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Architect Blog

The Cadence of a Super Channel Account Manager

CAMs Have the Toughest Job in the Industry

It is time to officially go on record that CAMs (Channel Account Managers) have the absolute toughest job in the indirect channel industry.

Super CAM

Tougher than their bosses, tougher than senior channel sales executives, channel operations, and channel marketing managers.   They are expected to be sales-oriented, strategic, consultative, analytic, administrative and collaborative with their partners and their internal peers and executives on a daily basis. They are given multiple roles including recruiting, onboarding, development, activating and motivating their partners while at the same time managing a professional measurement and reporting process.  In addition to these incredibly high expectations, the standard industry practice for vendors is to provide CAMs with fragmented / disconnected Excel spreadsheets to manage and measure all aspects of their partner’s business.   You don’t have to be a genius to realize that there is a high turnover rate in this role, and only the exceptional CAM is performing at a high level and generating rapid revenue growth with the partners that they manage.

No Degree in Professional Channel Management

Currently there is no undergraduate degree in professional Channel Account Management.  CAMs are expected to learn how to be effective on the job and navigate partner relationship development the best they can with minimal support tools and resources. As a result, there are a lot of missed opportunities with this “hit-or-miss” approach to partner business management.

A Better Approach to Channel Management

Only Super-CAMs can successfully complete all best practice tasks across the 10 to 40 partners they are typically assigned.   This diagram below details the professional steps that top performing CAMs complete monthly or quarterly to build high growth, committed, and capable partners.

Super Channel Account Manager

Unfortunately, because CAMs usually have inefficient Excel spreadsheets to manage these tasks, only a fraction of their assigned partners develop business plans, scorecards, and QBRs.   But there is now a set of tools to help CAMs manage these tasks in minutes.   No longer do CAMs have to choose which sub-set of partners they can deliver professional development support to.   These 5-minute partner management tools put all the data, processes and reports at a CAM’s fingertips to allow them to eliminate most administrative work and focus most of their time on partner development consulting.

Turn CAM into Super CAM

CAMs have so many things to do to manage, motivate, and measure their partners, so they need a way to do all of them more effectively and in a fraction of the time.   Each of the business processes supported by these tools are completed either instantly or within 5-10 minutes with their partners.   This allows CAMs to provide professional support for not just their top two to four partners but all the partners they are assigned to.

How to Organize Your CAMs Cadence Across All These Tasks:

On the surface this looks like a lot of extra work for CAMs that are already very busy managing other tasks.  With these tools, channel executives can architect an end-to-end professional CAM and partner management process to systematically motivate their entire channel.  CAMs that use this approach can deliver more partner-led revenue at all tiers of a channel ecosystem.

CAM Cadence Plan

CAMs using these technology-enabled workflow tools can also access instant rollup reporting which will dramatically reduce administrative time.

CAM Rollup Reporting

How to Pull This Approach Together for Achieving a High Growth Channel

The first step in building a channel where your partners take the primary lead in generating business and representing you in the market is when you enable your CAMs to be true partner business managers.   This multi-faceted CAM role is the key to achieving the multiplicative effect of a channel network.  It is important to resist VP of Channel Sales temptation of, when times get tough near the end of the quarter, forgetting the mission of their CAMs, and turn them into sales reps.   This will result in neglecting your partner’s leadership role and take your channel strategy several steps backward.   Your channel strategy will succeed if you commit to both CAM and partner success by deploying the process steps above.   Here are the key components of your successful partner-led growth strategy:

  • Performance Scorecard:  A one-page business summary to enable CAMs to have the business performance discussion with their partners monthly
  • Capabilities Scorecard:  A five-minute success blueprint and action plan to guide individual partner development efforts through each life-stage
  • Account Planning:   A tool to facilitate the pre-deal registration discussion between your CAM and partner sales executives to identify cross-sell opportunities within the partner’s client portfolio
  • Business Plan / Profit Forecast:  A five-minute commitment development tool to help CAMs build a 36-month plan and profit forecast with the partner
  • Quarterly Marketing Planner:  A 10-minute quarterly marketing planning tool to build consistent, ROI-based marketing plans that are ready to be submitted for MDF approval
  • QBR Builder:   A 5-minute PowerPoint QBR builder that automatically creates performance-to-plan, pipeline-to-target, and scorecard goal achievement updates

Not only will your CAMs be highly effective, but they’ll also love their jobs.   These tools allow them to get rid of the annoying administrative work and focus on the growth and enablement consulting that is the most fun and satisfying part of their jobs.   And your partners will also prefer your brand because your CAMs will be able to help build capabilities, profitability, and performance plans that are customized to their individual partner needs.  The time is now to get rid of your spreadsheets and manage all key CAM-led processes with these technology-enabled tools for dramatic improvements in efficiency and effectiveness.

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Categories
Activate Blog

Channel Underperforming? – The First Place to Look is Your Channel Program Life-Stage

There are a lot of things a channel VP can do to accelerate revenues, but choosing exactly what to do based on an honest assessment of your channel’s life stage is a great place to start.Channel Program Life Stage All channel organizations are at different stages in their development and maturity, and each stage indicates a different set of improvement priorities and actions.ContributersEarly channel program life-stages focus on partner recruiting and initial activation. Later life stages tend to center on partner commitment development, increasing percentage of partner-led deals, and partner pipeline development. Partner program development needs to be acutely aware of exactly where a program’s development is today and align growth initiatives with its current life stage.

Let’s look at the goals and needs of partners, channel managers, and channel executives at each of channel program life-stages.

Enabling Technologies

Once you have determined your channel program’s life stage, you’ll need improvement goals and an action plan to achieve your goals.

Creating an Action Plan

With limited resources (and likely too many to-dos!), understanding the current stage of your channel can really focus efforts and make sure you are addressing the most important things first.

Creating an action plan can be the best way to organize your approach. This will help your organization invest in the right https://ellisclinic.com/medical/buy-xanax-online/ initiatives and drive to measurable goals as you begin to execute.

Starting

At the starting stage, there are several key areas you should consider. Depending on your priorities, rank the most important objectives relative your organization, then consider what you need to do drive the required behavior with brand new and early stage partners.

REMEMBER-  a prospective (or even contracted) partner won’t mean anything for your channel program until they start producing revenue. Less than 10 percent of signed channel partners ever reach that stage – what can you do to make sure you do better?

Key Questions What to Consider Potential Actions

How do we attract new partners?

Message:  What story/message would be compelling in terms of partnering with us?

Focus:  How can we focus this message to drive demand for the program?

Online:  How would partners find us online?

Demand:  What else can we to drive partner demand (sales team efforts, events, brand awareness)?

Invest in messaging and content that is compelling to partners, thinking about what’s in it for them.

Focus messaging as specifically as you can on your prospective partner base. The more relevant it is the better.

Align outbound and inbound marketing to drive eyeballs to your messaging
(e.g. Targeted Email, Google pay-per-click, ABM)

Once a partner finds us that happens next?

Website:  How does your website address the needs of new partners?

Process:  If they are interested in learning more about partnering with you – what happens next?

REMEMBER– this is the first experience a partner may have of your company. First impressions count.

Optimize your website to provide compelling and accessible content for organizations wishing to explore a partnership with you.

Provide a clear next step for partners wishing to sign up – make it easy for them to take the next step.

How do we make sure a partner who expressed interest doesn’t disappear?

Engage:  How do we engage with our prospective partners before they are signed up?

Pro-Active:  How can we pro-actively continue the conversation with a partner who expressed interest?

Provide a partner portal that is accessible and relevant to brand new partners – don’t make it difficult for them to get to the information they need or confuse them with too much content (less is more)

Connect your partner sign up process to your channel team. Make sure you reach out to prospective partners and help them take a next step. The human touch is very important.

Create metrics that flag up partners who expressed interest but did not engage again after a certain period. Use these reports to follow up and find out why.

Do you have the supporting tools for Step 1:  Attract the Best Partners

1) Attract the best partners

2) Screen and select partners

3) Onboard and activate

4) Support their success

5) Motivating partner portal

1) Outbound partner marketing and website content

2) Partner capabilities scorecard

3) Partner onboarding blueprint

4) Action plan to improve partner effectiveness

5) Partner-centered portal experience

Emerging

 

This is the arguably the most critical life stage as it focuses on converting ‘signed’ partners to ‘revenue producing partners’. If you can improve the percentage of partners who successfully complete this stage, it will have a direct impact on channel revenue and growth.

 

Key Questions What to Consider Potential Actions

How do we encourage and enable a partner to sell for us?

Partner Types:  Think about the different types partners who are registering and the needs they have.

Requirements:  What is baseline requirement to enable a partner to sell?

Support:  What do you need to provide to meet these requirements?

Create and deliver needs-focused program content.  Map this content to the different profiles of partners you are engaging in the program.

Provide easy access to the content that will enable a partner to quickly learn about your offerings. Create a way to assess ‘sales readiness’ content.  (e.g., a simple online course or test that partners can take).

How can we encourage rapid deal flow?

Deal Registration:  Have you created an easy-to-register deals process?

Incentives:  Are there incentives that can be provided to drive partners to register opportunities early in the sales cycle?

Implement a deal registration capability which makes it very easy for partners to provide you with information regarding the deals they are working on.

Create a rewards or gamification incentives that encourages partners to register opportunities that are not ready for quoting/contract. For example, offer a gift card reward if a partner successfully set-ups a presentation/demo with you included.

What can we do to pro-actively trigger revenue?

,

Partner-Enthusiasm Leads:

Leads that you generate and send to a partner can be a great way to encourage a give and take relationship with a new partner.  Consider your lead flow and if there is a way to allocate certain leads to partners who express an interest with working with you.

Introduce an outbound lead distribution process/policy. Make it easy for partner to access leads.

