managing partners out of recession

Managing Partners out of Recession November 2008 1.0

© Foundation Network Ltd 2008 of 69 Corporate: www.foundation-network.com Product: www.relayware.com

“Get Your Indirect Channel to Lead You Out of

Recession”

A report from the World’s Leading PRM Specialists, Foundation Network

Introduction As most major global economies slide into recession over the next few months, many of us look to the last economic downturn and try to remember the lessons we learned back then. “What did I say that I would and would not do next time to ensure we can survive and even continue to grow?” It’s very easy at times like these for boards in our industry to decide to cut discretionary spending on marketing and revise IT spending plans to postpone expenditure. These are always the first things to face cuts and certainly they were during the last economic downturn. But these are precisely the budgets that should be maintained or bolstered because, as they say, behind every problem is an opportunity. The natural reaction to hunker down, baton down the hatches and ride out the storm presents those who resist it with opportunities to seize competitive advantage. We are seeing progressive companies in our own sector engaging in aggressive marketing activity and positioning investments in technology as a means of driving growth whilst reducing costs and improving efficiency. What is more this is precisely the time for companies themselves to consider investments in technology to automate and simplify business processes, to improve productivity and reduce headcount costs. In essence then now is precisely the time to make selected investment in developing and implementing strategies to ensure that your business outperforms your competition during the downturn and is best placed to come out of the recession in a market leading position. Clearly then, companies should be looking to make good the investments already made in their CRM strategies. But what of the majority of businesses amongst us that go to market through an indirect sales channel? That sales channel is experiencing exactly the same fears, doubts and financial constraints as their vendors and at times like these they are looking to those vendors to show leadership and provide support. In this report, we will cover a ten step plan for implementing a recession-busting partner relationship management strategy that will drive indirect channel top and bottom-line growth and prepare adopters for market leadership as the economy recovers.



Contents

“Get Your Indirect Channel to Lead You Out of Recession” _________________________________ 1

A report from the World’s Leading PRM Specialists, Foundation Network _____________________ 1

Introduction _________________________________________________________________________ 1

Partner Relationship Management and the Partner Lifecycle _________________________________ 6

Contents ____________________________________________________________________________ 2

Chapter 1: Partner Selection and Segmentation ___________________________________________ 8

Introduction: Knowledge is Power ______________________________________________________ 8

Choose Your Friends Carefully __________________________________________________ 8

Partner Selection ____________________________________________________________________ 9

Chapter 2: Segmentation & Accreditation _______________________________________________ 11

Chapter 3: Partner Recruitment _______________________________________________________ 14

What’s in it for Me? _________________________________________________________________ 14

The Recruitment Campaign ___________________________________________________________ 15

Recruitment Process ________________________________________________________________ 17

Is Recruitment the Right Answer? ______________________________________________________ 18

Cause and Effect ___________________________________________________________ 18

Recruitment Versus Development ______________________________________________________ 19

Summary _________________________________________________________________________ 20

Chapter 4: Partner Enablement, Education and Development _______________________________ 21

Introduction _______________________________________________________________________ 21

Market Making ____________________________________________________________________ 21

Fulfillment ________________________________________________________________________ 22

Summary _________________________________________________________________________ 24

Step 5. Partner Motivation and Incentivization ___________________________________________ 25

Introduction _______________________________________________________________________ 25

Being the Vendor of Choice ___________________________________________________________ 26

Show Me the Money _________________________________________________________________ 28



Summary _________________________________________________________________________ 29

Chapter 6: Partner Collaboration ______________________________________________________ 29

Proven Methods ____________________________________________________________________ 29

Lead Management Programs _________________________________________________________ 30

Deal Registration Programs __________________________________________________________ 32

Joint Marketing ____________________________________________________________________ 32

Market Development Funds or MDF ___________________________________________________ 33

The New Wave: Collaboration Across The Partner Ecosystem _______________________________ 34

Chapter 7: Partner Communications ___________________________________________________ 36

Communication Strategy _____________________________________________________________ 36

Communication Objectives ___________________________________________________________ 37

Selection and Segmentation of Receivers ________________________________________________ 37

Medium __________________________________________________________________________ 38

Message __________________________________________________________________________ 39

Syntax and Semantics _______________________________________________________ 39 Call to Action ______________________________________________________________ 40

Response _________________________________________________________________________ 41

Repetition and Frequency ____________________________________________________________ 41

Summary _________________________________________________________________________ 42

Chapter 8: Partner Service and Support _________________________________________________ 43

Partner Segmentation Versus Quality of Service __________________________________________ 43

Delivering High Quality Service and Support to “Managed Accounts” _________________________ 44

Account & Contact Management _______________________________________________ 44 Activity Management ________________________________________________________ 44 Partner Management ________________________________________________________ 44 Partner Portal ______________________________________________________________ 45 Lead & Deal Management ____________________________________________________ 45 Opportunity Management ____________________________________________________ 45 Sales Forecasting ___________________________________________________________ 45 Data Quality Management ____________________________________________________ 45 Document Management ______________________________________________________ 45 Contract Management _______________________________________________________ 46 Basic email Marketing and Communications ______________________________________ 46 Sales Out Data _____________________________________________________________ 46 Reporting Tools and Dashboards_______________________________________________ 46



Delivering High Quality Service and Support to “Unmanaged” or Tier 3 Accounts _______________ 47

Portal Accessibility __________________________________________________________ 47 Portal Functionality__________________________________________________________ 48 ‘Remember Me’ Functionality __________________________________________________ 48

Partner Relationship Management Functionality __________________________________________ 48

Self-Profiling _______________________________________________________________ 48 Lead Management __________________________________________________________ 49 Deal Registration ___________________________________________________________ 49 Online Learning and Certification ______________________________________________ 49 Incentives Programs ________________________________________________________ 49 Special Bid Support _________________________________________________________ 49 Partner Locator _____________________________________________________________ 50

Content __________________________________________________________________________ 50

Product Services Catalogue / Product and Services Collateral ________________________ 50 Price lists _________________________________________________________________ 50 Amount of Text on Page and Page Download Size _________________________________ 50 User Specific Content ________________________________________________________ 50

Partner Registration ________________________________________________________________ 50

