March 2017 Feature

It’s Time to Grab the Partner Data Tiger by the Tail

by Hobart Swan

Last year we spoke with The Spur Group’s Senior Principal, Richard Flynn, about the need for vendors to collect partner data to obtain functional insight into the members of their partner ecosystems. We revisit that topic today, but deepen it with specifics about how both vendors and partners can benefit from doing so.

The Time Is Right

Before we get into the specifics, just a word about why we’re talking about this issue at this moment in time. After all, there is nothing intrinsically new about data collection – companies have been doing it for years. But, according to Flynn, there is an important difference these days.

“In the past,” Flynn says, “if I was lucky, I had a distributor that would tell me that this partner bought these products from me. But often that partner would be buying from multiple distributors, making it hard to allocate across all of the distributors.”

The difference today, he says, is that thanks to cloud-based services, vendors can now closely track who the customer is, what their utilization is or consumption of the product, and who the partner is that they purchased through.

“Big data, data analytics, and the cloud have converged to give vendors an unprecedented opportunity to gather important information from multiple silos and bring it all together in a meaningful way. Vendors have dreamed for a long time about this day. Well, that day is here.”

What Kind of Data and Where Do You Get It?

For most companies, Flynn says, the question is not so much where to get the data, but how to recognize the good data you already have, and then organize it into a single data source.

“What we’ve found is that many companies have usually three or four different databases that contain partner information. This includes sales transaction data, training and certifications, deal registration, leads, business plans that contain milestones and guidelines. Our experience with most of these companies is that once they start looking around, they can usually find quite a few data sources that are meaningful to the process of understanding partners.”

Access to data depends, in part, on building trusted relationships with partners. If a partner will provide access to the geographic regions, industries, and verticals where they do business, vendors can begin to organize their partner landscape in a way that makes it easier to bring partners together to deliver the complex solutions most customers look for these days.

“Thinking of it in terms of flow,” Flynn says, “it’s a matter of understanding the data you have, figuring out if there is data you need, then analyzing it and using it to change partner behavior in order to optimize the value of the relationship.

How Does Good Data Lead to Better Profits?

The whole discussion about big data and analytics can get pretty vague, pretty fast. So let’s start with some real-world examples of how data helps both vendors and partners. It’s not an exaggeration, Flynn says, to say that vendors are spending hundreds of millions—and sometimes even billions—of dollars on incentives.

“Partners tend to earn certifications just to meet program requirements. If they need to have four more people certified to get to the next tier, they’ll do it.”

But what technical competence do they actually need to serve the marketplace? One thing data can do is show you if there is a correlation between the number of certificates and the amount of sales.

“You might discover, for instance, that four isn’t the right number of certificates. Or if certificates aren’t translating into sales, then maybe the vendor needs to create a sales incentive instead of a training incentive. These are big decisions, and the only way you can make intelligent decisions is with data—and a process to turn it into actionable knowledge.”

Flynn says that companies may also misunderstand how to assess a partner’s cloud competency. For instance, a channel rep might simply ask a partner how many cloud users they’re selling to.

“That’s an important metric, but what’s sometimes a more telling metric is the percentage of cloud-based business versus traditional-based business. You might have a large company doing a lot of transactions. But when you actually look at what percentage of their overall book is made up of cloud services, it might be pretty small. With access to this kind of data, the vendor might decide that they aren’t the right partner for a given business opportunity.”

Flynn says that well-managed data makes it possible for vendors to assess just about any incentive.

“How do you know if a specific SPIF will work for all of your partners? With data that tracks the sales of that product, you can correlate sales to SPIFs. If you actually know the data and understand the partner behaviors the data are showing, you can counter any ineffectiveness by making sure that the incentives support the behaviors you’re looking for.”

If you know that a partner is not selling your new strategic product, then you can put together a combination of enablement readiness programs to encourage them to make those sales.

“You can approach a partner and say, ‘Hey, let’s figure out how to build your skills and help develop your competency around this particular new solution that we’ve got out here in the marketplace.’ That becomes a very data-driven way of thinking about incentives.”

Optimizing Your Partner Ecosystem

Flynn says that the beautiful thing about data collection is that it’s as good for the partner as it is for the vendor. Partners who grasp the implications of the shift from hardware selling to solution selling understand that their ability to win business these days depends on finding the right companies to team up with to deliver complex solutions.

“The emergence of hyperconverged infrastructures is changing the nature of relationships among partner organizations,” Flynn says. “Hyperconvergence refers to solutions that include data centers, servers, storage, network connectivity—all managed through software. To deliver such complex solutions, partners need to build alliances with companies they might once have thought of as competitors.”

The need for partners to come together to offer complex solutions isn’t new. But what is new is the ability to access and analyze enough specific data to help your partners choose the very best members of your ecosystem to work with.”

Every Sales Opportunity Is Unique

In today’s market, when every opportunity is different, every solution needs to be different as well. As Flynn says, “No longer is a customer buying a network switch. Now they’re buying a business process that uses a network switch. And 99 percent of the time, the process will be entirely unique to them.”

That speaks to the need for vendors to identify partners with the right skills to implement individually tailored marketing campaigns, that respond to carefully crafted incentive programs, and can form alliances with the right partners to deliver unique, complex solutions. Only then will the vendor—and the partners—be in a position to win business. And it all starts with data.

“Vendors need specialized partner alliances to sell specialized solutions. There’s a big difference between selling to a hospital and selling to a doctor’s office. But if these vastly different kinds of business are lumped together in your database as just being ‘in the health care industry,’ then you’re not going to have the information you need to serve them.”

The same is true for selling to a medical office in the Northeast versus one in the Southwest. Or one that has 100 doctors instead of 5 to 10 doctors.

“In the old days,” Flynn says, “rough segmentation was enough. Now you need to get very precise. You need to understand the technologies each partner sells, who they sell it to, who they work with, and what it takes for them to close a sale.”

Implications of the IoT

The ability of vendors to understand their partners at a deeper level is becoming even more important as markets evolve. With the explosion of the Internet of Things (IoT), the solutions your partners deliver—even the partners you work with—may well change.

“With the IoT, you’re dealing not just with technology partners, but also with partners that may be in a completely different line of business. Maybe they’re primarily H-Vac, or are a manufacturing equipment company, or use technology to run very large business processes.”

If you don’t use data to find out what drives your partners—to understand what’s in their wheelhouse, then you’ll start talking to partners in a very ineffective way, very quickly.

What Does It Take To Be Good at Data?

For many smaller vendor organizations that understand the importance of using data, the most important question may well be, ‘Can we do it ourselves, or do we need a global consulting group to set up camp for six months in a conference room?’

“The bottom line,” Flynn says, “is that your basic business professional or channel professional will be able to handle the process of looking at their data. The challenge might be that they often need help organizing and managing the data.”

To get there, he adds, you might either need to dedicate a specific team resource, hire an outsourced person, or bring in a right-sized consultant that understands the needs and challenges of a business your size.

“Vendor organizations have a hard time denying the fact that their success in leveraging partner data will be part and parcel with their overall success. And there’s no doubt about it: The thought of grabbing the data tiger by the tail can be very intimidating. But, perhaps with a little help, it is entirely doable for the average channel organization.”