Map your content/sales support to the leads you distribute – your partners will find it easier to close business if you provide them with the correct assets, support and insights based on the parameters of the opportunity.

How do we plan for success with partners?

 

Partner P&L:  Consider a way to show partners the financial benefits of selling with you. If you lay out the benefits in terms of revenue it will be more compelling for the partner.

Introduce a simple business planning process that you can use to create a revenue focused plan with your emerging partners. Make it easy for them to see the benefits based on hard ROI in the relationship.

Do you have the supporting tools for Step 2:  Activate and Motivate Partners

1) Targeted Partner Content and Communications

2) Deal Registration

3) Lead Distribution

4) Sales Readiness Training Content and Assessment

5) Partner commitment development

6) One-page partner performance summary

 

1) Personalized Partner Experience (Portal)

2) Deal Registration Tool

3) Lead Management Tool

4) Training and Quiz Tools

5) Business planning tool

6) Partner Performance Scorecard

Accelerating

Once partners are generating revenue for your business, it is very important to pro-actively drive behavior that will keep them actively engaged and growth focused. At this stage, more structure is needed in the relationship you have with your partners.

 

Key Questions What to Consider Potential Actions

How do we track plan and partner performance?

Business Plan:  Is there a way you plan with partners that makes them responsible for collaborating with you tracking to agreed goals?

Deal & Action Plan Tracking:  Are we enabling partners to provide status updates on their deals, marketing programs and plans?

Introduce business planning tools that make it easy for your partners and channel team to implement and track to agreed plans.

Optimize your partner portal to ensure every use can make easy updates to all key records that are required to understand partner performance.

REMEMBER– you need to make these processes simple and easy for your users. Partners already have too many places to update data. Anything too complex or onerous will not work

How can we pro-actively drive more revenue generating activity with our partners?

Growth Opportunities:  How do we make sure partners are aware of revenue generating opportunities such as product launches, promotions or time-based incentives?

Create communications and alerts that notify specific partners of what’s happening in your program and how they can make money by taking actions you recommend. Make sure the content is focused to the profile and interests of your specific partners.

REMEMBER- just having offerings is not going to work unless your partners are aware of what’s available. You need to be pro-active in driving behavior through targeted communications and calls to action.

How can we drive more outbound marketing with partners?

Demand Generation:  How can we enable partners to execute marketing and social campaigns on our behalf.

MDF:  How can we provide partners with marketing funds to drive more revenue on our behalf?

Implement ‘through partner’ marketing campaigns by providing your partners with the content, assets and support they need to create demand on your behalf.

Implement a structured ‘MDF’ program where you reward partners through the allocation of marketing funds based on their performance in your program.

How can we help partners deal with scale as revenue increases?

 

Support Enablement:  How can we make sure the team on the partner side is sufficiently enabled and authorized to deliver and support our solution at scale?

Create structured training and certification programs for sales and support staff at your partner organizations.

Focus on technical and implementation resources who will make sure your partners customers are happy as they deliver solutions they have sold on your behalf.

Do you have the supporting tools for Step 3:  Drive more Partner-Led Revenue

1) Business Plans/QBRs

2) Targeted Calls to Action

3) Partner Led Marketing

4) Marketing Development Funds

5) Training and Certification

1) Partner QBR

2) Partner Experience Personalization Platform

3) Through Partner Marketing System

4) MDF System

5) Learning Management System (LMS)

Maturing

Once you reach maturity in your Channel Program, it is critical to continually monitor and optimize your program while also delegating more responsibility to your partner and channel sales teams.
REMEMBER – If you laid the correct foundations for this in earlier life cycle stages, you will be in a great position to understand and optimize your mature program. If not, you may need to go back and make sure some of the steps you should have taken along the way have been addressed.

Key Questions What to Consider Potential Actions

What is the best way to measure program performance?

Metrics:  Think about the partner performance metrics that are most important to your business. Set targets based on what you think you should be achieving.

Measurement:  Measuring your program against these metrics will provide direct insights in relation to overall performance.

Define structured Key Performance Indicators (KPIs) across the different life cycle stages of partner engagement.

Perform regular analysis of your key performance indicators across the program. Use these KPIs to stack rank your partners against benchmarks for your program.

How can we enable our partners to drive growth within their organizations?

Brand Advocates:  Who are the most active champions/advocates of our company within our partner organizations?

Growth Enablement:  How can we enable these people to drive growth within their companies?

Designate ‘champions’ you are granted additional permissions to manage their organizations relationship with you.

Provide easy self-service tools allowing your champions to manage their own users including the ability to onboard and enable new people within their organizations.

How can we help our partners promote their business to more customers?

Partner Promotion:  What routes do we have available to give our partners more exposure and advocacy?

Deserving Partners:  How do we determine which partners are deserving of this support?

Utilize your website/search real estate to provide a partner/solution finder that will enable customers to connect with your partners. Include a lead generation component enabling partners to get immediate notification of opportunities created because of this promotion.

Use your partner KPIs analysis to rank the order in which partners are displayed based on customer search criteria. Provide partner champions with the tools they need to manage their own online profile.

How can we re-engage with inactive partners?

Lapsed Partners:  Why have partners previously engaged stopped working with us?

Value Proposition:  How can we make it compelling for them to come back to our program?

Produce analysis reports based on partner inactivity. Create triggers to your CAMs alerting them when partners are showing trends towards inactivity.

Pro-actively reach out to inactive partners with highly tailored messaging/offers designed to create new interest. Follow up on communications until status of partner intent is obtained.

How can we grow the footprint we have with existing partners?

# of Active Contacts:  How many people at our partners are actively engaged with our program?

Engagement:  Is there more that could be done to drive engagement with more individuals at our partners?

Messages:  What messaging/offers would be compelling to encourage new people at our partners to engage with us?

Perform analysis on your partners to determine what level of engagement you have with each (for example no of active employees at each account vs. total employees).

Target individuals at existing partners who are not currently active in your program but who could be suitable to engage. Pro-actively reach out to these people using outbound marketing campaigns.

Provide a tailored role-level on-boarding process for new users at existing partners. Create and deliver content that would be appealing to the profiles of the targets you have identified.

REMEMBER – just because you have a mature relationship with a partner that does not mean you have a mature relationship with a person at the partner who may be expressing interest in your program for the first time. Make sure your messaging and content is cognizant of that.

How do we know what people at our partner organizations need and want to help drive success?

Data:  Does your CRM data give you a true picture of your partner relationships? What do you really know about the roles and interests of your

Survey:  Are there ways to ask your partner contacts what they really want? How can you use this feedback to better serve your community?

Implement partner self-profiling and feedback mechanisms within your partner portal. Have users provide information with a ‘little and often’ mindset.

Use the data collected to create personalized experiences that address the requirements of the partners who provided feedback.

 

REMEMBER- in a mature channel it is not realistic for you to maintain accurate data on your partners and users. If you can involve the user in this process they will take ownership for their own data. This not only improves the quality of your information, it will you also help you better serve the needs of your user ecosystem. Think Facebook – everything is personalized based on who the person is, what they like and how they behave.

How can other organizations help grow our partner base?

Extend:  Are there other organizations in our ecosystem who can help extend our reach?

Recruit:  How can we support these organizations to recruit and nurture partners on our behalf?

Map your extended ecosystem to identify organizations that are well positioned to attract and onboard new partners/users on your behalf. For example, regional distributors or master agents.

Develop a plan/program to enable these organizations to manage demand generation processes on your behalf.

Do you have the supporting tools for Step 4:  Generate More Producing Partners

1) Partner Performance Metrics

2) Partner Self Service and Feedback

3) Pro-Active Partner Promotion

4) Distributor/Influencer Enablement

1) BI/Visualization Tools

2) Partner Relationship Management – Partner Self Service/Feedback Tools

3) Partner Locator/Solutions Marketplace

4) Partner Relationship Management – Third Party Enablement Tools

 

Partner Tools for Each Channel Program Life-Stage:

There are a range of tools available for supporting each channel program life-stage.  The key to improving partner productivity and revenue contribution is to select the right tools for the life stage of your program.

Enabling Technologies

Achieving sustainable growth with your channel is only possible if you match your strategies, resources and tools with your channel organization’s life-stage.  The first step is to figure out exactly where your channel program is in its life-stage development.   Then you need to define your goals, needs and resources to this life-stage.   This alignment will guide your strategy to select the right systems and tools to achieve your channel life-stage goals.   We have found that channel organizations that employ a life-stage focused strategy are 2-3 times more effective versus those that do not.

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Categories
Advance Blog

The Biggest Lies Told In The Channel

Maybe we don’t realize we are lying when we speak to each other. It is the natural tendency of both parties to make a positive impression, which leads to tall tales of how committed one is to the other. But each side has a clear motive for their pitch to the other.Featured Image Most vendors prioritize their support based on the partner’s overall sales. On the other hand, partners tend to classify their vendors based on market position and local reputation. New ContributersToo often each party has already put the other into a “bucket” before fully understanding each other and discussing their potential together.

Vendors will pre-slot a partner that is below a certain size (e.g., < $10M), has fewer technical certifications (e.g., sales cert only), or is a certain type (e.g., VAR, ISV, or MSP).  This is not necessarily a bad place to start but too often partners are classified and limited based on their current position, and are not given the opportunity to unleash their potential.  This approach also ignores other more indicative measures of the success of the relationship.

Too often vendors prescribe a packaged support and enablement plan before fully understanding the partner’s team, as well as other unique characteristics of the partner’s business. Vendors that are working with partners need a more comprehensive scorecard system to tease out strengths and growth potential areas for a partner.  Likewise, partners may classify a vendor based on its market position (e.g., #3), differentiation (e.g., minimal), and support programs (e.g., modest) and slot this vendor as a secondary / non-strategic supplier.   Both parties will fail to realize the potential of a collaborative relationship.  Here are some right and wrong ways for vendors to classify partners and partners to classify vendors.