Approvals Process __________________________________________________________ 51 Registration Incentives ______________________________________________________ 51

Security __________________________________________________________________________ 51

HTTPS ____________________________________________________________________ 51 Password Strength __________________________________________________________ 51

Legal ____________________________________________________________________________ 51

Disclaimer / Privacy Statement / Terms and Conditions ____________________________ 51

Partner Service and Support in the Age of Social Networking ________________________________ 51

Summary _________________________________________________________________________ 52

Chapter 9: Partner Performance Management ___________________________________________ 53

Introduction _______________________________________________________________________ 53

Definition _________________________________________________________________________ 53

Setting Performance Targets __________________________________________________________ 54

Performance Measurement ___________________________________________________________ 55

Balanced Scorecarding ______________________________________________________________ 56

Balanced Scorecarding for Indirect Channels _____________________________________ 57 Purpose of Scorecarding for Indirect Channels ____________________________________ 57 Practical Applications of Partner Balanced Scorecarding ____________________________ 58 Automated Partner Balanced Scorecarding with PRM ______________________________ 60 Alternative Methods of Partner Balanced Scorecarding _____________________________ 60

Summary _________________________________________________________________________ 63



Chapter 10: Partner Performance Optimization __________________________________________ 65

Optimizing and Rewarding Performance ________________________________________________ 65

Summary __________________________________________________________________________ 68



Partner Relationship Management and the Partner Lifecycle Indirect sales now account for as much as 70% of global business – and the internet is largely responsible for this explosive growth. Instead of heralding the end of indirect channel business, the internet has in fact provided a global network for indirect sales. It’s a complicated environment that can be difficult and expensive to manage:

Fig 1: The Complexity of Modern Indirect Channels to Market

Partner activities are often carried out in a piece-meal fashion, consuming substantial resources with relatively little payback in terms of partner loyalty or end-user sales. As a result, companies have begun to realize that they need an integrated, cohesive relationship management strategy and supporting infrastructure for their channel partners as well as for their customers – hence Partner Relationship Management, or PRM. This can only be achieved by understanding the unique and complex needs of an indirect channel business, and by implementing the strategies, processes and systems to meet those needs. In today’s internet environment, this is largely to do with increasingly effective communication, collaboration and information management throughout the partner lifecycle:



Fig 2: Foundation Network’s Partner Lifecycle Model

Foundation Network helps vendors to make this happen with RelayWare, our PRM application but in the following chapters, we will examine more broadly how companies can effectively execute a partner relationship management strategy throughout the lifecycle regardless of technology platform.



Chapter 1: Partner Selection and Segmentation

Introduction: Knowledge is Power Whilst there are many factors influencing the success (or otherwise) of a partner strategy, a common theme is a lack of data upon which to base key business decisions. If you lack essential information about your actual and potential partner network or ‘channel’ to market:

� Name and address

� Key contact information

� Company size

� Target markets

� Geographical coverage

� Products, services and solutions offered to name but a few, it will be impossible for you to begin to formulate a cohesive partner program that will fully leverage the capabilities of your channel and help you to deliver on your business goals. Yet time and time again, we encounter vendors trying to do just that. Even when such data does exist, vendors are often restricted by the lack of accessibility to and holistic visibility of the data for the people in that organization that need it because the data rarely resides in one place and in a consistent format. Putting information at the heart of your partner strategy – and developing the right combination of reliable systems, processes and procedures to capture, manage, share and utilize that data – will allow you to:

� Recruit and retain the right partners more easily

� Communicate with them effectively

� Support them to a highest standard at the lowest possible cost

� Manage them to ensure that you achieve your business goals.

Choose Your Friends Carefully

If you fail to adopt a disciplined approach to selecting, recruiting, segmenting and engaging partners, much of the rest of your efforts to work together will be wasted in trying to form relationships with organizations who cannot or will not ever sell or market effectively on your behalf.



Partner Selection All too often, vendors choose their partners based upon small amounts of data that can be easily accessed, or make attempts to gather more detailed information in a haphazard way using mostly manual methods. The result is that important clues about why certain companies are unlikely to make good partners are missed – and more importantly, vendors fail to discover some companies who could become some of their most successful partners. The first step in developing your channel strategy is to ensure that you have a clear understanding of your existing go-to-market strategy. This seems obvious. But ask yourself;

� What are our target markets – geographic, product, horizontal and vertical?

� Who are our target customers – who benefits from our products and services, what size and type are they?

� What kind of channel addresses these customers and markets and offers the kind of product and services they want to buy?

� What products and services do we have that will address the needs of the customers and markets and which will appeal to the channels that service them?

� What are our value propositions to both customer and channel? Answering these simple questions will lead you to the right channels and help define your partner selection and recruitment strategy by establishing your selection criteria. Many vendors mistakenly assume they know who the ideal partners are, based upon local knowledge and ‘gut feel’. Whilst this approach may work on a local scale it cannot succeed as a basis for a regional or global strategy. To get a complete picture of your potential partner landscape, there is no substitute for detailed research, data pooling and if necessary data acquisition. Before you start, decide what kind of information you will need to know about each partner in order to:

� Assess their suitability for partnership (your selection criteria)

� Benchmark them against their peers

� Communicate with them when the time is right Pull together as much data as possible from internal sources on as many existing and potential partners as possible. Leave no stone unturned. Draw from your marketing databases, contact lists, ERP, SCM, LMS, SFA and CRM systems and create a single central repository in which to store your partner data. When you have exhausted all internal sources, approach a data specialist with a very tight brief. Ask the provider to map the data you already have against the total data they have available ensuring that you are , supplementing your existing data rather than replacing it with exactly the same companies - at your expense. Most importantly, ensure that you acquire current contact



information on key personnel – understand who you can’t sell to, market to or recruit through, simply choosing the management and employees right for you. Don’t be surprised if the partners you subsequently select are very different from the partners you have now. Most vendors outgrow their partner network as their go-to-market strategy evolves. Remember, partners don’t always evolve at the same pace or in the same direction as their vendors. Yet few vendors have the patience or nerve to invest in partner development or reselection. History offers many examples of vendors who have found a very real and urgent need to find alternative channels to market. Note that when Sony launched the Vaio PC range, its traditional retail channel offered it no route to the business users to whom the product appealed. Similarly, Apple’s global chain of Apple Center’s had little to offer the vendor in taking the iPod to market. Above all, start with defining what you need to know to achieve your goal of partner selection, create a single data repository with a consistent data structure that meets your current and your future needs. The resultant partner database should be accessible as a business tool by all those in your company who will need to interact with your partner network. It is important also that you develop a strategy and a methodology for maintaining the data’s currency such that it continues to be fit for purpose. As we shall see later, CRM systems seem like the obvious choice but beware! Think about what you intend to do with the database once you have built it and then decide whether a CRM system will be flexible enough to support the complexity of an

indirect route to market.



