners, distributors, consultants and more.
Tenego Academy’s 12-part “Build Your Partner Program Like a Global Leader” education program helps companies looking to create, grow and/or optimize a partner program regardless of their size or market focus. No matter where your company is in its channel partner program journey, you will benefit from Tenego Academy’s 12-part program, which covers everything from channel strategy to partner recruitment to automation and more.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].
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]]>From resellers to consultants, you have plenty of options when it comes to partners
If you’re a fan of the Annual Westminster Kennel Club Dog Show, you know that dogs come in all shapes and sizes.
The same is true for business partners, though even partners themselves would joke that some of the dogs are better groomed.
Looks notwithstanding, your channel partners can be your best friends in the market. They will steady your company in good times and bad, and provide your customers with satisfaction that you alone simply cannot provide at scale.
In part one of Honing Your Partner Proposition, we zeroed in on the basic components of building a channel. In this installment of the “Channel 101” series, we will focus on the different types of partners you will likely encounter, especially in the high tech, cybersecurity and fin-tech markets.
Once you identify and create the components of your basic partner program, you will want to consider creating specific requirements and rewards for different partner types. To do so, it helps to understand their businesses to a greater degree.*
Partners differentiate or categorize themselves in a variety of ways, including:
When you consider your total addressable market (TAM), you might be surprised to learn that there is a wide array of third-party organizations that may be suited to help you achieve your objectives. Here’s a sampling of different partner types, complete with an overview of what they do and why it makes sense for you to consider working with them.
Partner Types
Volume Resellers
High-volume partners are skilled in delivering innovation at scale. They often trade in multiple geographies and are very responsive to changing market dynamics buffeted by disruptive innovations, economic upheaval and changing customer buying habits.
For vendors, they offer existing relationships, sales competency, local influence if not presence and strong logistical capabilities.
On the downside, volume resellers are not always brand loyal or technically astute. Because they work in highly competitive environments, they often demand financial uplifts and marketing development funds.
Your best bet to connect with them: demonstrate your proactive sales and marketing prowess (so they don’t have to do that heavy lifting) and show them a way to achieve higher margins with the sale of your products and services.
VARs/Systems Integrators
For tech and other vendors, VARs and SIs are credible and influential sales and delivery partners.
They boast subject matter expertise (SME), vertical market knowledge and market reach. They are tight with mid-market customers and thrive in complex, multi-vendor environments.
What makes them difficult partners? It’s hard to secure their mind share. They have high employee turnover, long sales cycles and meager marketing resources if not capabilities. In many industries, they are experiencing significant financial upheaval as a result of digital transformation among their customers. They are looking for help transitioning to a new business model in many instances and are looking for organizations that can lead the way.
Your best appeal to these organizations, thus, is to showcase the additional service opportunities your innovation creates for them and your commitment to them regardless of what business model they latch onto.
Service Providers
Service providers thrive on repeatable business, long-term contracts and project-based fees.
Their strengths: longstanding ties to customers, and/or legal regulatory incumbency. Though they may be lumbering, they have scale and outsized influence in many markets. They also have honed businesses and can thrive in low-margin conditions.
Their weaknesses are they are challenged by stiff competitors including outsourcers. They are sometimes slow to react to disruptive innovation and have limited partnering experience in many instances.
What they want is upsell opportunities, new service offerings and scalable pricing.
In some instances, they also want to be treated as customers, not partners, which can muddle your contractual relationships with these companies.
The key to working with these organizations is understanding their business models and intersecting with their existing workstreams.
Sales Agents
In many industries, such as insurance, Real Estate and telecommunications, sales agents are ubiquitous. They are sales and transaction-oriented, and motivated by commissions and fees. More and more, they are very eager to embrace recurring revenue sales models that reward them over time.
Sales agents boast close ties to customers and an ability to close transactions. Because of their ubiquity, they often give vendors unrivaled geographical reach.
On the downside, they are often short-term focused and brand agnostic. In some fields, they are technical wizards while in others they are outmatched by specialty resellers.