Wrong and Right Ways

Partner recruiting and onboarding processes need to include not just the superficial measures of a partner and vendor’s business (in red) but a more comprehensive and representative view of all potential value each party can provide to the other.  This article will define a best practice recruiting, scorecarding, onboarding and enablement process designed to highlight the value that partners and vendors can provide to each other to maximize the revenue and ROI in their relationship.

Why We Lie:

Both partners and vendors are looking for a disproportionate share of the other party’s time, attention, and resources to improve their success. Within most channel organizations, the channel account manager (CAM) role is evaluated based on their ability to attract and activate the largest and highest profile partners in each territory.  This naturally leads CAMs to make the vendor / partner relationship sound as attractive as possible to the larger partner, even if this results in slightly festooning the truth.  Partners also adopt a similar approach with vendors, particularly the smaller ones, because they feel the need to amplify their position and capabilities to overcome the vendors natural bias toward the largest partners.

What Questions Should Vendors Ask Their Partners?

The problem with focusing on the biggest partners with the strongest reputation in each territory is that it is much harder to get their time and attention. The larger the partner, the more difficult and expensive it is to get time from the partner’s sales team.   Large partners play a critical role in building a channel ecosystem, but vendors should not put all their eggs in this basket.   A balanced approach that builds https://www.blodtrykk.info/buy-ativan-online relationships with large, mid-sized, and smaller targeted partners is the best way to optimize channel growth and profitability.   Finding the “diamond-in-the-rough” smaller and mid-sized partners that are a strong fit with your brand and growth strategy is much harder work, but well worth the effort.   A more rigorous evaluation process to identify the businesses that a vendor should invest in will result in a higher percentage of revenue contributing partners.

Key Metrics to Determine Which Partners to Invest In:

Metrics

What Should the Partner’s Response be to a Vendor’s Screening Questions?

Partners that want to build a deeper and trust-based relationship with their vendors should approach them genuinely and earnestly. Partners that grow faster and are more profitable are those that actively reach out to their CAMs for support and work to find a win-win strategy with their suppliers.  Partners should work with their vendors on the following tasks:

Screening

Successful collaborations between vendors and partners start with an understanding of each other’s priorities and needs.  Asking the right questions and honestly participating in a dialogue to find common ground will result in a stronger and longer lasting relationship. But the use of tools to help facilitate this process will dramatically improve your ability to replicate this process across your entire channel team.  Consider use of the following cloud-based tools to help facilitate trust and commitment building with your partners.

  • Partner Performance Scorecard: One-page summary of performance to plan, pipeline to target, and program performance
  • Partner Capabilities Scorecard: A questionnaire-based scorecard for delivering 1-100 scores on key success metrics for your partners including improvement action planning and rollup reporting
  • Account Planning: CAM / partner sales account planning to target cross-sell opportunities
  • Partner Business Plan / Profit Forecast: A guided workflow for creating a 36-month business plan P&L
  • Quarterly Partner Marketing Plan Builder: A guided workflow to create activities, tactics, budget, lead waterfall forecast revenue and ROI estimated in 5 minutes
  • Quarterly Business Review (QBR) Builder: A 5-minute automated QBR PPT builder created / edited by CAM

Good luck building strong and long-term relationships with your partners based on honest exchanges of needs and commitments.

www.successfulchannels.com

Founded in 2013, Successful Channels delivers 5-minute, cloud-based channel manager tools for building partner capabilities, commitments, pipeline and revenue growth. These tools include a 5-minute scorecard, a 5-minute business plan and profit forecast, a 5-minute marketing plan, and a 5-minute PPT quarterly business review. These tools are integrated with Salesforce, partner portals, and a range of other channel systems.

www.partner-perspectives.com

Partner Perspectives and our business associates provide comprehensive research, advisory services and custom channel consulting services. Our team is experienced in identifying and executing core business strategies which include channels as a fundamental element.

Why are we different? We live in the partner world. We operate reseller businesses. We have worked in global, two-tier distribution organizations. We have built and ran partner and alliance groups within a myriad of high tech corporations. We understand, firsthand, what works and what doesn’t work with vendors and the relationship investments made with channel partners.

Our clients save time and money from leveraging our unique industry familiarity, awareness and guidance.

See Gary at the Channel Visionaries Conference in San Francisco:

What: Channel Visionaries Conference

Where: San Francisco

When: September 14th – 15th

Keynote Presentation from Gary Morris: The Five Biggest Mistakes VPs of Channels Sales Make and How to Avoid

Registration Link:  https://channelvisionaries.com/channel-chief-series/registration/

Use Gary’s promo code is: SUCCESSVIP to access a special rate of $895

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Categories
Architect Blog

The Top Five Wrong & Right KPIs used by VPs of Channel Sales

Even the most sophisticated, global, multi-billion-dollar annual sales channel organizations make these same basic mistakes over-and-over again.   Why do they keep choosing the wrong KPIs (Key Performance Indicators) to select, measure, and track their partner’s performance?  They do this because they are choosing the “obvious” metrics that, with little thought, appear to be the right ones to focus on. New ContributorsUnfortunately, these decisions are costing channel organizations millions of dollars in missed growth opportunities and profitability.   Let’s start with the top five worst KPIs to select for your channel organization:

  1. Choose the Largest Partners to Recruit:  Select the largest partners based on overall revenue.
    • ◈Metric:  Focus on the partners with the most salespeople and largest revenue.
    • ◈Why Wrong:  The largest partners are also the hardest to gain their attention and commitment and may be less profitable on average vs. smaller partners.
  2. Spend More on your Largest Partners:  Invest disproportionately in partners that generate the most sales for your brand.
    • ◈Metric:  Focus on your largest partners in revenue for your brand.
    • ◈Why Wrong:  Your largest partners today may have lower growth upside because you have tapped into much of their cross-sell potential vs. other partners.
  3. Allocate Marketing based on Historical Sales:   Allocate MDF / Coop based on earned accrual.
    • ◈Metric:  Allocate marketing dollars based on a percentage of prior year sales growth.
    • ◈Why Wrong:  No future performance is required for accessing and spending this money.
  4. Use the Same Metrics for all Partner Life-Stages: Use same metrics for your brand new and long term / mature partners.
    • ◈Metric:  Partner sales measured above all else.
    • ◈Why Wrong:  Each stage in a partner’s lifecycle requires different resources, support and metrics.
  5. Measure the Number of Partners Added to the Network:  Focus on growth of the partner network vs. making the partners you have produce fast.
    • ◈Metric:  The total size of the partner network.
    • ◈Why Wrong: For most channel organizations, 20 percent of partners deliver 80 percent of the revenue.  Adding more partners with flawed onboarding only makes this problem worse.

On the surface, these KPIs sound like the right metrics to monitor. The problem is that none of them focus your channel organization’s highest potential areas for growth. The good news is there is an alternate set of metrics that are closely aligned with partner growth potential.

Top Five “Right” Types of KPIs for Your Channel Organization: All partners in your network are on a journey from the moment they start their relationship with your brand until they become high-performance, actively producing partners.   At each partner life-stage there are a set of metrics and methods uniquely designed to support their growth.

Right Channel MetricEach step of a partner’s life-stage journey comes with a corresponding set of recommended tracking and performance metrics. These metrics help define the partners that are the best fit with your brand while also serve to track the activities that are necessary to develop capable, motivated, and revenue-producing partners.

The Five Right Categories of Metrics that VPs of Channel Sales Should Implement: Each of the following five metric categories are critical to finding the right partners for your business, developing their strategy to improve their readiness for your brand, and generating motivated and capable sales and support teams.   However, not all of these metrics are critical for all your partners all the time.  It is best to match the right metrics to the right partner life-stage and periodically review all the metrics for each partner.

  1. Partner Fit with Brand Strategy Metrics: These are excellent for assessing new candidate partners and updating your “latent” partners that have not been active for a while.
  • ◈Philosophy:  Partner philosophy alignment with your brand
  • ◈Verticals:  Partner business alignment with priority vertical segments
  • ◈Openness:  Partner openness to introduce your brand to their customers
  • ◈Commitment:  Partner willingness to commit to investing in your brand
  • ◈Record:  Partner track record with growing complementary brands in related categories
  1. Partner End-Customer Business Profile Metrics: These are core partner capabilities that new and existing partners need to track and develop over time.
  • ◈Vertical Expertise:  Concentration of partner business in priority brand verticals
  • ◈Functional Expertise:  Depth of partner expertise in priority business functional areas
  • ◈Product Portfolio:  Alignment of complementary products to your brand offered by partner
  • ◈Services Portfolio:  Depth of partner-delivered services and delivery capabilities
  • ◈Key Accounts:  Partner’s portfolio of accounts that represent most of their business
  1. Partner Capabilities Metrics: These are key capabilities and delivery metrics that need to be monitored for all active partners.
  • ◈Pre-Sales:  Partner’s market analysis, need identification, and target account analysis
  • ◈Technical Sales:  Demo, Proof of concept, configuration, and needs assessment capabilities
  • ◈Deployment:  Track record of successful customer deployments for other solutions
  • ◈Support:  Track record and portfolio of ongoing partner-delivered support services
  • ◈Renewals:  Customer satisfaction and contract renewal rates with end customers
  1. Partner Activation MetricsThese are metrics that track the level of activity and effort your partners are allocating to the growth of your brand.
  • ◈Commitment: Partner business plan with time-bound, measurable targets
  • ◈Investment: Measurable partner investment in brand w/ vendor
  • ◈Co-Sell:  Collaborative account planning and cross-sell targeting
  • ◈Deal Registration:  Number of partner-led and vendor-led registered deals
  • ◈Deal Progression:  Partner-led proposals, SOWs, POCs, and business cases
  1. Partner Performance Metrics: All partners, new and old, should set targets for these metrics and track and measure their performance.
  • ◈Perf-to-Plan:  Backward-looking YTD sales performance relative to an agreed upon target
  • ◈Pipeline-to-Target:  Forward-looking pipeline comparison to an index (e.g., 3x) of sales target
  • ◈Ave. Deal Size:  Average deal size achieved by partner vs. a target
  • ◈Training & Certs:  Partner achievement of training & certification levels
  • ◈Partner Required Tasks:  Completion of partner contracts & other onboard tasks

Each of these metric categories and individual metrics need to be adapted on a company-by-company basis to come up with the ideal partner performance scorecard and blueprint.  If well defined, these metric scorecards will be motivating for your partners through all their partnership life-stages.  Defining how to implement these partner life-stage metrics is as important as the metrics themselves.  The use of a strong scorecard, business planning and QBR system is key to achieving the revenue producing outcomes of a partner life-stage management process.

