Channel Marketing Strategies for Success

Channel Program Metrics and Actionable Insights (Emphasis on “Actionable”)

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In the complex world of the channel, data is power. So it’s not surprising that BI and analytics tools that help channel professionals access and understand their operational metrics are popular. But unfortunately there is often a disconnect between those that have the data and those who can use the data.

Too often data resides with IT because there isn’t anywhere else to put it. But at a fundamental level – think amygdala/brain-core type level – analytics for real insight aren’t about technology or tools, or really even about the data.

Consider what I like to call the three primary ‘swim lanes’ of the technology profession today:

Swim Lane One: Boxes and wires and networks and software and making all that stuff work together
Swim Lane Two: Databases and ERP/CRM/alphabet soup systems that leverage data and create data silos
Swim Lane Three: so-called ‘Big Data’ and squishy data and the burgeoning field of analysis of both squishy and hard data

Of course these ‘swim lanes’ are connected to one another, but are distinct disciplines and each essential to enterprise success. The disconnect happens when the folks in Lanes One and Two are disconnected from the outcomes that Lane Three actively pursues.

Lane Three ought to be about taking action from insight to transform the pipeline or order entry. It’s not about figuring out how stuff works and enjoying that process (discovery and mastery of a puzzle). It’s about making people and process changes that will generate business results.

Hence, I predict that in the coming years BI and analytics will become an area of expertise for those rare folks who:  a) are somewhat technical, b) understand data well enough to generate trustworthy and meaningful insights for the business, and c) want to then actively participate in and pursue the changes that these insights dictate.

I think this is why true change is hard within channel organizations. The infrastructure and constituencies (finance, IT, executive management) are deeply invested/entrenched in the existing structures resident in swim lanes one and two, making it very, very hard to drive the recommendations resident in the data.

We all need to re-examine our partner sets, incentive investments, success formulas (aka ROI calculations), margins, OPEX, you name it – and yet start with the end in mind, in order to build backwards to the data points and infrastructure to support those outcomes. Until then, we’re just treading water.

ABOUT THE AUTHOR

Meg Bingley, Regional Business Manager at CCI
After getting her start in media with a B2B marketing agency, Meg developed her expertise in marketing by creating, selling, and executing integrated marketing programs for Microsoft, HP, Seibel, Business Objects, Juniper Networks, Trend Micro, Symantec, and their respective marketing agencies for UBM (formerly CMP Media). Her experience with marketing communications for a worldwide manufacturer provides her with the global perspective needed in our channel world. Meg has been with CCI and our clients in the channel for three years, and has successfully managed the launch of several new and existing client sites to support various marketing and sales incentive programs. She lives in the San Francisco Bay Area with her husband, son, and small menagerie of cats and dogs.

Making the Leap to Cloud… How Are We Doing?

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What cropped up most often at Baptie & Company’s Channel Focus event in Miami last month, in almost every session, was the challenge of transforming channel partner communities to support the sale of cloud-based solutions. There were numerous sessions discussing how a vendor can help partners migrate to a model that’s so heavily focused on recurring revenues.

I speak to vendors every day who are looking for ways to enable a smooth transition to the new paradigm. There was no “silver bullet” presented at the conference—most of us are ‘playing it by ear’ to see what works best for our particular company and partners… but here are a few points to consider if your you’re grappling with this.

One of the most common ideas that many vendors are considering is a “hybrid” or transitional business model. This involves making an upfront payment to partners that close cloud deals. Most of the vendors I spoke with are considering a payment for the first 12 or 24 months of a customer contract up front. They follow that with payments for recurring revenue to be paid after that initial term is fulfilled for the lifetime of the customer engagement (similar to agent payments for insurance).

If your business is moving to a cloud-based model, you should also be reviewing your channel incentive programs. In a recurring revenue model, traditional channel programs such as Co-op, MDF, as well as rebates and sales incentives, will need to be evaluated and likely modified. Traditionally, these programs would “pay for performance” once a sale is made, but that model may not work well for the cloud-based transactions of the future.