Chapter 2: Segmentation & Accreditation Using an accreditation scheme to segment a partner network or partner channel has been the norm for two decades but just because accreditation is the accepted approach does not mean that it is right for every vendor. Before you consider it, ask yourself a few questions:

� What is my objective?

� Do I want to maximize the number of partners I recruit?

� Conversely, do I want to recruit and retain only those partners who meet stringent criteria?

� At what stage in the technology lifecycle is my product?

� What do I want to measure and can I measure it?

� Can I monitor and manage an accreditation program?

� In who’s best interest is an accreditation program – ours, the customers or the partners?

� What would compel partners to join a program?

� What commitments will I require in return? Accreditation programs are typically unappealing to mainstream channels because they require investment to participate and generally deliver limited rewards. In contrast, value added channels keenly embrace them because they provide a means of specialization and differentiation. But specialization is the key here. VAR channels don’t want to maintain multiple accreditations unless they are complementary. It is therefore important to understand your objectives in developing and implementing such a program. Any product’s lifecycle can be visualized using with the following: Innovators

Early Adopters

Early Majority

Late Majority

Laggards Fig 3: The Product Lifecycle

During the formative stages, through launch and the early adopter phase, a vendor will typically sell direct or else seek to use a specialist, value added partner network or channel to help introduce the product into the mainstream. It is during this phase that an accreditation program is of most value because it provides a framework for an ‘exclusive’ partner program. Such a program strives to recruit and retain only a relatively small number of specialists. By excluding mainstream partners from gaining access to and selling the product it encourages and protect their investment in winning and retaining their accreditation. As the market’s familiarity with the underlying technology grows and the product or underlying technology begins to enter the main



stream, a more ‘inclusive’ partner strategy is needed to drive widespread adoption and higher sales volumes. By contrast, if your product and / or its underlying technology has already reached maturity then an accreditation program will typically be unappealing to the channel required to sell it in volume and may indeed act as a barrier to entry for your target channels. If your product or underlying technology is at the beginning of or early in it’s lifecycle, you may want to seriously consider introducing an accreditation program to segment your partner network or channel. If, on the other hand your product is already mainstream or can be described as a ‘commodity’ then accreditation programs should be avoided. If your partner network or channel needs no special knowledge or skills to sell your product beyond that which might ordinarily be expected of such a channel then the chances are that accreditation will only serve to reduce your potential sales. If accreditation seems like the right approach, take a pragmatic approach to defining the criteria:

� What knowledge, skills, facilities etc. are actually required?

� Will accreditation be awarded based upon quantitative or qualitative criteria or both?

� What exactly will I measure?

� Do I have the necessary information and if so, how will I analyze it?

� How will I administer and manage the program?

� How will we play our part in supporting the channel to maintain their accreditation?

� What will happen to defaulters?

� What are the rewards for retention?

� Do I have the systems, processes and resources to manage the program? The first rule is ‘don’t set criteria that are not absolutely necessary’. If your channel can see no point in your criteria and they have no knock-on benefits to the customer, then your channel will be less inclined to try to achieve them. The next point is very subjective. But my view is that revenue, volume and unit sales targets sit rather uncomfortably alongside value-based accreditation criteria. Accreditation schemes that start out with conflicts of interest rarely succeed and in my experience the need to achieve quarterly revenue targets often outweighs the need to maintain the credibility and respectability of an accreditation program! It is important to ensure that criteria can be accurately and consistently measured and properly audited. You must be in possession of all of the data required to award an accreditation. Judgments should be based upon tangible data sourced from reputable sources and filed and managed in a consistent way. As a general rule, data that can be sourced from and verified upon internal systems and data sources is more reliable than data that is sourced from third party sources especially the channel partners themselves.



By now, many companies will be thinking ‘the only irrefutable data I have relates to sales results and numbers of trained personnel’ and it is for this reason that most vendors often distil their accreditation scheme criteria down to these two factors. Beware, if an accreditation scheme is to be truly valued by partners and customers alike and if it is to deliver results, you must be much more thorough. A tried-and-tested approach for value-based partner segmentation is based upon the balanced scorecard method. Using this approach, you can identify all of the criteria both quantitative and qualitative and assign them scores and weightings that reflect their importance,scoring each partner or potential partner accordingly. The balanced scorecard approach works well in two different scenarios:

1. When relatively small numbers of partners are involved and hence the process can be managed adequately using manual methods

2. When larger numbers of partners are involved and a PRM system is deployed to conduct automate analysis

Both scenarios require good data sourced from a variety of places:

� Your transactional or ERP systems

� Contact databases used by marketing staff to distribute channel marketing communications

� Contact management systems used by channel account managers

� Training or learning management systems

� Technical support systems

� External sources such as data vendors, industry directories and trade show catalogues Input from these various sources needs to be brought together into a single repository and one must ensure that it is both accurate, consistent and uniform. When these conditions are met, you can scorecard your partners. This is but the beginning. Establishing multiple measurement criteria creates a need for repetition and continual validation. This is complex to manage and nowhere will this complexity be felt more than in the areas of fulfillment and administration. Before embarking on this route, ask yourself:

� Who will transfer the knowledge to your partners to the level you require?

� Who will monitor and manage accreditation criteria attainment across your channel?

� What systems processes and supporting resources will be made available to them to do it?

� How will you manage education, examination and certification?