The first step is to profile current and potential partners on the initial life-stage metrics. This is typically done with the use of a questionnaire that is answered by the partner directly or together with the Channel Account Manager (CAM) assigned to them.   Questions can be organized by “category” and “topic” area.  Each question can be scored on a 1-100 basis to profile where a partner stands with each metric.

QuestionsA questionnaire helps partners quickly assess themselves vs. a vendor-defined best practice.   The questionnaire can be deployed to help a partner inventory what they are and are not doing to build their success plan.  Partner responses can be scored and presented in a friendly report to help identify where they stand on all key capabilities metrics.

Partner Capabilities Scorecard:  Build a partner skills and capabilities plan in 5 minutes

A 1-100 scale helps partners identify, in minutes, their strengths and improvement opportunity areas.  The red, yellow, and green balls help partners focus their attention on their greatest needs and plan improvements.  This scorecard report can be updated in minutes, quarterly or semi-annually, to fine tune improvement planning.

Scorecard Summary

Partner Performance Scorecard:  Provide an instant summary of where a partner’s performance stands

The second step is to setup a “Partner Performance Scorecard” system to provide your partners with a one-page summary of exactly where they stand on all key performance metrics.  The metrics included in this view are related to the business output of the partner.  On the top, they can see a graphical summary of where they stand with all key program metrics. This includes sales performance, pipeline performance, and performance on other key program level (e.g., Silver, Gold, and Platinum) requirements. They can also see a quarterly review of their performance on each individual sales, pipeline, certification or other partner required tasks.

Graph and Charts

The combination of these two scorecards (i.e., Capabilities Scorecard & Partner Performance Scorecard) provide a comprehensive view of all five categories of metrics required for a high growth channel.   The great news about these dashboards is that they are either created automatically for the partner (Partner Performance Scorecard) or created in minutes by / with the partner (Capabilities Scorecard).

Quarterly Business Review (QBR) Tools:  Create a QBR PowerPoint presentation in minutes to review with your partners

In addition to these two scorecard tools designed to put these best practice metrics into action, there are also QBR tools designed to create a comprehensive business review in a PowerPoint presentation in minutes.   These tools automatically pull in the target and performance to target data for all metrics and allow the Channel Account Manager (CAM) to edit and produce a comprehensive QBR presentation in minutes.  With tools like this, CAMs can do performance-to-plan reviews with 100 percent of their assigned partners every quarter.

CAM QBR

Channel organizations that define the right “hard working” metrics for each partner life stage generate, on average, 10-25%+ revenue growth vs. the prior year vs. those that do not.  This is based on a detailed analysis of partners that complete plans and QBRs and measuring their actual sales performance vs. prior year.  Setting the right metrics and implementing systems that are specifically designed to assess, track, report, plan and measure your partner’s ongoing performance are the key to realizing accelerated revenue growth gains for your channel. At the same time, providing these instant and 5-minute tools allow your CAMs to focus on delivering growth and enablement consulting to their partners vs. digging through multiple disconnected systems and shuffling Excel spreadsheets to product a fraction of this QBR on their own.

If you like what you read here, learn more about Successful Channels and LogicBay.

www.successfulchannels.com

Founded in 2013, Successful Channels delivers 5-minute, cloud-based channel manager tools for building partner capabilities, commitments, pipeline and revenue growth. These tools include a 5-minute scorecard, a 5-minute business plan and profit forecast, a 5-minute marketing plan, and a 5-minute PPT quarterly business review.  These tools are integrated with Salesforce, partner portals, and a range of other channel systems.

www.logicbay.com

Founded in 2003, LogicBay delivers technology-enabled channel management solutions to companies that need to build, scale, or optimize their indirect sales channels. At the core is our Partner Relationship Management (PRM) technology, combined with a proprietary strategic methodology that helps accelerate revenue and lower costs for vendors and their channel partners.  The productivity gains from PRM improve channel partner satisfaction while helping vendors to manage their indirect sales more efficiently at scale.

See Gary at the Channel Visionaries Conference in San Francisco:

What:  Channel Visionaries Conference

Where:  San Francisco

When:  September 14th – 15th

Keynote Presentation from Gary Morris:  The Five Biggest Mistakes VPs of Channels Sales Make and How to Avoid

Registration Link:   https://channelvisionaries.com/channel-chief-series/registration/

Contact Gary to receive the “Speaker Colleague Rate”

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Categories
Advance Blog

Cloud Left Partners Out to Dry and Vendors Don’t Care

It is time to stop crying over spilt milk.  The days of traditional enterprise, on premise-only deals with fat margins, are slowly disappearing and there is little sympathy forthcoming from technology vendors.  The changes in the IT hardware infrastructure market have been with us for a few years. With the emergence of cloud computing on the impact on all facets of the ITContributors ecosystem we will look at what each player is facing and provide some observations and guidance about how each player can gain advantage and remain relevant during these turbulent times. For the software aficionado’s, we will examine the software changes in the market in another article.

The Sky is Not Falling for Your IT Infrastructure

Cloud infrastructure is growing rapidly but you still have time to plan a thoughtful and staged move from your traditional IT infrastructure to a new cloud model.

Traditional IT vendors are marketing a range of cloud and on-premise solutions (for the purposes of this article on-premise is defined as capital equipment owned by the customer in their data center or in hosted data center) through the indirect channel to meet changing IT buyer behaviors and it is time to either adjust to the changing market or do something else.  Vendors want to work with traditional partners that have engineered their business model to the new realities of the market and / or work with new “born-in-the-cloud” partners that can help increase and accelerate penetration of their cloud solutions to existing and new markets and customers.

End Users:

For end users, cloud offers more options for sourcing IT solutions with lower total cost of ownership, alternative technologies and delivery options, new vendors, and new approaches on how to improve and deliver IT to their internal and external customer base.

As the procurement and origination of IT systems and applications shift to more involvement or outright ownership by the internal business units inside of corporations, the choices and decisions companies are making vary widely. But one thing is certain – the previous status quo has been turned on its ear. Vendors, distributors and breadth of resellers will need to react to these changes and approach the end-users differently.

The customers are likely to demand more collaboration with the seller, greater understanding of the total cost of ownership, the return on investment metrics and what the seller can offer in terms of assisting with the adoption of the new systems and applications. While cloud is the news of the day, pricing for this alternative may not be a driving factor. In fact, it may be down the list a quite a bit. End users need to be acutely aware of the providers’ SLA’s – performance, availability metrics, data security, data portability and quality. Poor quality and service are always unacceptable regardless of price. Further, switching costs should also be known up front.

As companies of all sizes move more and more applications to the cloud, adjustments to how they set expectations and deliver services to the business will continue to morph.

IT is Not Moving to Cloud Infrastructure as Fast as You Might Believe – the Public is the Leading Indicator of “Cloud” Adoption

Let’s take a top-level look at the cloud market data provided by the analyst community.

IDC

Cloud Adoption

So, what do these numbers tell us? First, as we all know most of the forecasted growth is cloud spending for infrastructure and software. What we sometimes forget is that even at the end of the forecast period in 2020 the traditional data center spend is still about 43% of the total.

While we are not ones to whistle through the graveyard, for us it indicates that ~ 43% of the data center spend is still within the purview of on-premise providers. We certainly wouldn’t ignore the obvious movement to the cloud, but for all parties involved, having a hybrid strategy of growing the cloud business while still providing product and services to the on-premise clients seems to us to be a winning strategy.

Key Steps for Traditional IT Partner’s Business to Meet Changing Market Needs

The world is not changing overnight but careful business modeling and changing steps will get partners in a position to succeed.

So, what does the traditional IT indirect channel need to accomplish to put themselves in a position to succeed and what should they expect from their vendors?

  1. Bottom-up partner business, staffing and profitability modeling
  2. Hybrid (cloud & premise) partner business modeling
  3. Parallel business growth & target account planning
  4. Balancing of an engineering-driven model with a marketing & sales-driven model

Vendors:

Vendors that Use Cloud to Differentiate and Expand Will Win:

Vendors that build new cloud delivery models and nurture both traditional and new cloud-focused channel models will win with partners and end customers.

The vendors have a stubborn problem. For those in the hardware business, specifically infrastructure hardware, the old days are just that, old. Hyper-converged systems, reduced buying of big brands by mega-datacenter operators and reductions in market capitalization are all putting real downward pressure on the traditional, name brand, IT vendors.

To keep shareholders happy, vendors have a few choices. They can grow through acquisition, be acquired (e.g. EMC / Dell), or they can align their resources to their new strategic direction (e.g. HP sale of software unit and IBM focus on software and services). They can also gain back some margin by moving partners out of distribution and serve them directly or they can sell direct to end-users. This helps profitability but may hurt their ability to scale and keep the distributors engaged.