Sales agents want clearly defined programs, leads and proven compensation models that pay out over time. And they expect and prefer that a vendor handle billing, support and more.
Consultants
Consultants are driven by business relationships and service projects. Historically, they have lived off billable hours and project-based fees though their business models are changing. Many now prefer service level agreements (SLAs) or contracts that reward them for improving business outcomes.
On the plus side, they have influence with decision makers and subject matter expertise. On the downside, they typically have their own agenda, do not make the bulk of their money on the sale of goods and services, and may prefer a level of independence you might find uncomfortable.
What they want most is anything that they can turn into a service opportunity. They also want referral revenue.
Managing these relationships requires significant effort. And your return on investment (ROI) can be difficult to quantify. But their access to key decision makers can be very appealing.
Distributors
Think of distributors as the middleman’s middleman. They are responsible for providing the products and services that vendors develop. Everything they do they do it at scale. They are known for the breadth and depth of their relationships.
Their strengths include existing reseller networks, support sophistication, proactive marketing and sales support.
Their weaknesses include challenging finances, outmoded business models and a lack of sales sophistication for more advanced ideas and innovations.
Your best option for winning them over is showing them sales momentum, complementary relationships and/or helping them launch into market adjacencies.
One thing to note: they require significant attention (think cash) to get their internal salespeople interested in your offerings. Once you sign up a distributor, in other words, your journey just beginning, not ending.
ISVs
In many industries, these are specialized developers of digital products and services sold commercially or embedded into other products.
ISVs are driven by the sale of their products and the retention of users. They are also keen on aligning with those who can pair up to create new combinations of value.
For third-party vendors, ISVs offer their own marketing and sales mechanisms, and additional lift for your products and services. On the downside, they can be slow to decide on anything and they get territorial if your “complementary” products and services compete with anything they offer now or plan to do so in the future.
What they seek is anything that can help make their own product more useful or “sticky” with a customer.
Trade Associations
Professional associations may not be the first partner type or organization that comes to your mind when thinking about partners, but they should be considered, nonetheless.
Trade and professional associations range in size from the American Medical Association (AMA) to the local Kiwanis Club. Organizations like these live to provide value to members and to raise awareness of their industry, market and/or cause.
They generate revenue from member dues, event attendance fees and more.
Why are they a possible partner? Well, consider their strengths. They are in regular contact with decision makers, provide invaluable insights and networking opportunities, and attract a consistent following.
Weaknesses? As a rule, they generally do not sell on behalf of vendors, and they often lack a formal mechanism for translating influence into action.
What motivates them? They want research, new members and sponsorships for ongoing activities.
Working with them takes some effort. But the returns can be enormous in terms of awareness and influence building.
Final Thoughts
Finally, it’s worth spending a moment on what Tenego Academy* calls model alignment.
After gaining traction with partners, you might learn that you could do more business through partners if you change or alter your deliverable in some fashion. The change could be in how you sell your technology, to whom and for how much.
You might learn, for example, that your ideas or innovations are too expensive compared to your competition. You might discover that there is insufficient add-on revenue opportunity associated with the sale of your product or service. You might also learn that third parties consider you difficult to work with.
All of this is perfectly natural and to be expected. Relax, in other words: you got this.
After thinking through your partner value proposition, make sure you don’t let that good work go to waste by under-investing in partner automation. It is worth repeating: The products and services you provide the market are only a portion of what partners evaluate when considering your value proposition. They also take into account your onboarding, marketing support, training and more — the kind made possible by world-class automation. For more insight, sign up for an Impartner demo today.
Coming next in Part Six: Partner Agreements and Negotiations
*The Channel 101 series was produced with insight and information provided by Tenego Academy. Tenego Academy is a Cork, Ireland-based company that provides support to companies wanting to grow their organizations with third-party “channel partners” be they dealers, agents, referral partners, distributors, consultants and more.