In a recurring revenue model, lifecycle management and customer retention are the keys to profitability for both the vendor and the partner. Vendors may need to strategically realign their incentives throughout the sales cycle, providing rewards earlier in the sales process for certain activities, as well as ongoing incentives for customer satisfaction programs and activities.

So changes to our partner compensation models are inevitable. As the attendees of this conference confirmed, there will not be a “one size fits all” solution, and this is not a decision to be made hastily.

My suggestions?

Keep an eye on how “first movers” in your space have been approaching it.

Study how the telcos, the cable industry, and the insurance businesses incentivize their sales channels. They know a thing or two about recurring revenue!

Discuss your transitional plan with your Partner Advisory Council (if you have one), or at least send out a survey to your channel community for their feedback.

ABOUT THE AUTHOR

Michael Browning, Regional Business Manager at CCI
Michael brings 15+ years of experience in development of channel sales and marketing programs to CCI. His experience includes partner program development, strategic channel planning, and tactical implementation of channel sales, marketing, and enablement programs. His background includes leadership roles at both the reseller and the manufacturer level, bringing first-hand knowledge of best practices and issues from both sides of the channel.

Fresh Eyes on Channel Focus

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First off, I want to say how excited I am to join the CCI team as the new marketing director and host of the Channel Champion blog. I’m looking forward to connecting with all of you regularly in the future. So without further adieu, let’s jump in!

My first week on the job, I was lucky enough to attend the Channel Focus North America with Channel Focus Latin America 2013 conference in Miami. Another amazing Baptie event last week! If you’re a channel pro and haven’t attended this event, I can’t recommend it highly enough… in-depth sessions and workshops from the top channel experts and leaders in the world… our heads are still spinning with new insights and ideas. The yacht party wasn’t bad either! Here are some key themes and take-aways…

A central theme was channel transformation…we are at a tipping point right now with the rise of the cloud. Over the next few years, vendors will be under a lot of pressure to quickly evolve their ecosystems. Vendors know that this transition will be rocky and cost them some key relationships, which is the cause of a lot of underlying fear and uncertainty. How do they help get VARs through the lean first years of selling in the cloud while protecting their market share and revenue? Most vendors don’t have an iron-clad strategy for this and are “playing it by ear” to see what works best for them.

What does the “VAR of the future” look like? Most agree that they will be:

1. More adept at being a service provider in the mold of the insurance biz and less likely to know much about servers, etc.
2. Good at SSO and web services/API integration
3. More vertical industry expertise
4. Often “born in the cloud” with much less technical experience, so less focus on plumbing and more on biz outcomes
5. More skilled at selling outside of the IT department to Biz Unit heads

There was much discussion about “interim channel transition planning” for the next 3-5 year period, where partner incentives are set up to encourage a mixture of up-front and subscription business. After that, it’s ‘sink or swim.’ Some key interim approaches:

1. Partners setting up separate P&Ls for traditional and cloud businesses
2. Hybrid compensation models where partner reps get comped up front for the full first year of new cloud subscription accounts
3. New, creative approaches to incentives that target things beyond quarterly revenue: training milestones, using ‘new age’ marketing approaches, rewards for ongoing service quality/customer churn control

Recurring cloud vs. installed revenue models… there were many mentions of the need to educate partners on the ‘rule of 78s’. In a nutshell: what do you get in a year for selling one $1000 cloud deal per month… $12K? Nope, $78K. See http://www.phcconsulting.com/rule-of-78-chart.htm

Another key point was that channel solution agents and platform providers are offering more off-the-shelf, plug & play web API integration connectors with each other.

Rod Baptie presos are always a ‘must see’ and this year was no exception. He focused on the rapid rise of the telcos as a key channel:
– The telcos are increasingly offering cloud products and services
– Their channel understands recurring revenue
– Their channel sells billions of dollars today
– They want the cloud and IT resellers
– They have access to customers ─ millions of them

Steven Kellam of CCI shared the results of a very in-depth survey of both channel vendors and partners, looking at how each side views various channel challenges like training, engagement, incentives, and much more. There were many revealing insights into what we can all do better. Please email us if you’d like a copy!