� How will you manage certification expiry? How will you punish defaulters? And what of those partners who do maintain their accreditation. Who do everything that is asked of them? How will you reward them? How will you protect their investment? How will you support them to maintain their accreditation? And how will you manage with those who create demand for you without actually fulfilling it? After all, many companies have the expertise and customer relationships to influence buying decisions and yet they have no interest in actually supplying the customer with the solution. Your accreditation scheme must be sufficiently robust and flexible to cater for such partners for which revenue criteria and product margin will be completely irrelevant and counter-productive. Partner segmentation through accreditation is a proven and successful method of targeting a suitably qualified partner network or channel but only if your product is in the right phase of its lifecycle. Exclusive models such as this will deter volume channels from selling mainstream products if alternatives exist in the market. For value added channels selling early-life, specialist or low volume/high value products, accreditation can work well depending on the approach to effective administration and management of data, systems, processes and resources that exist to implement such a program.

Chapter 3: Partner Recruitment In the previous chapters, we examined methodologies for identifying the attributes of suitable partners and for segmenting those partners into the most appropriate groups. Now it is time to get those partners on board.

What’s in it for Me? Many vendors now throw together a few deliverables that are cheap and easy to deliver and dress them with a logo and a brand name. This was fine in the days when the market was less crowded, less competitive and when vendors could differentiate themselves through their unique technology. But in the age of technology commoditization and convergence, most lack the means to compel their channel partners to work with them simply because their product was the best or the only available. Today, partner programs themselves have to be the differentiator and through them, a vendor needs to convey actions as well as words that motivate channel partners to work with them rather than their competitors. But what do channel partners want to hear? In essence:

� You will develop technology that is superior to your competitors



� You will create a desire within your mutual customers to buy new technology or upgrade from existing technologies

� You will invest in demand generation

� You will make customers receptive to buying your products and your brand

� You will direct customers to your channel partners

� You will direct your channel partners to potential customers

� You will minimize channel conflict

� You will provide the necessary information, education, tools and resources to assist your channel partners in marketing, selling and if necessary supporting your products

� You will ensure that the sale of your products will prove to a be a profitable enterprise

� You will make it easy for channel partners to augment your product offering with complementary products and value added services

� Your will ensure that your products deliver on their promise, that they are reliable and encourage repeat purchases

� You will, throughout be easy to do business with and treat your channel partners with integrity and respect

Many of these expectations depend on having great products but if you get the other elements right and implement them better than your competitors, it is entirely possible to have inferior products but a far more dedicated and motivated channel than they do. We will discuss best practice in partner program deliverables later in the series but at this point, there are two important principles to remember:

� The best recruitment campaign in the world will fail if your partner program is not compelling

� The notion of ‘build it and they will come’ – having the best program but failing to market it and proactively and systematically drive recruitment will also fail

The Recruitment Campaign You would not set out to recruit a sales person or marketer without first documenting the following:

� For what purpose is the role being created?

� What is the context for the appointment?

� What are the goals, fiscal or otherwise of the individual to be hired?



� What resources will be made available to the individual to assist them in achieving their goals?

� Which markets or customer segments should they be targeted upon?

� To whom do they report?

� How will their performance be monitored and reviewed?

� How will good performance be rewarded and poor performance be punished?

� What compensation and benefits will be given?

� By what contractual obligations will employer and employee be bound?

� Why should the candidate join you instead of another company? You would also establish a candidate profile and a brief to the recruiter. Similarly, you should not embark on a partner recruitment campaign without ensuring that you are crystal clear on all of these points:

� Why are you looking to recruit new partners?

� What does it mean for the partners you already have?

� What is the context for the campaign?

� What do you want your new partners to do for you?

� What targets will be set, if any?

� How will you establish joint business plans and ensure they are implemented?

� What resources will be made available to new partners to assist them in achieving your shared goals?

� Which markets or customer segments should they be targeted upon?

� How will the partner make profit from the relationship and how much?

� What other benefits are on offer?

� Who will be responsible for managing the relationship? Who or what will be their point of contact?

� How will their performance be monitored and reviewed?

� How will good performance be rewarded and poor performance be punished?

� By what contractual obligations will vendor and partner be bound?

� What makes your package of offerings better than any other vendor with whom you are competing for the partner’s attention?

Ultimately, your aim is the same – to recruit the best channel partner organizations, sales people and marketers to work, albeit indirectly for you to help you to take your products to market at the expense and exclusion of your competition. If you think of it this way, your recruitment



campaign will proceed with greater vigor and purpose and both you and your potential ‘candidates’ will have a much clearer understanding of your objectives.

Recruitment Process Whether you adopt the ‘big bang’ approach of launching a new partner program with accompanying PR campaign or the more low-key approach of augmenting your existing partner-base as part of your existing program, it is important to preface any communications with messages reinforcing the points above. You must set the context of the recruitment, why you are doing it, what it will mean for you, what it will mean for existing partners and most importantly what it will mean for and how it will benefit your target partners. Putting the actual marketing communications activities to one side; we will deal with them in later section, let’s turn our attention to creating a low cost and efficient means of inviting partners to join you and processing their applications. Email is now the defacto standard communication medium but it is also statistically weak in generating responses. Spam filters and security software have exacerbated the problem. You must also remember that in order to have whole companies to partner with you, you must start by recruiting individuals – company’s don’t form relationships with other companies – people do that! It is essential therefore that you gather accurate contact information; names, job roles email etc of you are to target the right people with the right message. We discussed this in earlier sections of this document but here it is critical. Sales people will have different motivations to join your program to those of a marketer or support person. You must play to these motivations effectively in your communications if you are to succeed in making your campaign above average in terms of response. This means that you will need to engage in targeted and personalized campaigns segmented by organization type, market focus type, job role type and so on – communicating multiple value propositions to each. This takes time and effort but the results will be worthwhile. The email or other contact should direct the individual ideally to an online registration point within which you can gather more information about them and populate and enrich your database whilst ascertaining if your judgment in inviting them to join you was correct. The same registration point must be available via your corporate website to catch stray applicants that you may not have invited or who missed your recruitment campaign first time around. Since by now you will have devised your partner selection and segmentation criteria, you may now begin the process of mapping applicants against them and either approving or rejecting their application. This can be an arduous and time consuming task best automated especially if your campaign has been broad. Needless to say, ensure you have the necessary systems and/or business processes in place before you begin. Finally, make sure that your response to applicants is immediate or at the very least prompt, that they are enrolled as soon as possible and that you begin to communicate with them straight



away reinforcing the program value propositions and backing them up with a ‘quick-start plan’ to move your new partners on to the next stage.