Tenego Academy’s 12-part “Build Your Partner Program Like a Global Leader” education program helps companies looking to create, grow and/or optimize a partner program regardless of their size or market focus. No matter where your company is in its channel partner program journey, you will benefit from Tenego Academy’s 12-part program, which covers everything from channel strategy to partner recruitment to automation and more.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].
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]]>The fourth installment in the Channel 101 series offers insights on basic program components*
Question: Why would anyone want to partner with you?
If you think that’s impertinent, then chances are you haven’t thought through everything that is required to build a successful partner program. Whether you’re new to channels or struggling to make them work, you’re going to have to hone your partner value proposition. It’s nothing less than the raison d’etre of your entire program.
Put bluntly, you partner value proposition is the sum total of all the reasons why partners will want to align with your company. It includes the economics of partnership (as in how partners will make money with your company and what it will cost them to align with you), what kind of support you provide (both technical and marketing), how you stack up against the competition, how you fit with other vendors partners represent in the market and much, much more.
In this, our fourth installment of the “Channel 101” series, we zero in on the basic components of your partner value proposition. As a quick recap, we previously provided an overview of different partners, program requirements and more. Now it’s time to focus inwardly on the basic program components.
(Note: A complete partner value proposition includes more than an analysis of program components; in our next installment we will examine another aspect, different partner types and their needs.)
Your Partner Value Proposition: Basic Program Components
Let’s come back to the central question: why would anyone want to do business with your company? If you break it down, your answer will likely include a mix of the following elements:
Below, we break each of these down a bit more. One thing to note: partners of different maturity demand and/or need different things from your organization. New companies that come into your world will likely need more technical and sales support whereas partners more versed in your products and services will likely want more marketing support and/or opportunities to build on top of your innovations.
The Innovativeness of Your Solution
Chances are your solution solves one or more end-customer challenges. It might enable them to generate new revenue or better serve their own customers. In all likelihood, you have developed a sound customer value proposition. You’ll need the same for partners. Why is fairly obvious.
Suppose your product solves a challenge that undermines a revenue stream that would-be partners rely on? Good luck trying to get them to partner with you. What you must do is concisely tease out what business problem or market opportunity your idea addresses for partners. You must also look at how your idea is “packaged.” Some ideas, for example, cannot be packaged in way that they can be sold or supported by a third party. If that’s true with you, then partner recruitment is going to be a challenge.
Once you have a defined understanding of what problem your idea addresses, then you’re halfway there. Now you must think in terms of more mature partners who will likely want more detailed information about niche use cases and/or vertical market applicability.
The Economic Opportunity Your Product or Service Provides
Sell a widget, make a buck. That’s the basic reward model for many ideas sold though partners today. But it’s only a fraction of the economic reason why a third party would align with you.
In addition to immediate financial rewards, partners are looking to align with companies that help them create new business practices and/or revenue streams. They are also looking for those that create opportunities for them to sell additional services.
What attracts potential partners most is the total economic value that surrounds your offerings. In the tech world, many software vendors invite third parties to join their partner programs because they can demonstrate that for every $1 worth of their technology sold, there are an additional $4-$9s worth of additional services generated for partners. That’s a compelling proposition.
While that economic opportunity doesn’t exist for every industry, you’ll benefit from doing the math on what economic opportunity your ideas generate.
One additional thought: As your partner program matures, your financial incentives and rewards will have to be better thought out. You’ll want to keep things simple but must figure out how to reward different activities and behaviors. You’ll also have to figure out how to reward different levels of contribution, which will likely stimulate you to consider adding tiers and other adjuncts to your program.
Your Distinct Customer Acquisition Process
In addition to knowing how your ideas solve buyer problems, partners want to understand how your organization targets customers. The steps you take to educate the market, to position your ideas and even whom you target are key considerations for potential partners.
Critically, it is important to understand how your buyer’s journey meshes with your go-to-market activities with partners. In days of old, third-party dealers, consultants and more played a significant role in helping steer customers to your brand. Now Google and other influencers play a role. Today, most of a buyer’s journey is nearly done before end customers ever connect with one of your partners. This has significant ramifications in terms of how you educate, motivate, support and reward partners.