ABOUT THE AUTHOR

Chris Becwar, Director of Marketing and Strategic Alliances at CCI
As the director of marketing and strategic alliances, Chris Becwar leads CCI’s marketing and operations strategies, expanding the partner ecosystem, and contributing to CCI’s consulting practice, which helps clients design, evaluate, and optimize their channel sales and marketing programs. Becwar’s experience spans leadership roles in product, marketing, channel, and alliances. A veteran of both start-up and large enterprise environments, he brings in-depth knowledge of successful global channel engagement in the B2B and B2C arenas.

Motivating Salespeople

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Motivating channel salespeople can be a tricky practice. You need the buy-in from key stakeholders at your partner (sales managers, executives, etc), who likely want the money for their business or for themselves. But rewarding salespeople is proven to drive results. So how can you effectively motive channel salespersons without enraging your partners themselves? Here are a few tips:

1. Understand what motivates. Most salespeople want cash, debit cards, travel, and merchandise. These are immediate, tangible rewards that reinforce the behavior of selling your product. Partner stakeholders (the smart ones) want money to invest towards growing their business.
2. Don’t cut corners. Don’t try to go around sales managers and stakeholders to reach the salesperson directly. The best route is the honest route; reach out to the sales manager and explain why you’d like to incentivize their salespeople. Ask, beg, even grovel for their approval, but by all means do not try to go around them; this ends poorly more often than not.
3. This isn’t an all or nothing game. Nothing says that you can’t motivate both parties. Let’s say you have $10,000 to spend on a partner this quarter. There’s no reason that this money can’t be divided amongst salespeople and partner organizations. You could run a $5,000 travel and merchandise SPIF for salespeople and approve $5,000 in MDF activities for the partner organization.

Lastly, remember that there isn’t a one-size-fits-all formula for motivating your channel partners and their salespeople. You’ll need to navigate carefully with your partners to figure out their interest levels, commitment to your products, and flexibility with your programs to craft the best programs for your channel.

ABOUT THE AUTHOR

Peter Hornberger, Business Development Associate at CCI
Peter is responsible for new business development and product demonstrations at CCI. Peter has experience managing MDF and incentive dollars for technology VARs and MSPs in the San Francisco Bay Area. His partner perspective provides a unique view on engaging partners and executing successful channel programs.

Downton Abbey – What has it got to do with the Channel?

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Season 3 of Downton Abbey is upon us, and I for one, am obsessed!  The times they are a-changin’:  The characters are falling into one of three camps; those clinging to the natural order of the world as they’ve always known it (Lord Grantham, his mother, Carson); those championing change (Lady Sybil, Branson, Isobel, Gwen); or those stuck somewhere in the middle (Mary, Anna).

Let’s look at the why this should be:

Both the Earl and his mother have their wealth and status to hold onto, of course. Carson, too. He derives his status from a lifetime investment in standards that are only important to the topmost echelons of society.  In their traditional worlds,  the ‘natural order of things’ is conveniently in their favor (or ‘favour’, if you will indulge me.)

Those stuck in the grey area have experienced upheaval and life-altering events, but long for the security that their cozy ecosystem provides.  Still, they push for what they want (Anna wants a married life with her true love Bates, whilst Mary longs for her inheritance and to preserve her home, yet self-sabotages her goals because of her rebellious and unconventional streak.) They both have something to lose, but perhaps even more to gain.

Finally there are the characters who have dispensed with their old lives and have never looked back – Sybil and Branson recognize that for them, the old ways simply don’t matter. Why? Because Branson has loved Sybil for years, and he doesn’t value the class structure of Burke’s Peerage.  Sybil has been forever changed by the war, having found purpose in her life as a nurse.  In other words, they everything to gain and very little to lose by forging ahead and shucking off their previous existences.

So what does this have to do with your Sales Channel?  I think the message is, what are your circumstances, and what have you got to gain or lose from change?  If your Channel strategy is mature and producing high yield (like an efficiently functioning country estate), don’t fix what isn’t broken.  However, if your Channel and programs are NOT placing you first in line to inherit untold riches, what have you got to lose?  Perhaps it’s time to question why you have a Co-Op program, when you’re your ideal partner profile is evolving to the MSP.  Perhaps instead of SPIFs for agents/reps who exceed their sales quotas, what you need is a Referral program that provides a high-value customer lifetime, and shortens your sales cycle, effectively lower your COGS.  Ask yourself, what have you got to lose by shaking things up a bit?

