My last post provided some commentary on an excellent presentation on Partner Lifecycle Management, by Chris Dogget, Vice President of Global Channels at Sophos. That presentation was given at the Channel Management Summit held earlier this summer in San Jose. The point of the accolades in the last post were to recognize Chris for providing a formal approach around a subject that could be holy grail of getting more effectiveness from your channel partners while benefiting from greater efficiency from your human and financial resources—something we’re all short on these days.
I have always thought this was an area of untapped potential, and perhaps Chris was the first one to come forward with a sound, quantitative process for meeting this challenge. (For more information on the benefits of a formal partner lifecycle management process, and Chris’ approach in specific, do take the time to review the last post on the subject.) Channel models are changing so fast that the survival of the fittest has never been more true….and frankly, I think the rate of change is going to increase exponentially, meaning the need for employing an approach of your own is going to grow. The days of “the more the merrier” as a foundation for a channel strategy is quickly drawing to an end.
To create a similar approach on your own, one first must subscribe to these principles:
Partners are mapped on a quadrant that plots your investment (x axis) with their revenue (y axis) with changes in each tracked over time. Further, ALL partners will start out somewhere in the lower left hand portion of the quadrant ($ 0 revenue and $0 of investment, or near so). Any changes to any one partner’s position on the map should be monitored at least annually, if not on a quarterly basis. Ideally, partners would proceed on something that may resemble a 45-degree line to the upper right hand quadrant.
Investment considers both real cost and resource allocation to cover both partner readiness and joint marketing activities with the understanding that partners must also be committed to investment of both time and resources on their end.
It assumes (correctly) that all channel partners will reach a point of diminishing return wherein additional investment will no longer yield proportionate sales gains. Once they do, they are considered maturepartners (upper left hand quadrant), and emphasis is directed to a maintenance mode with less aggressive investment levels. Other categories on this quadrant would also include those partners identified as At-Risk(lower right), Growth (upper right– or the “magic quadrant”), and Emerging (where all partners start, the lower left quadrant as stated earlier).
Investment on those Emerging partners in the lower left is really focused in the area of partner enablement—rather than joint sales.
Other components that are equally important to this process include:
Partners should be segmented by go-to-market categories and potential—not simply sales volume–as a basis for establishing “Silver”, “Gold” and “Platinum” tiers.
Potential is really a score that can consist of multiple dimensions relative to how you—and your partners– do business. Criteria can include, but is not limited to, rate of sales increase, % opportunities closed, Gross Margin %, sales team enablement, attainment of stated business objectives, etc. These metrics should be identified by channel segment—although some may apply to the partner population overall. Any changes in these metrics over time can be leading indicators that an individual partner is still on the growth path, or are nearing their point of diminishing return.
Business planning is conducted annually, and quarterly marketing plans are completed—or reviewed—quarterly, and consider each of the key metrics that are used to evaluate potential as described above.
Hmmm, this all seemed some so straightforward when Chris presented it… In any case, his model would need to be modified to adapt to your business model. So, hopefully enough of the concept was conveyed between the two postings for you to develop your own partner lifecycle management model. If you need help, give me a call or send an email—I’ll try and fill in the blanks.