When thinking about the distinct customer journeys you create, you must factor in where partners fit into the mix. What stage do partners naturally fall in? And are your policies and programs aligned accordingly to yield the maximum from their input and support?
When your program is more advanced you will likely need to consider additional tools and means for generating demand. At some stage, you might turn to partner events. At the very least, you will need to think in terms of community and ecosystem building.
The Level and Type of Marketing and Sales Support You Provide
Ever been excited to attend an event because of the guest list only to arrive and find the food is lousy? If so, chances are the experience was less than what you hoped for.
That’s not unlike what happens in the partner world when a vendor comes to fore with a creative innovation and a lot of brand awareness but will no support for partners. The net result is the same: dissatisfaction all around.
To be successful with partners, you must provide them with comprehensive marketing and technical support. Don’t skimp.
When it comes to sales, early-stage partners will need help with basic questions so budget appropriately (read: disproportionately) for pre-sales support. And pony up for post-sales support, too. Remember: partners don’t have access to your engineering department the way that your direct sales team does, so make sure they are supported adequately.
When it comes to marketing, make sure they have everything they need to faithfully position, price, configure and sell your idea. They will need Powerpoints, sales scripts and more.
One final thought: share liberally. Some companies prefer not to share competitive information with partners because they fear it will fall into the wrong hands. Bad idea. Give partners the same access to tools and information that you provide your internal sales teams.
After getting established, you will need to think in terms of PR, success stories and, most importantly, leads. (We will address lead generation in another installment but just note that it requires an investment in automation.)
Your Commitment to Customer Success
This bucket covers a lot so we will focus on one aspect that matters regardless of what product, service or idea you provide. This is how committed you are to your partners’ customers’ success. In far too many instances, this is an afterthought. But it shouldn’t be.
Prepare yourself to work cooperatively to measure end customer satisfaction, not as a way to identify under-performing partners, which is something you should absolutely do, but more as a method to ensure that the people or entities actually using your ideas are as satisfied as they could be. Doing so sets you up for continued success, be it subscription renewals, upsell and cross-sell opportunities or more.
If your ideas are complex, then you must commit to seeing delivery through partners to the very end. Not all organizations do this. Some expect partners to handle everything once they step into a buyer’s sales cycle. This is a mistake for several reasons. It cuts your company off from important feedback and insights that customers will share based on their experiences, and it abstracts actionable steps that you could take to make things better.
One final thought: Whatever you to do with regards to customer success, make sure you do it in coordination with your partners. Do not let the final step in a long process unravel everything because a policy or bad practice ruins an otherwise solid relationship.
What do we mean? Think warranty claims, returns and more. Oftentimes, unrealistic demands on the part of idea originators spoil an otherwise healthy relationship. Be fair to the bitter end: your partners will appreciate it.
Final Thoughts
After thinking through basic program components, it’s worth spending a moment on what Tenego Academy* calls model alignment.
After gaining traction in your market, you might learn that you could do more business through partners if you change your approach in some fashion. The change could be how you sell your technology, to whom and for how much.
You might learn, for example, that your ideas or innovations are too expensive compared to your competition. You might discover that there is insufficient add-on revenue opportunity associated with the sale of your product or service. You might also learn that third parties consider you difficult to work with.
All of this is perfectly natural and to be expected. Relax, in other words: you got this.
After thinking through basic components, make sure you don’t let that good work go to waste by under-investing in partner automation. It is worth repeating: The products and services you provide the market are only a portion of what partners evaluate when considering your value proposition. They also take into account your onboarding, marketing support, training and more — the kind made possible by world-class automation. For more insight, sign up for an Impartner demo today.
Coming next in Part Five: How to Hone a Value Proposition That Appeals to Different Partner Types
*The Channel 101 series was produced with insight and information provided by Tenego Academy. Tenego Academy is a Cork, Ireland-based company that provides support to companies wanting to grow their organizations with third-party “channel partners” be they dealers, agents, referral partners, distributors, consultants and more.