That will be all, Carson.  Thank you.

ABOUT THE AUTHOR

Meg Bingley, Regional Business Manager with CCI
After getting her start in media with a B2B marketing agency, Meg developed her expertise in marketing by creating, selling, and executing integrated marketing programs for Microsoft, HP, Seibel, Business Objects, Juniper Networks, Trend Micro, Symantec, and their respective marketing agencies for UBM (formerly CMP Media). Her experience with marketing communications for a worldwide manufacturer provides her with the global perspective needed in our channel world. Meg has been with CCI and our clients in the channel for three years, and has successfully managed the launch of several new and existing client sites to support various marketing and sales incentive programs. She lives in the San Francisco Bay Area with her husband, son, and small menagerie of cats and dogs.

Channel + Cloud = Engagement

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It is hard to have any discussion today without the term “Cloud Computing” popping up. It affects almost every area of a vendor’s go-to-market strategy. Everything from how vendors view partner enablement, scorecard partners, price products and services, even how to compensate their own sales forces. So when we find something interesting on this topic we like to share it. We have included a  link here to what we see as a strong series of video blogs on how the Cloud is effecting us all.

Presented by Channel Enablers, this is a four-part video blog series on Cloud Channel Engagement that has been created in conjunction with Robert Fuller, the foremost expert on cloud channels. From 2009 through 2011, Robert was VP Worldwide Channel Sales and Marketing at Rackspace Hosting, where he introduced a global channel program and was responsible for all aspects of sales, marketing and program management for the channel. He is now the President of Cycle Planning, a consultancy focused on enhancing all aspects of channel engagement within high technology companies, including Strategy Development, Sales, Marketing, and Program Development.

The first two videos are out now. You can find them at http://www.channelenablers.net/home/item/211-cloud-channel-engagement and on BrightTalk at https://www.brighttalk.com/webcast/8849/69013

ABOUT THE AUTHOR

Steven Kellam, Vice President of Sales and Marketing at CCI
As a growth specialist, Steven is responsible for CCI’s sales and marketing strategy and vision for today’s goals and objectives as well as positioning the organization for continued, long-term success. Steven has experience in both the VAR space, having run a successful Managed Services IT business, and  a background in Manufacturing where he built a channel of over 2,000 partners.

What to Look for in an International Channel Partner

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by Jennifer Solomon

Looking to expand internationally in 2013? Channel partners can be a great sales vehicle when expanding into new markets, since they are more knowledgeable about their territory. When looking for international channel partners there are several considerations. First of all, is your company prepared to support these partners with knowledgeable internal personnel and thorough material? Does your company offer a localized product for the region? Is there a strong pipeline in the target region? Are their native competitors? Once you have established that the region has potential for your product and that you have the means to support a channel partner you can focus on specifics.

I have found from past experience that smaller companies (with 5-20 employees) who represent a small product suite tend to be better channel partners. It is important the potential partner has experience selling a similar product and, better yet, knowledge of your products. You will want to understand the potential channel partner’s client base and reputation in the region. It is okay to ask for client references. It will give you some insight as to what it is like to work with this partner. Ask about their industry focus and the geographical regions they cover. What other services do they offer? As with domestic partners, you want to ensure they have a sales person dedicated to selling your product. If you are also looking for the partner to provide local technical support then you will need to ensure they have the proper staffing to do this as well. Training and consulting are other activities to consider. Lastly, ensure their main contacts speak good English unless you plan on hiring a dedicated channel manager that speaks their native language which I would not advise.

When entering into unfamiliar territories or if on-boarding international partners is not something you have experience with, there are resources to help. The United States government Commercial Services Department provides United States based companies a service called the “Gold Key Service”. It is actually quite reasonable. [http://www.trade.gov/cs/] The US Government has experienced personnel worldwide that can help with the recruitment process.