One thing the traditional infrastructure vendor can’t seem to accomplish is to gain presence into the mega-datacenters. This is a big problem as ODM’s (original design manufacturer) and “unbranded white box” solutions are gaining share. (Does the customer care which brand as long as the provider is delivering to the customers’ SLA expectations?) If the traditional vendors can’t penetrate the IaaS cloud vendors and the traditional vendors customers’ move applications to IaaS providers who are using equipment from the ODM manufacturers, then the brand-named suppliers of compute, storage and networking are in a bind! When commoditization and de facto standards level the playing field, customers benefit and name brand vendors suffer (see X86 and trends like SDN and SDS).

The traditional infrastructure vendors themselves need to transform in order to survive, but they must also think about the larger ecosystem. Helping their partners to transform is a good start, but much more must be done.  They need to re-productize their products and services for the digital economy, identify and execute strategic partnering and M&A activity, and enable their existing partners to better compete in the cloud marketplace. Innovation is the big neutralizer.

Channel Director LLCC

Distributors:

Distributors that Become More Like Value-Added Partners Will Win in a Hybrid Cloud Market

Distributors must add more services to help partner customers and end customers succeed with traditional and cloud-based models to compete in the new IT delivery world.

Distributors are facing a serious challenge to their long-standing value-added proposition to resellers as well as to their vendors. While many fundamental and historical distributor services don’t change, in the era of digital distribution others are no longer relevant.

We could deep dive into many areas, but for the purposes of this article, distributors are focused on two avenues: innovation or aggregation.

Innovation versus aggregation depends on your vantage point.  Take for example the recent Avnet and Tech Data transaction.  For Tech Data this was an aggregation play.  Yes, it’s filled some holes in their global footprint, expanded their vendor portfolio, and it increased revenues and relevancy with key suppliers.

For Avnet, the play was innovative; out with the old, in with the new. They are embracing the new economy and digital transformation.  The sale of Avnet Technology Solutions (ATS) jettisoned the legacy model business and generated capital to invest in the future.

The recent acquisition of Premier Farnell added engineering resources and supply chain services for their customer base. To further their innovation strategy Avnet acquired Hackster.io.  CEO, Bill Amelio stated “During the quarter, we further enhanced our digital platform with the acquisition of Hackster.io, which provides over 200,000 makers a forum to learn how to design, create and program Internet-connected hardware. They strategically aligned their supply chain capabilities of the components business with engineering resources and innovators.

Now this is not the only innovation in distribution.  Look to Westcon’s acquisition of Verecloud, developer of cloud services brokerage platform for the channel. Credit Westcon for the courage to acquire a technology platform to differentiate their services.

ScanSource’s acquisition of Master Agent Intelisys was another innovative move.  Recognizing issues with traditional resellers adopting the recurring revenue model, they acquired a telco channel partner that possesses the experience, build processes and capability to sell and support services.

All of this points out distributors must think and act differently moving forward or they will become less relevant to the IT market. The distributors will have to focus on services whether that is new services, or really hone and refine their skills with existing services like enablement, channel management, setting up marketplaces, new financing programs and possibly aggregated billing systems if they want to survive.

Food for thought – Could US distributors sell direct to end users like their Non-US counterparts?

 

Partners:

Partners that are Prepared Can Live Long and Prosper:

Most successful IT partners have all the ingredients to succeed but need to model and update their business strategy for the new IT cloud-delivery world.

Partners are not immune to the ongoing change to how customers are sourcing IT solutions. Many partners are unprepared for the shift to the cloud and a service based industry.  Some had blinders on and disregarded the change, thinking it was not real or not going to impact them or their customer relationships.  Now the cold hard reality is setting in, and vendors are not taking care of partners to the extent partners would like or as the vendors have historically done.

End-user customer relationships and their associated spend are moving to cloud providers direct or to resellers that have embraced the digital economy. Those that do feel ignored or bypassed by vendors and are not proactively addressing the challenges to their business model are vulnerable and may not survive.  This is a wakeup call; take responsibility for your company, your decisions, and actions.   This is a whole new world; the digital economy, Technology as a Service (TaaS) is affecting all the entities in the IT channel ecosystem.

Partners of all types have many options ranging from:

  • Migration from product resale to services.  Services may take many forms depending on the reseller appetite for innovation and investment. The profitability should improve as the partner adds services and moves up the value stack (staff augmentation, professional/engineering services, and managed services).  Profitability will also increase if the services are not vendor resell, but rather reseller built and delivered. Keep in mind that while services will increase profitability it will likely reduce top line revenues through the transition as the reseller reduces its dependency on product sales and transitions to a service based recurring revenues business model.
  • New alliances or strategic partnerships with channel partners who are involved in delivering cloud services/solutions. This will expand reach, capabilities and accelerate speed to market.
  • Build professional and/or managed services practice(s). Add engineering resources to develop your own IP, increase services expertise, add new capabilities, or increase capacity.
  • Align with an ISV or an app developer to add more software to the portfolio or to build unique applications or capability.
  • For resellers that want to continue to embrace the product sales model, they can increase revenue by adding new practices and product categories.
  • Start reselling cloud services as a way to get in the game. These services will be a recurring revenue stream which will grow the top line, increase bottom line profitability, and provide greater value to your customers.  This is also a solid first step leading to the sale of more professional services.

Partners have always been very resourceful and innovative. As the customer’s needs change, so must the partners approach and their portfolios. Partners have lots of choices, let’s hope they choose the right ones.

Food for thought – Could large resellers pivot to provide distributor-like services?

Partner NetworkMore complex, more choices for all

Cloud Providers

The Cloud Channel Will Stay Relevant by Leading with SaaS and Services

End customers are moving to cloud-delivered software solutions but still need services and configuration support to realize the full value of the software they are using.

The cloud market is white hot right now, but you may be surprised as to where the action is happening. If you haven’t kept up to date with the real data on what is moving the needle, here are some data points. (see Chart 2)

  • In cloud computing the largest segment today is Software-as-a-Service (SaaS) think Sales Force,
  • Right behind SaaS is Business Process-as-a-Service (BPaaS), think Accenture
  • In third place is Infrastructure-as-a-Service (IaaS) think AWS.

Some will be surprised by those standings, but the distance between second and third is minor. Given these data points and what is happening in the IT business is compelling news. For some cloud providers, it is awesome and they wish it was growing faster. For traditional IT infrastructure companies, the tone is certainly less enthusiastic. In many cases they are seeing their revenues decline, value diminish, and market caps heading in the wrong direction. This means layoffs, reorganizations, leaner operations, changes in their go to market plans and less usage of the channel.

At this point cloud providers should be interested in the channel for many of the traditional reasons (reach, enablement, engineering, billing) as well as new services such as assessments, design, implementation / integration, deployment, adoption and other services best delivered by the customer’s trusted advisor, the partner. So, this won’t be your daddy’s channel. To gain the interest of cloud providers channel partners have to be heavily committed and invested into services, both vendor services and their own services. As the margins on the product side continue their decline the services will carry the load for these folks.

New Line of Business Buyers Still Need Partners – But in a Different Role

Software and other cloud-delivered services will come from new budgets but LOB buyers still need partners to deploy, configure, and support business implementation and provide advisory consulting services on how to improve business processes

Over the next five years we will see more change in the overall IT industry than we have in a long time. The industry has matured, prospered and now the structural changes that are happening are disrupting all aspects of the model we have known very well for many years. The true winners here will be the customers with more choices, value and simplicity. Make no mistake we will all have a lot of heartburn over the same period.

Good selling!

 

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Categories
Activate Blog

Partner Life-Stage Activation Has Never Been Easier

Any experienced channel executive knows that a partner’s relationship with your brand changes over time. This is based on a range of factors – a partner’s business priorities, the brand’s fit with the partner’s strategy, and the depth of the relationship between the partner and your organization. As a partner’s relationship with your brand changes, vendors must adapt to keep the relationship active and engaged.Strange Management

The Pareto principle (80/20 rule) is almost universal for companies with large channel networks. It is hard to find a company’s channel network where more than 20% of the authorized/registered partners represent less than 80% of the overall business. This is because the principles of partner life-stage activation are rarely followed or implemented by all channel managers. During the initial stages, partners and channel managers are excited about future business prospects, but once it gets down to the real work of on-boarding and enablement the enthusiasm for the relationship tends to fade. This results in a very large percentage of inactive, disconnected, and non-engaged business partners. Channel managers need to guard against partners becoming disillusioned and unfocused, leading to a “partner-in-name-only status” where they only sell and register deals if they accidentally “trip” over a new opportunity. How can a channel team beat the averages and create a more activated and greater revenue contributing channel?

Create More Activated Partners

The biggest difference between the partner life-stage management process on the left and the partner life-stage activation on the right is the focus on delivering partner-valued support. Partners want to know how they can become more successful and profitable building their business around your brand.

Life-Stage Partner Activation are key partner-valued activities that improve activation:

  1. How partners stack-up vs. best practices: Partners appreciate seeing how their capabilities stack up vs. a company’s best practices
  2. How partners stack-up vs. peers: Partners appreciate seeing how their organizational capabilities stack up vs. their peers
  3. Profitability forecast: Partners are seeking a forecast and plan to maximize profits on product margins and partner-delivered services
  4. Custom improvement action plan: Partners are actively seeking customized action plans for improving sales, services and delivery
  5. Measure: Partners welcome periodic measurement and reporting to ensure that they are on track with the goals they set for themselves

Channel teams that have had the greatest success in achieving partner life-stage activation use a partner scorecard system. This helps channel managers build customized and motivating action plans for each of their assigned partners.

Below is an example of a partner capabilities https://www.codaworx.com/online-pharmacy/ scorecard that profiles a partner on key attributes on a 1-100 scale. Partners answer a series of questions organized by the categories and topics and generate a score for each based on their completion of selected tasks, processes, and capabilities.