Tenego Academy’s 12-part “Build Your Partner Program Like a Global Leader” education program helps companies looking to create, grow and/or optimize a partner program regardless of their size or market focus. No matter where your company is in its channel partner program journey, you will benefit from Tenego Academy’s 12-part program, which covers everything from channel strategy to partner recruitment to automation and more.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].
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]]>The post Your Partner Strategy: Partner Types, Requirements and Criteria Review appeared first on Impartner PRM.
]]>The third installment in the Channel 101 series provides answers to get you moving
By T.C. Doyle
Congratulations on your decision to grow your business with partners. Choosing a leveraged sales model will almost certainly give your business some additional strength. But it requires significant effort to make the most of the leverage that partners can provide.
In the first two installments of the “Channel 101” series, we introduced the concepts of basic channel building in the tech industry. This includes the types of programs you can build, and the best ways to leverage current partners that may have come into your world. Now it’s time to get more serious and start thinking about the ideal partners for you.
In this installment, we examine ways to help you better understand the types of business partners that exist today, the ones that are best suited to your business, and the best ways to attract their interest.
“Determining the right type of partners that make the most sense for your business is a core step in building the ideal partner program,” says Donagh Kiernan, founder and CEO of Tenego Academy, a training and channel team support company that helps tech vendors build effective channel programs.
Understanding Company Types Before You Begin Your Evaluation
If you have a product or service to sell, you’re probably thinking first and foremost about recruiting reselling partners who can introduce you to new business. Building a successful partner program, however, requires more than signing up as many of these types of partners as possible. A better plan is to think in terms of your partner community as an ecosystem that thrives in the right conditions and survives in the most challenging ones.
Where to start? Begin by thinking in terms of the roles that you need third-parties to help with as you go to market. This includes:
While many partners provide all of these capabilities, very few are good in all areas. Rather than exhaust significant energy trying to cultivate ties to the ones in your market that excel in each area, you are better off recruiting partners that are best in class in one area or more. This way, you can ensure that you are covering all your end customers’ needs in given market.
There are many pluses to this approach. But it does require that you take the time to identify the company types that participate in your market, and the specific skills your product requires. There may be more that you think, including all the company types from your target customers’ point-of-view:
Even if you do not choose to work with all of these company types directly, you should at least understand the role and significance they play in your chosen field. Some, for example, generate their own sales leads, while others prefer not to get entangled in the implementation of services, just the closing of transactions. Other partner types are just the opposite.
Key to understanding how each partner works is how value flows in your ecosystem. If you understand how each partner makes money, then it becomes much easier to determine if they might be a fit for your business.
Another consideration: nomenclature. Not every vendor — or partner for that matter — agrees on basic terms and monikers for various partner companies. An integrator in one part of the world or tech market, for example, can be a system house or service provider in another part. For a better understanding, learn what each partner does. This is a better indicator of who they are and what they might be able to do for you.
Also: within each partner category, there may be more than one partner type. In the broad area of “sales partners,” for example, there are referral partners, resellers, affiliates, agents and distributors. This sounds more complicated than it is. Keep an eye on what partners do and how they make their money and you’ll better understand the market dynamics that will likely take shape within your ecosystem.
Selecting Company Types for Evaluation
Once you’ve taken the time to understand your options, then it’s time to make some partner selections. There a dizzying number of ways to go about this. But the best efforts are based in some basic data. Remember: partnering can be personal, but it shouldn’t be emotional. Data and facts will point you toward partners that are best positioned to help you achieve your objectives, not sentiment and gut feelings.
To that end, build a scoresheet for each partner type and match it against your objectives. Your scoresheet should start with a high-level list of criteria for completing a sale — everything from lead generation to implementation to valued-added post-sale services. It should also include a section for scoring additional capabilities that you might need including specialized knowledge and focus, customer influence, ease of doing business, time-to-engagement and deal velocity.