Is Recruitment the Right Answer? Recent research conducted by Aberdeen Group amongst technology vendors suggests that 52% of the best in class vendors are implementing strategies for partner recruitment. 38% are focused on growing business through existing partners and only 28% have a strategy for empowering their most successful partners. This appears to indicate a prevailing assumption that runs counter to recognized go-to-market best practice, this being that new partner acquisition is more important than nurturing and developing the partners with whom you already have a relationship. In working with vendors closely over the years, we have seen a great deal of evidence of this pre-occupation with partner recruitment. Whilst continuous recruitment is important, this approach ignores the basic principle that it is far easier and arguably more important to retain, develop and leverage existing business relationships, whether customers or partners than it is to create new ones. To understand this behavior, one needs to recognise that effective partner development and performance optimisation relies heavily upon a high degree of partner intelligence and intimacy. The truth is that many vendors with large, typically two-tier indirect channels don’t know or don’t care about 80% of their partner community. The second and very crucial factor is that partner recruitment is comparatively easy to do, results can be immediate, easily quantifiable and implementation relies upon basic marketing principles. Meanwhile holistic partner relationship management is complex and requires different skills, expertise, infrastructure and business processes.

Cause and Effect Many vendors have accreditation programs which they use to determine benefit allocation, pricing and to create a hierarchy. On paper most programs look good. Upon closer examination however, it is clear to see both the thinking behind them and also the behavior that they cause inside the vendor and amongst the partner community.



Fig X: The ‘Accreditation Effect’ Typically vendors generate more than 80% of their sales through less than 20% of their partner base. This is Pareto’s Law and is the same the whole world over. What is different in our industry is that it is not uncommon to see anything up to 95% of vendor sales coming from as little as 5% of the partner base. Given this information, one could draw a couple of conclusions:

1. The top partners are exceptionally large, exceptionally good or they’re selling exclusively for the vendor.

2. The rest are exceptionally small, exceptionally bad or they’re selling for the competition. Or perhaps, could it be that the vendor has failed to exploit the potential of the vast majority of their partner community? Regardless, when pressure mounts on vendor channel professionals to grow channel revenues, the easy option is always to recruit rather than develop in the hope of finding a few more ‘Gold’ partners to perpetuate the model.

Recruitment Versus Development Whether one believes that partner recruitment is the answer or not, partner programs whether new or re-launched must involve partner recruitment. Before embarking on a recruitment campaign, vendors must plan for the aftermath. All too often channel partners tell me the same thing: “The vendor spent a great deal of time, effort and money recruiting me and then…nothing!” This is important because unless a vendor has a partner relationship management strategy and the means to implement it, they lack the capability to manage the partner lifecycle. If you fail to



work with a new partner throughout the lifecycle, they will rarely perform well and most will join the 80% - your under-achievers. Thus in twelve months time, you will be recruiting again. Trying to find a handful of potential top performers can be like trying to find a needle in a haystack and if you know about them already, the chances are they will be working with the competition and will be hard to convert. Whilst there are many factors influencing the success (or otherwise) of a partner strategy, a common theme is a lack of data upon which to base key business decisions. Many vendors simply do not have enough intelligence on their partners and if a vendor lacks essential information about their actual and potential partner network, it will be impossible for them to begin to formulate a cohesive partner program that will facilitate the partner lifecycle and fully leverage the partners’ capabilities. Yet time and time again, we encounter vendors trying to do just that. Even when such data does exist, vendors are often restricted by the lack of accessibility to and holistic visibility of the data for the people in that organization who need it because the data rarely resides in one place and in a consistent format. For a vendor, putting information at the heart of their partner strategy – and developing the right combination of reliable systems, processes and procedures to capture, manage, share and utilise that data – will allow them to:

� Recruit and retain the right partners more easily

� Communicate and build relationships with them more effectively

� Develop them to their true potential

� Support them to a highest standard at the lowest possible cost

� Manage them to ensure that business goals are achieved.

Summary Partner recruitment is one way to grow channel revenues but in my experience, it is only the first step. Unless starting out from scratch or recruiting a channel to market a new product or service that is beyond your current channel, vendors should instead focus on partner development and enablement through the implementation of a holistic partner relationship management strategy that supports the partner lifecycle. If vendors got these things right with their existing partners, they might not need to recruit new ones after all.



Chapter 4: Partner Enablement, Education and

Development

Introduction So now you have successfully recruited your preferred channel partners. Now you have to educate and develop their staff – sales, marketing and technical – to sell market and support your products more effectively and ideally to the exclusion of competitive products. You must provide them with the skills and knowledge to adequately perform the functions you had in mind for them when you recruited them. If your product is mature and advanced in its lifecycle or one that has become a commodity, then you must at the very least impart basic product knowledge and feature differentiators versus your competitors. If, however, your product is earlier in its lifecycle or you require your channel to assist you in developing the market for it, then you will be required to provide them with much more. Because the approaches for partner enablement differ so much according to the nature of the product being sold, we will examine these two scenarios separately.