ABOUT THE AUTHOR
Jennifer Solomon has close to ten years experience in the software industry with companies such as Intel, Oracle, HumanConcepts (now SABA), and Bentley Systems, which includes over six years of channel management experience. Jennifer brings with her several years of international experience including working for Oracle’s EMEA Division in De Meern, The Netherlands and Browning-Ferris Industries Europe. She speaks fluent Spanish, Dutch, and basic German.

Deal Registration: Rewards for the Hunter!

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by Tamra Muir

One thing we can all agree on is that certain ‘hunting behaviors’ have their place in the channel and should be appropriately rewarded. A well-designed deal registration program with a system that partners find ‘user-friendly’ can be a valuable tool to properly motivate the hunters in your channel ecosystem and provide tremendous visibility and insight into the business.

There are a number of conditions that might cause you to implement a deal registration program. Here are a few for you to consider:

- Poaching complaints from partners:  Partner A complains that they did the solution selling and Partner B came in at the last minute and negotiated on price alone making the deal uncompetitive for Partner A.

- Poaching complaints about aggressive vendor sales reps:  Partner C complains that a hungry (but partner unfriendly) vendor sales rep they brought in on the deal later decided it just had to be a direct deal.

- Pipeline issues:  Visibility to pipeline is poor for the vendor and forecast accuracy levels are low but partners fear sharing deal details during the sales process. This is most notably experienced when the reward for sharing is zero/low and risk of poaching is high.

- Farming mentality:  Perception that partners are ‘farming’ not ‘hunting’ meaning they are just waiting for the phone to ring and not actively seeking new customers.

- Adding coverage:  A desire to undertake ecosystem expansion (like adding DMRs, e-Tail) or expanding product authorizations within the existing partner ecosystem. By adding additional partner types that make lower levels of investments and no mechanism like deal registration, there is the risk that existing partners with advanced certifications may be disadvantaged and could lower future focus/investment.

- Understanding total partner contributions: Partners that have tremendous influence on product use but are not actively engaged in fulfillment may not be recognized for their real contributions to the vendor business without a mechanism to register their activity.

- Reward-specific but limited behaviors:  Certain solutions that require advanced technical or sales skills may warrant focus and additional margin rewards.

A lot has changed in the channel over the past few years, but most of these business conditions have been issues for a couple of decades. Recent improvements in deal registration program parameters and tools make it easier to tackle these long-time business inhibitors.

ABOUT THE AUTHOR

Tamra Muir
Tamra provides consulting services to help IT companies improve their channel results. By formulating comprehensive channel go-to-market strategies using benchmarking to identify gaps in best practice, her focus is on driving improvements to partner programs that in turn deliver strong bottom line results.  She has an outstanding record of achievement distinguished by driving profitable channel expansion using her keen understanding of global channel business imperatives.  As a result of holding diverse leadership roles across the channel for nearly 20 years, she built a background across hardware and software vendors in sales, marketing and operations.  Her experience includes over 13 years with a global distributor as well as extensive channel work with both VAR and LAR/DMR. Utilizing an MBA and CPA, she spent a number of years building analytical skills by working in various accounting roles including Price Waterhouse Coopers. Tamra can be reached at tamramuir@earthlink.net.

Seeking the Holy Grail of Sales… Referrals

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It is a known fact that a sales lead resulting from a referral from one of your customers is one of the best leads you can get, and usually these have a very high close rate. The dilemma: how do you get more?

Many organizations rely almost exclusively on their sales teams or employees to solicit referrals from customers, partners, and affiliates. The most common technique is for managers to continually ask their salespeople to “get more referrals.” This usually results in a short-term push by the sales team to ask their current customers and prospects “Who do you know that could use our products/services?”  Frequently with very lukewarm results!  The response they usually get is something like “I can’t think of anyone right now, but if I do, I will certainly send them your way.” If your sales team is diligent in this effort, they typically will go through their customer list once, but rarely continue to follow up again during subsequent calls. So the initiative delivers a very low response rate, and the sales team returns  to prospecting using traditional methods without finding any new leads from your customers.