After you have completed with this exercise, you should arrive at the point where you determine who or what fits you “target partner profile.” Having one or more target partner profile galvanizes your sales team, your channel managers and more. It helps everyone connected to partnering within your company understand your mission and objectives. It just makes life easier, Kiernan says.
One tip: don’t create overly short target partner profiles. If your product or service complements Microsoft’s Dynamics software platform, then do not assume that all existing Microsoft Dynamics partners are ideal for your company. There are 10,000 of them, after all! Evaluating whether each one is suited to your company could take months if not years.
A better approach? Develop a target partner profile with specifics based on your sales objectives and technological needs. This way you will quickly be able to exclude those that do not align with your target customer segment, market specialty or even business model.
Armed with more information about which types of partners to choose, it’s now time to focus on one more internal task. This is honing you partner value proposition. While it might feel more intuitive to devise this before your consider any other aspect of building your partner program, experience has shown you cannot do it in a vacuum. Going through the exercise above, as well as the others examined in the Channel 101 series, sets your company up for better success.
Lastly, don’t forget to start thinking about automation. The products and services you provide the market are only a portion of what partners evaluate when considering your value proposition. They also take into account your onboarding, marketing support, training and more. World class experiences demand world-class automation, the kind that Impartner provides. For more insight, sign up for an Impartner demo today.
Coming next in Part Four: Honing Your Partner Proposition
*The Channel 101 series was produced with insight and information provided by Tenego Academy. Tenego Academy is a Cork, Ireland-based company that provides support to companies wanting to grow their organizations with third-party “channel partners” be they dealers, agents, referral partners, distributors, consultants and more.
Tenego Academy’s 12-part “Build Your Partner Program Like a Global Leader” education program helps companies looking to create, grow and/or optimize a partner program regardless of their size or market focus. No matter where your company is in its channel partner program journey, you will benefit from Tenego Academy’s 12-part program, which covers everything from channel strategy to partner recruitment to automation and more.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].
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]]>The second installment in the Channel 101 series provides answers to get you moving
How do you work with partners?
It sounds like a simple question but it isn’t. Successful partnering today demands exacting answers. This is especially true of partner enablement, management and prioritization.
Here are some questions and answers that will help you get up to speed and rack up wins quickly to help build momentum.
Partner Enablement Basics
What kind of onboarding do you provide partners? Does your organization, for example, insist on training for everything right away?
If you’re new to partnering, prep for this question early in your “partner program-building journey.” Here’s why.
Traditionally, vendors, especially tech vendors, demanded that channel partners complete exhaustive training before representing their products and/or services to customers. But this “bootcamp” training is falling out of favor as vendors embrace new thinking that is based on recent research and more evolved tech solutions.
Studies show that learners absorb more when they have an opportunity to apply early learnings and then get feedback on their initial efforts. Hands-on or active learning, thus, is becoming more common in business, including tech channels.
To get started with new partners, think in terms of basic tech training, solutions selling and customer experiences. You need to show new partners how to evaluate whether their existing customers are good fits for your products or services, for example. Partners will also need to know the basics of how to position your innovations, qualify leads, present and demos products, provide competitive bids and, finally, close new business.
Afterwards, it is time for partners to put these lessons to the test by engaging with customers in real-world settings. This is the time for you to monitor, support and assess early results. If engagements go smoothly, then partners are likely ready for additional “layers” of training and support that exposes them to more sophisticated sales techniques, marketing concepts and technological concepts. If not, you will need to reassess where your programs, training or products are coming up short.
Remember: the fault could lie with you, your partners or both. If multiple partners are stumbling for the same reason, for example, the problem likely lies within your own four walls. Don’t ignore informative results, in other words — even if the truth hurts.
Partner Management Basics
Once I get partners selling on my behalf, how can I manage them?
Once you get partners moving, it’s then time to guide them where you want them to go. Managing their journey with your company requires some foresight — not to mention automation (more on that below). For example, you will need to map out the following for your partners:
For larger or more sophisticated partners, you will want to develop partner business plans that are developed jointly and managed regularly. In addition to basic enablement, vendors and service providers must take pains to not overlook the tactical things that help make engagements successful. This includes developing marketing materials including:
Then, there are sales materials that cover everything from slide decks to sales pitches, call scripts, objection handling tips and even references.