Market Making It is my experience that unless a channel can be motivated to create or develop a market for a vendor through the adoption of a highly restricted distribution model, higher margins or other incentives, they would typically prefer to leave this task to the vendor then be ready to fulfill the demand. The challenge for the vendor here is that amongst the channels’ greatest assets are its proximity to, relationship with and influence over the purchasing decisions of their customers. Hence it is difficult for a vendor to convince customers that they need to invest in the latest technology by means of conventional marketing activity alone. The big vendors fair better here as they often benefit from direct-touch relationships with key accounts. The rest, however, must educate their channel partners to the same level as they might educate their own staff. The purpose of this step is not to discuss training content or methodology; this is neither our expertise nor intention. Rather it is to share what we see as best practice in general execution of this component of the partner lifecycle and the programs that address it. For example, let’s look first at training delivery for ‘market makers’. Ten years ago, almost all training was delivered face-to-face in a classroom environment. Today computer-based or online training delivery has superseded this for all but specialist technical training. It’s easy to see why:

� Online training delivery has improved in variety, quality and accessibility

� Users are now well accustomed to using computers and the internet for accessing multimedia entertainment and information



� Specialist content and test creation software has become easier to obtain and use and increased competition in the market has driven down the costs

� Few vendors can now afford to operate in-house training functions or outsource to 3rd parties

� Product lifecycles have become ever shorter meaning that training frequency has necessarily increased

� Online delivery offers the flexibility and convenience of language, time and place In summary, it’s easier, cheaper, more convenient and more accepted today. Leading vendors integrate e-learning functionality with their partner portals through the use of PRM software to deliver and manage complex and frequently changing training programs in multiple languages at any time and in any place. Others utilize conventional Learning Management Systems (LMS’s) primarily designed for internal training delivery although these often have significant limitations for external programs. A critical component is verification of participation and knowledge transfer. Several excellent content creation tools exist which not only generate the courseware but also the testing materials. This facilitates online testing with questions in a wide variety of formats. When implemented in conjunction with an LMS or PRM system, this will allow a vendor to track training participation, measure personal learning performance and test results and aggregate these by individual to contribute towards personal certification and, where this impacts company accreditation to manage this also. Of course, such analysis can be extremely time consuming if managed manually. We would advocate some form of automation if you have any significant number of partners. However, testing, certification and accreditation are excellent tools and incentives to encourage partners to learn to sell, market and support for you during the market-making phase. What is more, if they are a prerequisite for being able to perform these roles at all and meeting such criteria is commercially viable for the partners given the opportunities on offer then they will represent incentive enough to drive partners to participate in your training program. If the numbers don’t add up, then you may additionally need to consider some of the methods detailed in the next section.

Fulfillment Where your channel is selling a volume product which is more mature, which has become a commodity or has multiple competitors, one has to take a very different approach to imparting knowledge. In this scenario, channel partners often merely fulfill demand from their customers ie. They sell what the customer wants to buy, they sell what they have in stock, or else they sell what they know best. This presents a vendor with some challenges. Principally, how to encourage partner staff to take valuable time to train on your product when:



� Selling it does not represent an incremental sales or margin opportunity

� They already understand the basic concepts of the product without your help

� They already know about and perhaps sell your competitors product

� The product may have a low unit value

� They don’t currently sell or stock it

� The margins or incentives to sell competitor products are more attractive than yours

� Your demand generation activities do not generate enough ‘pull’ from their customers In this scenario, conventional online training is not attractive to channel partners and whilst you may develop the most compelling training program with the most attractive and entertaining Flash multimedia courseware, time and time again, I have seen vendors fail to attract delegates. You have to try much harder and you must give them a compelling reason to take the time to learn about your products. Fortunately, I have also seen some very successful programs in which vendors use every trick in the book to drive partner traffic to the training section of their partner portal. The main methods are:

� Closed-loop marketing of product lifecycle events eg. launch or refresh tied to portal pages containing passive learning materials

� Personal incentives – cash, voucher or gift – linked to both sales performance and points earned through training participation

� Company incentives – rebates, margin or MDF linked to both sales performance and numbers of trained staff

� Company or personal inclusion within lead generation program Yes, this amounts to bribery! But I can assure you that no partner training program related to commodity products will succeed unless the partner can clearly see some tangible business or ideally personal benefit associated with participating in it. Also critical to your success is understanding your audience. Sales people in particular will rapidly lose interest if:

� Accessing the training requires them to remember multiple login details and passwords

� They need any cookies, ActiveX controls or other widgets to be installed on their PC first

� The training courses are boring

� The training course are too long

� They can’t take a break and return later from where they left off



� They are not informed of their progress through the course on an ongoing basis eg. ‘you are now on page 3 of 5’

� They have to sit a test for no clear reason

� The test is too difficult to pass easily My advice is to keep it simple – Inform and Reward. And do these things in a way in which they will be appealing to your audience. Of course, addressing all of these needs and preparing the very best content is of no use if you lack the ability to track who attended which training module, at what time, did they complete the training and whether sales increased as a result.

Summary In my view, channel enablement, training and development is one of the most impactful elements of a partner program and yet one of the least well executed by vendors. This is largely because:

� They lack an understanding of their target audience’s behaviors, preferences and needs

� They forget that channel partners largely don’t naturally want or need to be trained by the vendor to do their job and earn a living

� They fail to provide a suitable delivery medium

� They are unable to effectively test or validate training participation or knowledge transfer

� They cannot translate training participation into certification and accreditation

� They fail to incentivize or reward partners for training

� They do not link training-related incentives into program-wide individual or company incentive schemes

� They lack the necessary infrastructure and systems to execute effectively and efficiently It should come as no surprise that I say that point (8) is as critical to your success as it currently is to the failure of most vendors in this area. Automation facilitates the simplification of the complex and partner enablement is inherently complex yet incredibly rewarding if done well.



Step 5. Partner Motivation and Incentivization

Introduction Sales people sell for many reasons; their innate competitiveness, their desire to be the best, a need to gain approval from their management and peers and their appetite for career advancement all play a part. But by far the greatest driver of sales activity is financial compensation and benefits. Hence when a vendor employs a direct sales force, motivation is a relatively straightforward affair:

� Pay a competitive salary

� Pay attractive rates of commission on sales

� Offer a compelling package of benefits to the sales person and their family But there are also several other less tangible sources of motivation:

� Provide them with desirable high quality products that offer competitive benefits

� Generate demand and channel it to them in the form of sales leads

� Own a strong brand behind which they can feel some sense of pride to unite or at least form a positive personal attachment

� Provide them with the sales tools and resources necessary for them to do their job

� Minimize bureaucracy and red tape in order to be an easy company in which to operate

� Celebrate and reward success

� Be seen to reward performers and punish persistent failures

� Be prepared to offer additional incentives when the business requires its sales people to go the extra mile