Scorecard Summary

Partners can then create their own customized improvement plan for each metric with their channel manager.

How to Choose the Right Partner Activation Scorecard Metrics:

Channel managers are typically assigned a set of partners to manage. Each of these assigned partners are at different stages of their activation lifecycle. Channel managers need to figure out the activation life-stage by partner and build a custom plan to help them improve their business.

Suggested Metrics to Consider for Your Partner Scorecard:

  1. Recruit: Fit with brand, align with key verticals, sales, presales and delivery staffing levels, align customer with brand targets, market position, and business strategy
  2. Onboard Success Blueprint: Recommended partner-delivered services, sales & presales training, delivery training and certifications, & solution pricing & packaging
  3. Sales Motivation: Market size assessment, profile of key brand prospects, sales incentives, market opportunity identification, competitive differentiation, & professional selling skills
  4. Sales Opportunity Targeting: Identification of target customer opportunities, mapping of cross-sell opportunities by account, pre-deal registration opportunity identification, merge with registered deals
  5. Pipeline Activation: Margin incentives to register deals, target account presentation & business case support, marketing campaign support, & lead nurture programs to advance deals
  6. Support Success & Profitability: Partner profitability forecasts, deal progression support services, overall process management support, & QBRs

Additional Suggested Best Practice Activation Metrics from Channel Industry Analysts: Sirius Decisions recently presented their recommendations for a best practice partner scorecard. Below are their suggestions for the ideal partner profile & activation metrics:Metric

These 6 “C” metrics are good for partner recruiting, successful onboarding and activating partners to push your brand vs. competitive brand solutions. If your partners are compliant with all the recommended scorecard metrics, they’ll be in a better position to grow your brand.

As a channel executive, your goal is to figure out how to beat the 80/20 Pareto average for your partner ecosystem. Focusing on partner life-stage activation vs. partner life-stage management practices will get a greater percentage of your partners in a position succeed. Using partner scorecards is an excellent way to implement a consistent life-stage activation process that all your channel managers can follow regardless of their level of experience. The result will be a greater number of partners activated and invested in growing your brand.

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Categories
Award Blog

Getting More from Your #1 Investment in Your Channel

A company’s investment in its partner management team is typically its number one channel expense. This investment includes salaries, bonuses, and related costs for channel sales, channel account management, channel marketing management, and channel operations. The primary purpose of these combined roles is to help partners generate more revenue and profit contribution for the company’s channel. Unfortunately, this typical channel team is not nearly as productive in achieving these goals as it could be due to a lack of enabling tools, business processes, and aligned compensation and incentive systems.

To get a better appreciation for the level of investment required to run a successful channel, understanding the total costs for operating a channel is necessary. Channel costs take many different forms depending how a company defines its partner program. Below is an accounting view of a typical channel P&L that highlights investments by different discount and expense categories.

A P&L Illustration of Primary Cost Categories:

Gross Sales

(less) Adjustments to gross sales:

  • Partner compensation (revenue level discounts)
  • Deal registration discounts (account-level discounts for partners)

Net Sales

(less) Direct expenses:

  • (# 1 Expense) Channel Management Staff Expenses

Gross Margin

(less) Indirect expenses:

  • Market development funds (vendor-provided partner marketing funds)
  • Cooperative advertising (vendor-funded partner promotions)
  • Partner sales promotions & incentives
  • Channel operations expenses

Net Margin

  • Channel profit contribution

To calculate the total direct staffing costs to run a channel we have provided statistics on average salaries per channel role. Glassdoor.com provides some good estimates of channel staff costs for US-based teams.

Channel Salaries

 

A company’s channel management staff is usually assigned to manage the top 20-40 percent of the channel ecosystem. This example of a mid-sized company assumes that approximately 50 percent of its revenue is delivered by its channel.

Example: Mid-Sized Company ($750M in Annual Sales)

  • Total number of partners = 1,000
  • # of “direct-managed” partners = 400 (600 unmanaged)
  • # Channel Account Managers = 20 (20 partners per CAM)
  • # of Channel Sales Managers = 13 (30 partners per CSM)
  • # of Channel Operations Managers = 4 (100 partners per COM)
  • # of Channel Marketing Managers = 8 (50 partners per CMM)Direct Staffing Costs

If we assume that approximately 50 percent of the company’s sales is generated from the channel, then this equates to 1.5 percent of total channel sales in staffing costs. This conservative estimate highlights the substantial investment most companies make in its channel development & support staff.

So why is the channel management team not nearly as productive as it could be to deliver accelerated revenue growth and profit contribution?

Four Factors Why Channel Management Teams Fail to Meet its Objectives:

  • Highly Complex Role: The old model of a relationship CAM is far too narrow to be successful today. CAMs need to become experts in the product, markets, sales, enablement, marketing, business models and profitability management
  • Lack of Channel Management-Focused Systems: Company IT systems make channel managers work far too hard to pull the appropriate data for partner performance tracking and QBRs
  • Need to Become an Expert Partner Business Consultant: Partners are looking for professional business advice from their channel management team on all aspects of their business
  • Roles and incentives are misaligned with partner needs: Too often, particularly when it gets near the end of the quarter, partner enablement is abandoned for channel team focus on direct selling

The best place to start to get more from your channel management team is setting expectations. Expectations are set with job descriptions and reinforced by managers, enablement tools, and incentives. If you have not looked at your channel job descriptions lately, they may be worth a look. Here is an example of a channel manager job description from a regarded consulting company- BCR.Sales Manager Job Description

Although there is nothing wrong with this job description, top performing channel teams do so much more to enable their partner’s success by building their commitments, capabilities, and delivery of accelerated growth for the vendor’s brand. Here is a set of best practices to help get more from your Channel Management team, through enablement, training, automation, and professional development.

How to Get More from Your Channel Managers

  1. Prepare Channel Managers for This Highly Complex Role: Although there are often other teams channel managers can call on for support, they need to have a working ability to deliver these “services” to their partners on their own
    1. Product Enablement: Channel managers need to be fluent in the vendor product line and can explain its benefits and how it fits into a partner’s product / service portfolio
    2. Market Opportunity Expertise: Channel managers need to have a strong understanding of the served market, competitors, and how the vendor’s brand uniquely solves customer problems
    3. Sales Expertise: Channel managers must have strong selling skills to understand customer needs and match the vendor’s solution with these needs
    4. Partner Enablement Capabilities: Channel managers need to be capable to provide some enablement support directly with their partners
    5. Marketing Strategy Training: Channel managers need to be able to provide partners with marketing strategy guidance to help create more sales leads and opportunities for partners
    6. Partner Business Model Training: Channel managers must have a strong understanding of a partner’s business model to help coach them on potential business model improvements
    7. Partner Profitability Modelling Expertise: Channel managers need the ability to help partners predict and model their own profitability to guide business planning
  2. Provide Productivity and Effectiveness Tools for Channel Managers: Provide Channel managers with step-by-step (guided) tools to help them build strong, motivated, committed, and profitable partners
    1. 5 Minute, Partner Life-Stage Scorecard and Action Planning Tools: Provide Channel managers with the ability to instantly assess a partner’s capabilities and create a customized enablement blueprint in minutesCAM customized Scorecard
    2. 10 Minute, 36 Month Partner Business Planning Tools: Provide Channel Managers with guided tools to create partner commitments and a path to greater profitability3-5 min scorecard
    3. 5 Minute Partner Quarterly Business Review (QBR) Tools: Provide partners with the ability to deliver QBRs instantly to celebrate successes and plan improvementsPPS
  3. Develop Business Consulting Tools of Channel Managers:
    1. Show Channel Managers How to Become Professional Consultants: It is not enough to simply enable your channel managers on all the complex roles listed in item #1 above. These Channel Managers need to learn the process of becoming a professional business consultant.
    2. Listening Skills: channel managers need to develop skills on critical listening and questioning to pull out the motivations and needs of their partners
    3. Summarizing Partner’s Needs and Goals: Channel managers need to be able to synopsize what they hear from their partners and summarize their needs and goals
    4. Match Goals to Resources and Actions: Channel managers need to develop the skill of matching partner-defined goals with vendor resources and development of action plans
    5. Support Implementation: Channel managers need to be able to “champion” the support plan by help organize the resources required for partner success
    6. Monitor, Measure, and Report: Channel managers need to sharpen their skills for monitoring plan success, highlight key measures, and report on a regular basis
  4. Align Channel Manager Incentives with Partner Success and Business Outcomes: Compensation and incentive plans can’t be based only on achievement of partner sales targets.
    1. Partners Sales & Pipeline Metrics: An important but only a component of a channel management comp plan is the achievement of backward looking (Performance-to-Plan) goals and forward looking (Pipeline-to-target) goals
    2. Partner Capabilities Metrics: Achievement of partner training, certification, market coverage, products offered and marketing and sales capabilities metrics
    3. Partner Profitability Metrics: Measurement of partner’s ability to build a profitable business with the sale of a vendor’s brand and associated partner-delivered services
    4. Partner Planning & Performance Management Metrics: Measurement of partner’s completion of scorecards, business plans, marketing plans and QBRs on a regular basis
    5. Partner Satisfaction & Activation Metrics: Measurement of partner satisfaction levels with the vendor’s brand, their assessment of their channel manager, and to the extent the partner is actively selling and supporting the brand

All channel management roles have changed dramatically over the past 2 years. So much more is expected of these professionals to help partners become competent sellers and support agents for a vendor’s brand. Vendors that take a long view of what it will take to improve the ROI on their largest channel investment (channel managers) will be rewarded with more productive, revenue-producing, motivated, and capable partners.

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Categories
Advertise Blog

If You Put One Dollar into Your Channel, How Many Dollars Do You Get Back?