One thing that has become increasingly important in software markets is modern contracts. These must be thoroughly conceived and road-tested to ensure fairness, repeatability and scalability.
Before unleashing these items on your entire partner ecosystem, road test them with a select few organizations. Think of this period as your “pre-mortem” during which you can identify roadblocks. If you treat this step seriously, you will eliminate a number of issues that could frustrate partners in the future. This includes helping partners understand your technology’s shortcomings or competitive weaknesses.
In most instances, you should address your shortcomings with select partners so they are prepared to best represent you in the market. Companies struggle with this decision, but experience has shown that partners appreciate candor. When treated professionally, partners respond in kind and work collaboratively with a vendor to overcome issues.
Prioritizing Partners
How should I prioritize partners?
Most companies invest in partners based on hope and intuition. But there are better ways to assess potential. This includes the level of enthusiasm a partner demonstrates as measured by the number of people they send to your training, the level of activity they have with your brand and the number of accounts they introduce to your organization. Other factors to consider include their skill level, competitive position in the market and ability to complement what your organization does to promote itself. This is especially true when it comes to generating leads on your behalf.
When assessing a partner, consider: Do your marketing activities mesh with their own? Do they conflict or, worse, compete? Finally, consider your partners’ soft skills and even their ethics. Do they offer award-winning service? Do employees like working there? And do customers rate their services highly?
These things and more must be considered.
You should also take note of the competitive products partners represent in the market and whether individual partners have the wherewithal and commitment required to represent more than one brand in each category.
Finally, you should identify bottlenecks that individual partners might have when it comes to building a practice around your technology. Some partners, after all, excel at sales but are weak at implementation. Most have just the opposite problem. By taking the time to understand the strengths and weaknesses of as many partners as possible, you can better assess which ones you will be successful with.
Even in the best of circumstances, however, expect problems to arise. Partners may present your products or services poorly. They may seem too busy with other vendors. And they may fumble with leads provided to them by your team.
These and other problems could be symptomatic of a broader problem: you are simply not a priority to some partners. That you will have to address when developing your partner value proposition, which we will cover in an upcoming Channel 101 article.
Consider the above steps for now. And don’t forget to start thinking about automation (we said we’d come back to it). The products and services you provide to partners are only a portion of what they expect from you. They also expect work class experiences when it comes to onboarding, marketing support, training and more. World class experiences demand world-class automation. For more insight, sign up for an Impartner demo today.
Coming next in Part Three: Partnering Strategy and Partner-Type Selection.
*The Channel 101 series was produced with insight and information provided by Tenego Academy. Tenego Academy is a Cork, Ireland-based company that provides support to companies wanting to grow their organizations with third-party “channel partners” be they dealers, agents, referral partners, distributors, consultants and more.
Tenego Academy’s 12-part “Build Your Partner Program Like a Global Leader” education program helps companies looking to create, grow and/or optimize a partner program regardless of their size or market focus. No matter where your company is in its channel partner program journey, you will benefit from Tenego Academy’s 12-part program, which covers everything from channel strategy to partner recruitment to automation and more.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].
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]]>By T.C. Doyle
“Grow” may be a goal but it is no strategy.
Differentiating between the two is just one of the many things you need to understand as you begin to build your channel. In addition, you will need to learn the basics of compelling partner propositions, channel economics and partner program building blocks. Before you get to these, however, it helps to look inward at your existing organization, specifically to your company’s culture. Believe it or not, culture will play a significant role in determining whether your organization can succeed with partners. Here’s why.
Know Thyself
If your culture is hyper-competitive, controlling and/or embraces a winner-take-all ideal, for example, then it is unlikely that you will win many fans in the channel. You will need to share the fruits of your efforts more when you rely on partners, after all. You will also have to share your best insights and your expertise to those whom you barely know.
