August 10th, 2016
Channel Strategy: Building a Sustaining Partner Community
-A Case Study-
After working in a VAR partner organization for 8 years as a Sales Manager, leading an entire channel focused company for 8 years as a VP of Sales and spending the last 19 years consulting with vendors, distributors and VARs, dealers, resellers, partners all focused on channel based strategies, I believe I can say: I have seen it all.
What I would like to do in this blog is attempt to document and tell the story of one Worldwide channel focused software organization that did it the best– at building their channel. As they were a former client of Acumen, I simply wish to document certain steps without sharing confidential or competitive insights. If you have specific questions send me a note: Ken@AcumenMgmt.com
BTW: I know from personal experience the steps I am outlining can be executed by small, medium or even large vendor based teams.
First, let me state their market was highly focused, sophisticated but considerably large, and they were not the major player. This firm in 6 years had a 20% growth rate in an industry that was growing 3% annually, they quadrupled sales and profits margins were double the industry norms.
Do I have your attention YET?
But before I detail their actions, the three things they did not do were:
- Add more VAR’s into territories creating too much competition
- Start selling directly to larger customers
- Constantly invent new sales or partner incentive programs
Second: in a blog I can’t define all the specifics but I will create a checklist of the key initiatives they took with any appropriate notes. Future blogs may go into greater detail.
- They made a corporate philosophical strategic decision to invest in the channels business competencies and long-term capabilities. Knowing their resellers/partners were small businesses and as small businesses they thrive on consistency and long-term behaviors.
- They built a small team focused on this initiative that reported to the VP of Sales.
- In Phase 1 they focused on
- Business Management: Cash Flow, Sales Capacity
- Sales Management: Skills and Forecast Accuracy
- They made sure every Partner had strict accounting standards along with actionable business plans. Not simple spreadsheet budgets.
- They realized the Channel Partner was only as good as their Sales Manager, as an owner who is the lead salesperson or who has never driven a sales organization the company recognized that most of their Partners could scale for growth. They built market value calculators to convince the owner of the size of the market along with a salesperson allocation model. They began to build a Sales Management training focus.
- They provided full-time recruiting expertise to find, screen and interview candidates
- Next the vendor organization created new salesperson and technical development programs.
The Channel Vendor organization added higher levels of commitment within:
- Business Management
- Financial Planning
- Marketing Planning
- Sales Management
- Multi-product Management
- Account Management
- Technical Management
- CRM, for pipeline standardization
- Technical Staffing
- Skills Management
- Customer Retention
- Personal Management
- Personnel Review
- Benefits Programs
- Advancement Programs
- Training Programs
Then the light bulbs starting turning on; the vendor realized they didn’t know it all and they wanted to uncover the true best practices within their Partner community. We then created a 65 question survey to uncover information in each of the Phase Two categories, each question was scored as well as documented. The company organized and trained interviewing groups into 2-person teams. This process lead to categorizing their existing partner community into four segments:
Legacy Oriented, Farmers, Peak Performers and Rising Stars.
The results of this study paved the way to decide on what to focus on as well as who to focus on and the creation of an almost MBA experience for their VAR channel.
I have experienced, developed and lead many Partner Readiness programs, all are good, under this vendor they were excellent. I credit the vendor for their long term commitment, Partner communications and continuity of message.
What I tend to see is many vendors attempt to introduce these concepts on a semi-regular basis or toss funds at some of these actions during a Partner Conference or run a few programs via a web cast, then change consultants, introduce another set of new concepts without ever gaining the execution or increase in performance from the Partner. Partners begin to “tune out” most vendor’s attempts because of their time demands or the lack of real understanding by the vendor of what the partners face in managing their organizations.
This vendor is still investing in these concepts and it’s been 10 plus years of consistent messaging, training and investments.
HINT: For additional channel based information for vendors, Distributors and Partner Readiness check out www.ChannelEQ.co
Ken Thoreson “operationalizes” sales management systems and processes that pull revenue out of the doldrums into the fresh zone. During the past 19 years, our consulting, advisory, and platform services have illuminated, motivated, and rejuvenated the sales efforts for organizations throughout the world.
He was recently ranked for the third year in a row by Top Sales World magazine as one of the Top 50 Sales & Marketing Influencers for 2015. His blog has been rated in the sales blogs in the world!
Ken has written 5 books, his latest book is: SLAMMED! for First Time Sales Managers, Ken provides Keynotes, consulting services and products designed to improve business performance. Need more sales management resources? Check out his Sales Management Tool Kit or the Acumen Project and his new Ignite Your Sales Team online video training program for sales leaders.