Most channel executives are familiar with the dreaded question from the company CFO or CEO: What did we get for what we spent in the channel last quarter? Channel budgets have never been under more intense scrutiny, and the need to justify the return on investment of expenses is a continuous area of concern for channel chiefs.AuthorsTwo channel budgets that are most often under the microscope are rebates and marketing expenses.

Channel Rebates ROI:

Because channel rebates align to specific revenue targets, it is possible to model the revenue attributed to the payment of rebates versus prior year. Channel teams typically create a comparison of a partner’s revenue growth either quarter-to-quarter or current quarter versus prior year and then calculate the ROI on channel rebates based on the incremental revenue earned versus rebates paid. This straightforward analysis gives CFOs and CEOs some level of expense justification for these significant budgets. Rebates don’t always generate the highest ROI relative to alternative channel investments, but the impacts are easy to measure and model.

Channel Marketing ROI:

On the other hand, it is difficult to obtain an accurate measure of ROI with channel marketing programs, particularly with MFD-funded, partner-led marketing programs that are executed using third-party vendors. The four biggest challenges for measuring channel marketing ROI are:

  1. Fragmented approval process: Many programs have distributed approval processes that do not lend themselves to consistent planning and forecasting estimates.
  2. Fragmented execution: MDF-funded partner marketing programs often use several vendors to execute campaigns and generate qualified opportunities, which results in leads of varying quality.
  3. Fragmented systems: The vendors that execute partner-led marketing programs typically lack unified lead capture and qualification systems.
  4. Fragmented reporting: Because of the lack of coordinated marketing execution, the leads that are generated are not consistently followed-up on, progressed, and reported by partners.

Which leads to this advice: Before you launch any marketing program, you should ask Is there agreement across my team and organization of what success means?

This question is often unasked and unanswered, and for a lot of good reasons. For a program to be successful one must start with a goal, but goal setting takes deep thought, and that takes time, which most of us in the channel don’t have. Sometimes goal setting involves a lot of guessing, and in some companies, a wrong guess can be career-limiting.

Also, measurement is really hard. In 2016, Millward Brown published a report with data gathered from over 300 senior executives on the current state of digital marketing. Executives reported that email, search, and online ads were the easiest to track the ROI of, whereas events and webinars were the most difficult to see the ROI on. Note that these were senior leaders of brands, agencies, and media companies (e.g. direct marketers), not channel professionals. For a myriad of reasons, adding channel partners to the mix makes it much more difficult to measure the ROI on activities, so channel marketers are reluctant to commit to KPIs that drive the business.

Ability to Track

Measurement in the channel is difficult, but marketers should welcome it. In the first place, accountability is good. A-players hang out with other A-players, and A-playing marketers are confident in their ability to deliver. Accountability and visibility force the lower performers into the spotlight, where they’ll raise their game or go elsewhere. Either way, it’s better for the company.

By committing to KPI’s and reporting on success, the marketing team will raise its profile with the executive team and the company. There are some companies that still consider marketing a luxury, and positive results will shift that perception over time. It will also reduce the friction with the sales organization, who too often look down on marketers. There’s too much art and not enough science in it for them, perhaps. Real data changes that perception, and it may also ignite important discussions that increase the interlock between the two organizations. Take the age-old question “what is a qualified lead?”. To some marketers, a qualified lead is someone that fills out a form on one of their web pages. To a sales rep, that’s junk. To them, a qualified lead is a deal that closes itself. The truth lies somewhere in the middle, and it’s different for every company.

Start with the end in mind (Stephen Covey)

We recently completed an informal survey across a range of clients. The key takeaway is that most are struggling to deliver a quantifiable measure of what they are getting for what they are spending on channel marketing. We concluded that there are several contributing factors, including poor planning, worse execution, and little to no follow-up.

If this sounds like your company, consider implementing the following approach to get your channel on track.

The Seven Characteristics the ROI-driven Partner-Led Marketing System

  1. Well-defined set of partner marketing goals
  2. Alignment of marketing tactics & budget to achieve these goals
  3. A detailed lead waterfall forecast that estimates the impact of this plan
  4. A calculation of estimated revenue and ROI that will result from this campaign
  5. An automated process to capture and publish campaign leads and deal registrations in CRM
  6. A deal progression and pipeline reporting system to monitor outcomes
  7. A post-campaign ROI verification process for leads, revenue, and ROI

The best way to get started is to help your partners create a set of goals for their overall business, and help them figure out how marketing will support the achievement of these goals. To set your expectation properly, remember that not all campaigns are equal; they’re not all going to be rock stars. The adjustments you make along the way will make the difference.

Set Overall Channel Marketing ROI Targets Before You Meet with Your Partners

Say your company has set a goal to drive $10 million in channel revenue this year, and you’re tasked with creating the marketing generated opportunities (MGOs) that will deliver on that revenue target. Let’s work backward to find out how many you’ll need to deliver.

The following table identifies the key pieces of information you’ll need to hit the target number of MGOs. You can download this worksheet for your use here.

No doubt there will be some guesswork in this exercise. For example, in companies with a lot of different products, it’s difficult to know what the average deal size is, although you could run the analysis for different segments or partner types in our channel. It’s also difficult to predict how good your partners are at selling; not all partners are created equal. We contend that it’s best to create a bleak scenario (low response rate, bad close rate, small deals, etc.) and then base your marketing efforts on that. You’ll likely see a better outcome than the model predicted.

Action Planning

The model above tells you you’ll need to deliver 12,600 MGOs this year (line H) to hit a $10 million revenue target (line L). From there you can work back to create quarterly, monthly, and weekly targets for your team and channel partners.

With your target identified, it’s time to decide on the mix of tactics (how you’ll get there) and the metrics to measure (how you know when you’ve arrived). This is when the planning process begins in earnest.

Work with Individual Partners to Create ROI-Defined Marketing Plans

Now that you have your overall channel growth and ROI targets defined, it is time to work with individual partners and build up a plan, partner-by-partner, to achieve these goals. The great news is there are now unified partner planning systems that will guide channel managers through the seven steps defined above. Most partner-level marketing planning done today is on spreadsheets or on Word documents that are not integrated into a company’s CRM and make it very difficult for systematic tracking, goal setting, planning and performance measurement. Leading channel organizations are now using integrated systems that guide and manage partner marketing processes from beginning to end.

Partner Lead Marketing System

Steps 1 and 2 are completed by the channel partner or in collaboration with the CAM in as little as 10 minutes. Once completed, steps 3 and 4 will happen either automatically or when the partner registers a deal. This solution allows channel partners to focus on their highest value activities, which is to follow-up on the new opportunities generated. The integrated system tracks and reports on leads, pipeline, revenue and ROI automatically.

Key Benefits of a Unified Partner Marketing Planning, Execution, and Pipeline Management System

  1. Simple: In less than 30 minutes, a partner or CAM working with a partner can build an ROI-based marketing plan, submit for approval, and execute by customizing templated marketing campaigns
  2. Effective: While these campaigns are doing their work, lead and deal registrations that result from these leads are being reported directly in Salesforce for tracking and reporting purposes
  3. Integrated: Partner marketing planning, execution, performance measurement and Salesforce reporting is all integrated into a unified system
  4. ROI Before and After: Partners can estimate their leads, revenue, and ROI upfront and track actual results after execution automatically

Channel executives are under more pressure than ever before to deliver measurable revenue and ROI from their channel marketing investment. It is no longer acceptable to provide a through-partner marketing automation system to your partners by itself and simply hope for the best. Any investment in channel marketing must be made with the ability to set specific revenue and ROI targets, directly link to relevant marketing systems to execute campaigns, automatically link leads and deal registrations into the vendor’s CRM and be integrated with partner-level plans to measure campaign performance, leads generated, and ROI. Anything short of this will result in an uncomfortable discussion between the channel chief and CFO / CEO to the question “What is the return I getting when we put $1 into your channel?”

 

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Attract Blog

Leading Partner Executives Say CAMs can be the Secret ingredient to their Success

I thought it was about time we heard from a person who is more qualified to advise vendors on their channel programs and go-to-market strategies than just about anyone else. Luanne Tierney has been one of the most successful Silicon Valley channel executives in the industry,Authors holding the highest-level positions at Cisco, Juniper, Fortinet, and Proofpoint. After building an exceptional track record leading channels at each of these companies, she decided to move to the other side of the desk to build an innovative partner organization focusing on next generation technologies and services to meet the IT needs of 2017 and beyond. Luanne and I collaborated on this article to show how channel vendors can better meet the needs of their partners and build a mutually beneficial relationship that is a win for all parties.

Partners Need Help from Vendors

Partners may not always admit it, but they absolutely need help from their vendors and will enthusiastically welcome the right kind of support. Partners know that their vendors have far greater reach and market presence than their own and play a major role in defining the positioning of a partner’s brand. Partners very much want to leverage all the following strengths from their vendors for defining their business strategy:

  1. Differentiated products
  2. Recognized and trusted brand
  3. Services and delivery expertise
  4. Technical support resources
  5. Customer relationships
  6. Integrated industry solutions

Partners Need to Leverage Their Vendor’s Attributes to Grow Their Market Position:

Partners take many different paths to become resellers of another vendor’s brand. Most partner founders have a strong vertical market area of expertise, have deep technical knowledge, or have experience in solving specific business process-related problems. They depend on their vendors to help build an attractive positioning strategy to win more new customers. Forward-thinking partners actively seek assistance from their vendor’s channel account managers (CAMs) to help them leverage resources to successfully position their business for the future.