There are, of course many more but I would guess that these are common to most vendors. What is also common is that direct sales people have a contractual obligation to sell on your behalf and yours alone. They are also obliged to meet your performance targets consistently or else put their job at risk. What is more, you manage them, you direct their actions and therefore their performance is itself a direct result of the effectiveness of your own management. But can these principles be applied to the motivation of an indirect channel where none of these latter conditions apply? Well it is certainly the case that unless you are a market leader, channel management by coercion does not work. And if you are a market leader, such coercion can only apply to the partner’s business – not their individual sales people. For example, you may penalize a partner’s business by offering less discount and therefore less margin should they fail to meet your accreditation criteria. But this penalty may not be felt by the individual sales person at all



and if it is, faced with weaker margins and less competitive pricing, the sales person will often sell a more attractive competitive product instead. Hence, channel sales people must be motivated and incentivized to sell your products especially when, as is most often the case, competitive products are available for them to sell. It goes without saying that partner sales people are just as motivated by money as your own but you have little or no influence over what they are paid or how they are compensated. Interestingly however, if we review the list of less tangible motivators above, we can see a direct correlation between the needs of direct and indirect sales people from the vendor. It is through addressing these that you will have more success in winning over your channel sales people.

Being the Vendor of Choice Channel partner sales people are like any other. They prefer to sell brands that they know and trust and that require a minimal amount of selling to get the deal. They are also much happier having the vendor create demand for their products in the market without having to do all of the work themselves. With this in mind, here are a few recommendations:

� Generate demand and be seen to do it. Whether your marketing budget is $1,000 or $1,000,000 per month, give your channel advance notice of what you will be marketing, to whom, when and via which medium. This makes it much easier for them to capitalize on your activities with their customers. Give them the opportunity to leverage your marketing investment with sales and marketing efforts of their own. This sounds obvious – but channel partners are usually the last to find out about vendor campaigns! If you can share your campaign materials with them and even let them customize and execute joint campaigns of their own, all the better.

� Allow brand-hijacking. Your branding campaigns do little to drive demand but they do create brand awareness and brand association. Partners will prefer to work with vendors whose brand values are closely aligned with their own or where they can only aspire to have such brand values themselves. Quality, reliability, innovation, performance, speed. Think about this because if your brand image isn’t one that your channel may want to share, they will be less inclined to proactively sell and market on your behalf. Share your branding campaigns with your channel as well your demand generation campaigns. Let them hijack your brand campaign and turn it into a direct demand generator by supporting co-operative marketing activity.

� Channel demand to your best partners. When a customer is influenced to buy as a result of your website or closed-loop marketing campaign, direct them towards your partners to fulfill that demand. If you don’t have a partner locator tool on your website yet – get one. Customers won’t dial your 0845 number and hold for an agent to find out where they can buy, they may simply go elsewhere. Modern partner locators don’t just search on postcode. This is because geographic proximity is only one profile attribute of many. Such a tool needs to match customer size, horizontal and vertical market, product requirement, value added services requirement and so on and it must search against your most recent and most accurate partner database. It should also offer the customer



a choice and notify the selected partner(s) that a referral has been made encouraging them to proactively follow it up.

� Give the leads to closers. If your marketing campaigns generate sales leads, make sure that they are given to the most appropriate person (a closer) within the most appropriate partner without delay. Impose an SLA for lead recipients to respond and contact the customer and monitor the lead until it is closed whilst offering your support to the partner to close it. Reduce the amount of manual intervention within the lead management process in your own company. Celebrate success and reward closers with more leads.

� Accept leads from partners and reward their transparency. If a partner sales person registers deals in progress with you early in the sales cycle, it allows you to offer support or intervene to help win them. Make the registration process simple and available online. Make it easy for the partner to update deals and request physical or pricing support. If a deal is won, reward the partner generously and if someone else poaches the deal on price, reward the registrant anyway. You probably wouldn’t have won it without them. Some vendors struggle to get partners buy in for programs such as this due to a lack of trust or motivation. Make it worth their while, apply your rules for consistently and you will benefit from more new business, greater partner loyalty and a very comprehensive sales pipeline.

� Keep it simple. In every partner satisfaction survey I have read, there are a number of consistent stand-out comments made by partners. They say that they like to work with vendors who are “easy to do business with”.

There is nothing wrong with being disciplined, well organized and even process-driven but being bureaucratic and forcing your channel partners to endure excessive and painstaking administration or to jump through hoops unless absolutely necessary will demoralize and de-motivate them. Before applying any practice to your partners or mandating any business process, think first if it will benefit the partner, consider alternatives and if none exist, Needless bureaucracy is the preserve of the market leader. If you are not one, keep it simple!

� It’s nice to be nice. Your corporate culture and partner-facing demeanor matters too. Your channel partners want to be treated with fairness, respect and courtesy. And no-one likes an arrogant vendor - I’m sure we can all think of one or two of those! But these things really do matter and can make a significant impact upon the levels of motivation your partners exhibit towards working with you. As individuals we prefer working with people we like or who are like us. As vendors, we should always ensure that we are:

� Respectful

� Courteous

� Consistent

� Supportive

� Flexible

� Easy to contact



� Sales- and marketing-led

� Keen to “do a deal”

Show Me the Money I have a British Airways Gold Executive Club Card and (sadly) I’m proud of it. When I’m close to losing it, I have been known to go to extraordinary lengths to make up my annual points total. And when BA are having a slow quarter, I often help them out by taking them up on their offers of double points or free upgrades. I don’t fly with any other airline unless there is no alternative and I do all this because of a plastic card and a free cup of coffee on a comfortable chair. But then deep down, I’m a sales person and I respond well to loyalty programs and incentives.

� Loyalty programs. Such schemes are by definition strategic. In other words, such a program lasts for a long time or perhaps indefinitely and sets out to reward partners who are consistently loyal to your brand or product range over time. There are a variety of different models most of which reward sales with points and points with rewards of some sort:

� Gift catalogues

� Vouchers with a monetary value

� Vouchers for goods or services

� Credit or debit card accounts All such schemes can work well and some are better suited to specific countries and cultures than others. Success can be governed by local pay and conditions, type of reward, threshold for entry and the time taken / effort expended to secure the all important first reward. But such programs can be incredibly expensive to operate, promote and fulfill. There are many marketing agencies out there eagerly waiting to take your money so consider automation in house before taking this route.