How often does your company go through this cycle? Sound too familiar?

Instead of placing the burden on your sales team to ask for the “Holy Grail” of sales leads, consider creating a programmatic approach to gather referrals from satisfied customers, partners, and others. These people would usually be happy to recommend your products and services to others, but they can’t think of anyone when your sales team asks them, and then they don’t think about it after the initial request was made.

Many organizations are successfully finding the “Holy Grail” by creating referral programs that reward customers, employees, partners, and others when they send a sales lead to you. The most successful programs are those that implement some form of incentive to the person sending the referral, either when a lead is submitted or when it is closed. This could be in the form of cash, debit cards, points, or another form of compensation.

To be successful, these programs can’t be a one-time event, but rather an ongoing program backed by marketing, communication, and, preferably, some form of electronic submission, such as a website, so your customers can easily send these referrals to you when they come across them. Using a website to submit and track the referrals allows you to continue to communicate to the people who sent you these leads to keep them up to date on the progress of their lead, send reminders about the program to keep it in the front of their mind, and, more importantly, to tell them that a sale closed so they know that they will be receiving the incentive for sending the referral.

A final word of caution, don’t expect a huge wave of leads when the program is launched. It will take time for the program to grow, and for people to participate and send leads. It is not their job to promote your business or products, but it is human nature to help others. So when they do come across someone who can benefit from your products or services they will likely tell them about it, especially if there is something in it for them! Then the leads will start to come, and you can start to reap the benefits of finding this “Holy Grail.”

ABOUT THE AUTHOR
Michael Browning, Senior Professional Services Consultant at CCI
Michael brings 15+ years of experience in development of channel sales and marketing programs to CCI. His experience includes partner program development, strategic channel planning, and tactical implementation of channel sales, marketing, and enablement programs. His background includes leadership roles at both the reseller and the manufacturer level, bringing first-hand knowledge of best practices and issues from both sides of the channel.

Are You Down With Social Media?

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While Social Media had been a great success in B2C, and many say is the next big thing in B2B, it can be a valuable tool in the B2B space now – if used strategically. The problem is that we too often see just the opposite. For many partners, success is frequently hit or miss without a plan in place for consistent and relevant updates. This results in sporadic postings that may or may not be engaging to the audience, and often go ignored. To make the most of social media, your partners need to develop a social media strategy and put together a plan to implement that strategy for the fiscal year.

So, let’s say that your partners have created a strategy. Don’t jump for joy yet – that was simply part (I). Now they need content – lots of it. The majority of your partners don’t have the staff resources to create the amount of content that is needed to really give them visibility and credibility among the hoards of blogs, networks, postings, etc. that are out there today.

This is where you come in as a vendor. Vendors have a unique opportunity to strengthen partner relationships and increase brand awareness through social media by providing content that partners can repurpose. While partners may not have enough staff to produce content, as a vendor, your broader resources allow you to generate strong content for partners that they can share with their customers through social media. The partner gains mind share with their customers and you benefit from increased brand reach and amplification of your message.

With the proliferation of social media, to the point of overwhelming, it’s easy to just “opt out” altogether. Many even make the argument that not engaging in social media is better that a haphazard approach. At CCI, we think that both are poor choices, and can even be harmful to your bottom line. It is possible to tame the social media beast and put it to work for you. With 30 years experience in channel management, CCI has the good fortune to have developed relationships with experts in many arenas, including social media. One such company, purechannelapps, has a couple of upcoming webinars that we recommend:

- February 14: Building the Social B-to-B Organization
- February 22: Social Media and Channel Marketing – Strategy and Best Practices

Another great resource on this topic is a recent guest blog by Richard Harris at Seagate – “Make Your Customers Rock Stars.”

ABOUT THE AUTHOR

Steven Kellam, Vice President of Sales and Marketing at CCI
As a growth specialist, Steven is responsible for CCI’s sales and marketing strategy and vision for today’s goals and objectives as well as positioning the organization for continued, long-term success. Steven has experience in both the VAR space, having run a successful Managed Services IT business, and  a background in Manufacturing where he built a channel of over 2,000 partners.