Channel Account Managers Hold the Keys to the Kingdom for their Partners:

From a partner’s point-of-view, CAMs can be a secret ingredient for accelerating their growth. Partners depend on their assigned CAMs to provide them with expertise, resources, consulting advice and access to other vendor executives to help build their business. Partners also actively seek help from their CAMs to grow their market position leveraging the vendor’s products, to help define a marketing strategy to generate new sales opportunities and provide technical resources to build their business operations. Partners are setting the bar high for their CAMs while at the same time they will pay vendors back with loyalty and investment in their brand. Below are detailed expectations for a highly-valued CAM.

Valuable CAM's

Leading partner executives like Luanne Tierney expect a lot from their vendor’s assigned CAMs to build a profitable growth model for their business. CAMs are expected to ‘bring up their game” to become highly capable business consultants for their partners.

How can a Vendor’s CAMs Start Becoming this Wonderful?

CAMs don’t simply decide to be “extraordinary” one day and instantly become the darling of their partner community. CAMs and vendors must first decide that they are committed to their partner’s success. This commitment starts from the top of the vendor’s channel organization which directs the CAM team, first and foremost, to understand their partner’s business and work closely to build a joint value proposition that serves both organization’s goals. Channel http://natureair.com/buy-coumadin-online.html chiefs need to resist the temptation of diverting their CAMs to closing short-term deals for the partner, and reward CAM behavior that focuses on partner collaboration, enablement, and consulting.

Once CAMs are supported in this role by their executives, they need to make a personal commitment to become more knowledgeable on their own products, the served market, the competitive landscape, and the partner’s business. This new enablement model requires that CAMs themselves become expert consultants on many aspects of a partner’s business.

Super CAM / Partner Business Consultant:

The days of measuring a CAMs effectiveness by the number of partners they able to acquire and “list” your brand is now a distant memory. This strategy resulted in vendors acquiring a very long list of partners that will only sell your brand if they accidentally “trip” over a new sales opportunity. This is very counter-productive to the effectiveness of the entire channel organization.

Today’s “Super CAM” is one that carefully analyzes the partner’s business and creates scorecards to determine if the partner is a good fit for the brand. This Super CAM also provides pragmatic business advice to current and potential partners about the requirements on both ends of the partnership. This trust-building approach will result in a collaborative, open, and mutually beneficial alliance where both parties invest and share in the benefits. A Super CAM must develop the following areas of expertise to foster productive business partner relationships.

The Required Consulting Capabilities for a Super CAM:

  1. Partner Capabilities Assessment Consultant: Super CAMs need to be able to quickly assess a partner relative to vendor expectations and provide a scorecard assessment of their business capabilities.
  2. Partner Improvement Action Planning Consultant: Super CAMs needs to be able to build a customized partner capabilities plan and organize the resources of the vendor to help them achieve these goals.
  3. Partner Positioning and Value Proposition Consultant: Super CAMs need to be able to understand their products, the market, and the partner’s business to help the partner build a competitive advantage.
  4. Partner Growth and Profitability Consultant: Super CAMs need to collaborate on joint partner business planning, and calculate a custom partner profitability forecast for the sale of the vendor’s products along with partner-delivered services.
  5. Partner Account & Pipeline Management Consultant: Super CAMs need to be able to easily collaborate with the partner’s sales team to identify accounts for joint selling opportunities and manage and report leads as they develop / before and after deal registration.
  6. Partner Marketing Consultant: Super CAMs need to bring in the vendor marketing resources (social/digital assets) for driving joint demand. Work with the partner to have a 6-month marketing plan in place.
  7. Partner Performance Management Consultant: Super CAMs need to be able to easily pull together performance-to-plan Quarterly Business Reviews (QBRs) with their partners to celebrate successes and motivate goal achievement.

Vendors that are looking to grow their channel don’t have to look much farther than their current CAM team. Any CAM team has the potential of becoming Super CAMs if they have executive support for their mission, are trained on partner business consulting, and are provided with the appropriate scorecarding, business planning and account management tools to build trust-based relationships with their partners. The biggest fans of this strategy will be your partners who are actively seeking the support that your CAMs can provide for their business success.

Categories
Architect Blog

Have Channel Sales Executives Forgotten Why We Have a Channel?

Have channel industry sales executives forgotten why we need a channel to build business?  Is this even a legitimate question to be asking?  Of course, we all know the reason for a channel.  It is to expand a vendor’s reach in the market through capable, enabled, and motivatedauthor business partners that can generate new customers for our brands.  Partners provide vendors a multiplier effect by cross-selling a vendor’s brand to many of a partner’s current customers.   This working relationship is a win for both parties because when a partner sells a vendor’s brand they also can sell additional partner-delivered services.  At the same time vendors gain new sales they would not have generated on their own.

So why do so many channel sales executives seem to misunderstand this basic concept of the purpose of a channel?   Let’s better define the problem.

Why Channel Sales is Off Track with Their Channel Strategy:  The Partner Sales Manager Role – Given the intense pressure of quarter-to-quarter sales targets at public companies, many have transitioned the traditional role of a Channel Account Manager (CAM, PAM, RCM, etc.) to a 90% direct sales role and 10% and fading role of a traditional channel manager.   This traditional channel manager role as a business consultant, enabler, trainer, and motivator has morphed into a part-time or even smaller role to make way for a shorter-term focus on closing deals – today, tomorrow, and the next day.   More channel executives have turned the focus of their teams on developing and closing deals for their partners vs. the role of activation, enablement and sales-assist of partner developed opportunities.

Channel Sales Roles

The pressure of delivering short term channel sales sacrifices the development of enabled and motivated partners that are capable of developing sales opportunities on their own.   As a result, partners have become too dependent on the PSM to identify, develop, and close most or all the opportunities within their client portfolio. This process is crippling the multiplier effect of having a channel and reducing the self-reliance of a partner organization to become a competent and motivated seller.

The Channel is More Important Today than Ever Before:

It is important to take a step back. The channel organization’s role in a company has steadily increased in visibility and value over the past ten years. In the past, many channel departments would be buried under layers of sales, marketing, operations or financial management.

With over 75 percent of world trade flowing indirectly across all industries, many CEOs have elevated the role of the channel chief directly into the boardroom as a key member of the management team. One of the consequences of this added exposure is the pressure to drive KPIs that are directly reported to the board in private companies, and publicly in listed companies.

The New, More Complex Role of Channel Managers:

The channel organization has a myriad of responsibilities to their partners that include sales, marketing, operations, support, finance, legal and supply chain. In fact, the average channel professional has 75 distinct roles.

The Harvard Business Review (https://hbr.org/2016/10/the-sales-role-multinationals-need-in-emerging-markets)recently stated that the most successful channel managers look more like general managers than sales managers. We know that channel managers often don’t have direct control over the sales process of a partner, they use other skills to enable, engage, and drive revenue. This includes:

  1. Strategy
    Understanding the nuances of a specific territory, including competitive strengths, weaknesses, opportunities and threats, which allow a channel manager to build a strategy with a partner on a deal-by-deal as well as macro level. Sales managers tend to be much more tactical in nature, and most strategic planning is at a customer or deal level.
  2. Coaching
    Good channel managers understand that enabling a partner is critically important and so they spend their time ensuring that they are covering the details such as solution creation, logistics and compliance. It is more than just selling a deal, it is ensuring that all the ducks are in a row so that many downstream deals can be closed as well. This is the multiplier effect of having a channel.
  3. Finance
    The economics of running a channel territory are much different that running a sales territory. Beyond things like revenue targets, contract profitability, and pricing strategy, channel managers must also focus on areas such as inventory management, partner cashflow, and distribution terms.

There is a real danger in focusing a channel team too much on revenue and tactical deal flow. While the win rate per opportunity may be higher in the short term, the multiplier effect of self-sufficient channels will hurt long term success. Striking the right balance of a channel team between driving deal revenue and channel enablement, engagement and strategic planning is imperative. It is the classic “teach a person to fish” analogy.

There are a few difficulties in the measurement of this channel role, especially as it is reported to the senior management team. Many of the KPIs are soft by nature, and that doesn’t play well in a boardroom where sales and marketing professionals are managing now to the seventh decimal point. As it is a longer-term investment, it doesn’t play well in the daily/weekly targets that businesses are being driven against.

Another danger in focusing a channel team too much on sales is that they may miss the changing dynamics of the partners they are working with. Channels in all industries are going through a major transformation brought on by multiple factors including digital transformation, demographics, new competitive pressures and economic realities post 2008.

In the IT channel, for example, there has been a roughly 30 percent decline in the number of partners since 2008, with an additional 40 percent of remaining partners looking to retire in the next seven years, according to CompTIA. By the end of that seven year window, over 75 percent of the channel will consist of millennials. An effective channel manager would see these shifts happening and refine programs, incentives, messaging and even coverage to support it.

End Customer Buying Process is Forcing More Changes in the Channel:

Another major shift in channels is being driven by changes in the customer buying journey. Ten years ago, the CIO made 90 percent of technology decisions in an organization. Gartner is forecasting a complete reversal by 2020, where 90 percent of those decisions will now be made by business professionals in the lines of business. For example, the VP of Sales or VP of Marketing is now the main buyer of technology solutions – not the IT department.

This new buying journey, once called rogue or shadow IT has generated new areas of influence called the shadow channel. (http://www.jaymcbain.com/2016/10/the-rise-of-shadow-channels-5-new.html). A channel manager will understand that a customer VP of Marketing may not have IT in the room during a technology decision – and there is a good chance their traditional partner won’t be in the room either.

Having a macro level strategic view will guide a channel manager to make sure their organization is in the right customer discussions and exerting the right influence. This could involve getting closer to accountants, digital agencies or legal firms. It could also include diving deeper into other company’s ecosystems, building an independent software vendor (ISV) program, or even participating in the startup arena around the solution areas.

Having a channel manager focused too much on sales will hinder the multiplier effect of channels, drop the satisfaction of current partners who are looking to brand themselves and become more self-sufficient in the marketplace, and miss the ever-changing partner and alliance ecosystem.

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