As unsettling as that may be, it’s true just the same. Likewise, you cannot expect to thrive in the channel if your company is punitive or uncollaborative. Channel partners often represent several brands and may recommend one of your rivals over your products or services in certain situations. If you retaliate unfairly, you’ll likely develop a reputation for being hostile.
Similarly, if you’re overly rigid or difficult to work with, some partners will call you out for it quickly. Others will simply walk away. If customers today find your company difficult to engage, don’t expect partners to find it an easier unless you adjust.
When you begin on your channel journey, it helps to do so with a proper attitude and commitment.
Hone Your Partner Proposition
The No. 1 reason channel companies will work with you is the quality of your partner proposition. If the quality of your proposition is high, partners will take your certification courses, represent your brand faithfully and treat leads with great respect. They will also share information, competitive insights and profits willingly.
If your proposition is weak, partners won’t respond. If you cannot fathom why they would sacrifice time and energy to do business with you, in other words, don’t expect them to do so.
To better understand how compelling your partner proposition is, consider your current sales process. It typically starts with your product or service, then passes through several stages including lead generation, opportunity, sales, delivery, client success and, finally, after-sale services.
As you build your partner program, you need to understand where partners can help reduce your bottlenecks in your go-to-market strategy. Performing this exercise will help you craft a differentiated partner value proposition. It will also help you understand the different types and numbers of partners you need.
Finally, persuade your executive management team to ask itself one difficult question: does it view partnering as a cost or an investment? The answer will help you, a channel practitioner, better understand your organization’s commitment, expectation and understanding of doing business with partners.
Understanding Partner Economics
If you sell directly, chances are you understand your business economics. You know, for example, your costs when it comes to generating and qualifying leads, making presentations and demonstrations, and crafting evaluations and proposals. You know key metrics as well, including the number of leads you need to close a new customer.
But for partners? The math can get fuzzy. Understanding partnering economics, thus, is vitally important.
In a direct model, of course, a vendor or innovator incurs upfront sales costs (personnel, automation, campaigns, etc.) and risk. As a result, every new piece of business takes money from a vendor’s bottom line.
With partners, who already enjoy ongoing relationships with customers, a portion of sales costs are reduced. This is because partners leverage existing relationships and other sunk investments such as sales training, marketing know-how and more.
That said, partnering comes with its own set of costs. This includes the cost to train, manage and recruit partners. Then there’s the cost of commissions and other forms of rewards.
In general, doing business through partners can be more cost effective. But as the saying goes, your mileage may vary.
Creating Your Partner Roadmap
Start by listing your priorities, be they growth, market expansion, customer satisfaction or even company valuation. Next, map your total addressable market (TAM) to the number and type of partners you believe you need to achieve your objectives. After, assess your readiness, including the strength of your partner proposition and your competitive positing. Finally, take a look at your messaging: would it appeal to you if you were a partner, or would it miss the mark?
Taking these steps will help you determine if you have the right type of partners, whether you need more and whether your expectations are in line with reality.
Finally, start thinking about the automation your company will need to manage, enable and reward your partners. Capable programs do not run on spreadsheets in 2021.
Additional Steps
In the blogs that follow, you will learn more channel basics, including assessing partner readiness, developing effective policies and processes, and addressing specific challenges that arise in early stage program development.
Up next in Blog Two: Supporting Current Partners.
*The Channel 101 series was produced with insight and information provided by Tenego Academy. Tenego Academy is a Cork, Ireland-based company that provides support to companies wanting to grow their organizations with third-party “channel partners” be they dealers, agents, referral partners, distributors, consultants and more.
Tenego Academy’s 12-part “Build Your Partner Program Like a Global Leader” education program helps companies looking to create, grow and/or optimize a partner program regardless of their size or market focus. No matter where your company is in its channel partner program journey, you will benefit from Tenego Academy’s 12-part program, which covers everything from channel strategy to partner recruitment to automation and more.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].
The post Partner Program Guiding Decisions Policies and Culture: Guidance on Your Critical Decisions appeared first on Impartner PRM.
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