In the channel, the partnership between vendor, partner and customer is critical. However, everybody has a different idea of what constitutes a successful relationship. What does partner success look like? Each stakeholder will have their own idea of how they define a healthy and profitable partnership, based on their own specific parameters.
Understanding and defining what partner success looks like for the different players is something with which vendors continue to struggle. Particularly with the explosion of new partner types supporting different business models. A common example is renewals; both the vendor and partner might believe they own that process with the customer. This can lead to conflict, which can damage both of their relationships, in the eyes of the customer.
Indeed, 2020 research from Kaspersky suggested that vendors and partners aren’t as close as they could (or should) be. Here 65% of partners wished the relationship with their vendor was better. On partners’ wish lists were vendors that could demonstrate a strong understanding of the industry that partners are operating in, are easy to do business with, offer excellent customer support, and provide the opportunity to establish strong relationships with the vendor’s key contacts.
In their initial rush to sign up channel partners, vendors rarely consider the success criteria for their partnerships. But it is important that vendors, partners and customers all agree on what success looks like in their relationship. Indeed, that definition of success can vary based on job function or skills set within those companies. You therefore must consider what success means to those different stakeholders.
For example, for channel sales, success is often measured in terms of revenue, or leads that they can pursue, or a healthy commission structure. However, channel marketers might judge it on the quality and quantity of content available to them, their ease-of-access to that content and what marketing development funds (MDF) are offered to orchestrate their campaigns. At the same time, operations managers want to get the channel enabled as quickly and seamlessly as possible, in a first or low touch environment. Elsewhere, channel program managers want to get their programs out quickly, effectively, and uniformly to the channel.
It is interesting too, to consider, how the vendor C-suite perceives a successful partner relationship. This is particularly relevant if they have both direct and indirect sales strategies. A long-held point of conflict for channel partners if they feel the vendor places more value on direct sales operations.
An interesting development, however, is that in this new ‘ecosystem-based’ channel, the needs of partners are changing. We are seeing partners become more sophisticated and selective as to which vendors they now work with. As per the Kaspersky research, partners are primarily interested in the ease of doing business with a vendor and the support they receive in bringing their solutions to market. Everything else supports these two things.
It is therefore critical that the C-suite considers how they view partner success, and what measurements they want shared as proof, and how often. They need to see and understand those partners that commit and understand the relationship as being mutually beneficial to both sides.
Part of this is ‘partner levelling’. In practical terms, vendors must be able to determine which partners are generating the highest revenue for them. This is where the Pareto principle comes into play, where 20 percent of a vendor’s top partners generate 80 percent of their revenue.
It is up to the vendor to ensure those partners have every resource they need to help keep them there. However, that doesn’t mean the other 80 percent of partners aren’t important. It just makes sense to focus on their high energy, high value partners, while steering the remainder through distribution if they have a two-tier sales model, or enable them to self-serve through the partner portal.
It is, nevertheless, a balancing act. It’s just as important that channel managers can identify which partners will be the next star performers based on either revenue or profitability.
Incentives are also a big part of driving success behaviors. Vendors need to apply incentives and promotions to align with the needs of their partners. But instead of implementing a one-size-fits-all approach to incentives, vendors should first define what success looks like to different partners and different stakeholders. This makes it easier to offer the right incentive, to the right partner, at the right time. Be it a SPIF, a points-based offering or a rebate, each of those incentives has a different impact on behavior.
Forrester analyst, Jay McBain notes the struggle that vendors have trying to fit the new breed of partners – non-transacting partners such as referral partners or influencers – into traditional tiered partner programs. “What we’re learning now is they’re maybe not bad partners, you just didn’t have them in the right kind of program”.
More than anything there needs to be a mutually agreed definition of success. This helps to eliminate friction and can be the starting point for the vendor, partner and customer to begin working together to achieve their individual goals.
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