Okay, time for a gut check. Do you really know your channel partners? A lot of us might be quick to answer “Yes” or at least “I think so.” But do you really ‘know’ them in the ways that are most relevant to your success?
Every time your team cuts an MDF check for a partner, you’re placing a bet…a bet that this investment will pay off more than if your company invests that money elsewhere. In Vegas, the best poker players excel at collecting and assessing all the data available to them in deciding their next move.
Proactive partner investment is no different. Especially in the today’s business climate, making the right MDF investment to help the right partners prepare to grow your market share is critical. In figuring this out, it’s essential to:
- Validate what these partners are telling you about themselves. In the quest for money and CAM attention, partners have a way of ‘bluffing’ by flashing only their ‘best’ colors, while often concealing their limitations.
- Properly analyze what your systems are telling you about them. Many of the traditional quantitative metrics – like past revenue performance- can no longer predict a partner’s growth capability, or ability to sell in a cloud environment.
Why is this so important now?
With all the flux in technology these days, we see almost every tech and telecom company increasing their use of ‘discretionary’ spending to spur market growth and attract their next generation of partners. And with less overall partners to choose from, more competition for partner mind share, and new born-in-the-cloud partners, vendors are, in Vegas terms, having to double down. CEOs are counting on channel teams to make the right moves. And CFOs are trying to figure out how to minimize risk – and maximize their return – in this high-stakes game.
It’s never been a better time for healthy skepticism about each partner.
I recall a channel partner who spoke highly of their expertise in the wine vertical. He requested a funded head to go after this market, however when really vetted, it turned out that the partner’s real strength was that they loved drinking wine and wanted to work on what they loved. While admirable to try and do what one loves, there was no reliable marketing, staffing, education or business plan to drive success. While perhaps an overly simplistic example, the point is that qualitative data is hard to validate without quality examination. Another example is a vendor I spoke with recently that discovered, by working with an expert 3rd party, that over 50% of their tier 1 partners that claimed to heavily promote that vendor online, had nothing of any substance about the vendor on their company website.
So how do we ensure solid ‘bets’ and achieve clarity on partner ‘worthiness’? The short answer is to scorecard your partners…more often, more aggressively, more systematically. And let partners know this is part of the game plan; you are putting a lot of skin in the game and they will be rewarded for doing the same.
In observing how channel vendors scorecard, we are basically seeing two groups:
- Those that are new to this style of managing partners and are getting used to making this a part of their programs from design to communication.
- Those that already have a commitment to scorecarding and are even having conversations with us about automating the process.
In the first group, many vendors are simply not ‘there’ yet on partner scorecarding. Some of these are trying to get on the right track, talking with finance, and building good processes. But there are also cases where the idea of systematically scorecarding is a brand new concept. We had a major vendor come to us because they were moving from 100% co-op accrual spend to almost all discretionary MDF. They had committed to the move and wanted to roll out a program immediately. We asked then when they had started scorecarding their partners, they replied with “When should we do that?” …Ouch! They had moved to a program where “placing the right bets” was crucial, but had no way to minimize the risk of those bets.
The second group, the one that is leading the charge, has their own set of challenges. Larger vendors tend to fall into this group, but they tend to struggle with typical ‘big company’ challenges like organizational silos and disconnected automation systems that don’t share data well…increasing their silo issues. For them, trust from partners is important but accuracy and authentication are equally important. The good news is that we are seeing senior executives pushing for the tearing down of silos, the integration of data, and the build-out of automation. This can dramatically improve visibility to key scorecarding metrics, bringing key partner data from systems like MDF, PRM, CRM, marketing automation, MRM, LMS, deal registration and others into a broad, more comprehensive view. This is a trend we support and encourage (both philosophically and through deep API/Web services integration environments) as it will make them smarter and more successful.
So, welcome to Vegas everyone. Are you ready to place your bets?
(For a deeper dive into scorecarding best practices, check out the white paper Key Scorecarding Practices for Channel Success.)
ABOUT THE AUTHOR
Steven Kellam, SVP of Sales and Marketing at CCI
As a growth specialist, Steven is responsible for CCI’s sales and marketing strategy and vision for today’s goals and objectives as well as positioning the organization for continued, long-term success. Steven has experience in both the VAR space, having run a successful Managed Services IT business, and a background in Manufacturing where he built a channel of over 2,000 partners.