� Incentives and promotions. Tactical campaigns can be much more effective at helping to mold behavior amongst your channel where short term goals become paramount eg. selling out end of line product, supporting a product launch etc. But you must be lighting fast and communicate directly with the channel sales people. Don’t rely on distributors or your channel account managers to do it – they won’t unless there’s something in it for them as well and by the time they reach everyone with the message, it will all be over. Tactical incentives are a great way of solving short term problems or creating a buzz and increasing activity for a short period of time but build them in under the umbrella of your strategic loyalty program and don’t run them too frequently or to regularly – I knew of channel sales people who would manipulate customer orders to ensure that they were placed to coincide with the vendors next incentive!



� Top performers. Years ago, when margin was more plentiful, vendors used to treat their top channel performers to no-expense-spared ‘business trips’ or ‘conferences’ in exotic places. The problem was that it was inevitably the same faces every year and the events became clichéd thank-you’s for services rendered rather than an effective incentive for greater performance. But rewarding top performers can be effective if properly implemented and well communicated. It is important to consider your objectives first though. What defines true success? What really makes a difference to you? For example, is it better to reward a partner for winning new customers rather than simply selling the most to the one’s you already had?

� Investing in collaborative marketing. “MDF”, “soft dollars”, marketing rebate – whatever you call it, it has a poor reputation for delivery of a good return on investment and throughout the history of the industry, most has ended up propping up channel balance sheets. So much so that vendors have introduced restrictions, limitations or else withdrawn it all together. This is a mistake. It is also a mistake to believe that administering such funds is difficult and time consuming. A good PRM system can manage these funds with ease and link in to both your financial systems to manage accruals and credits and your partner portals to facilitate self-service funding applications, approvals, redemptions and ROI reporting. Giving access to such funding in a disciplined, controlled and administratively ‘low-impact’ manner will encourage proper use and will facilitate comprehensive reporting and analysis to ensure your get value for money and a good return whilst motivating your partners.

Summary You can buy loyalty and you can earn it. Earning loyalty is more difficult and more time consuming to do but loyalty that is earned is infinitely more enduring. A balanced approach is most effective and most able to respond to the needs of a fast moving market and a rapidly evolving channel.

Chapter 6: Partner Collaboration

Proven Methods In the 1990’s, collaboration with channel partner networks centered squarely around plugging the gaps – either extending a vendor’s reach into geographic, vertical or horizontal markets or else utilizing channel partners as a means of augmenting a vendor’s capabilities where services were a key component of the solution required by the customer. In this way, vendors gained a more complete offering and were able to meet the needs of their customer wherever, whenever and however they were needed. Collaboration has taken many forms the three key areas have been:



� Professional or support services

� Sales and pre-sales

� Marketing. Of the three, undoubtedly the most consistently well implemented has been collaboration in the provision of customer services. Starting first with break-fix warranty support by resellers themselves and then over time migrating to such work being carried out by large TPM’s. Sales and marketing collaboration has been less consistently well executed and typically with a number of stand-alone programs. Here are the most common and my thoughts on them, good and bad:

Lead Management Programs Converting vendor generated demand into sales leads which can be distributed in a fair and consistent manner to the channel partners most suited to close them has got to be one of the most basis initiatives to get right. Why? Because most vendors spend a great deal of money on marketing but, as we have explored in earlier sections of this document, when you go to market through an indirect channel to market it can be extremely difficult to assess whether you are seeing a reasonable return on your investment. That’s because in general, you don’t talk to the customer and you consequently do not know why they chose to buy your product. Unbelievably, to this day, most of the vendors I encounter still struggle with lead management programs. The main stumbling blocks are:

� Lead qualification: How to qualify a lead on behalf of a partner?

� Partner selection: Which partner should get the lead?

� Lead distribution: How to issue the lead and to whom within the partner?

� Lead tracking: How do I know if the partner followed up the lead? Did they close it?

� SLA’s: What response times are needed and are reasonable? What to do if they’re not met?

� Follow up: Who, when, what is the process, what are the prompts, what are the actions?

� ROI analysis: Per campaign, how many leads generated, followed up, won, lost, pending, time to close, value?

� Reporting and CRM: What did the customer buy? What else did they buy and will they buy again?

Time and time again, I see vendors trying to manage lead management programs using CRM systems that are not fit for purpose or worse, they manage the process with spreadsheets. The results are predictable and disastrous:

� Poorly qualified or ‘cold’ leads being issued to the wrong person at the wrong partner

� Leads being given to the same ‘preferred’ partners every time



� Poor response times

� Lack of follow up

� Poor or non-existent reporting

� Poor ROI Partners are left wanting and vendors feel cheated because their marketing investment and the leads produced appear to deliver poor sales in return. The simple answer is automation. There are a number of commercially available lead management systems either as stand-alone solutions or as integrated offerings as part of a PRM system that do a fine job. But if automation is not an option then manual processes can be made to work on a small scale. Some simple things to remember:

� DO formulate a detailed workflow for the process

� DO establish a clear set of business rules

� DO develop a detailed understanding of each of your partner’s geographical, technical, skills and market coverage limitations to ensure correct lead-to-partner matching

� DO define a consistent selection criteria to determine which leads go to which partners and on what basis

� DO insist on partners signing up to SLA’s and response times

� DO insist on accurate and timely reporting

� DON’T distribute sales leads though your account manager’s unless they can exercise some degree of partner-agnosticism

� DON’T send leads to reseller principles or other top management, they will rarely find their way to the sales team and if they do, they will have gone cold by then

� DON’T assume, check! Make sure you contact the customer shortly after distributing the lead to ensure that they have been contacted and that their experience was a positive one

Some of the most sophisticated and the most successful programs I have seen did involve automation and allowed internal or 3rd party sales agents to be able use a PRM system to drive the campaign management and prospecting activity, create and document leads, build a sales pipeline, qualify and then select the most appropriate sales person at the most appropriate partner to receive the lead via the partner portal and email. The lead could then be tracked through to closure and the partner sales person was able to request support (eg. special pricing) online and get that support within hours or minutes. Furthermore, tracking was made easy as was reporting and whilst managing the opportunity from campaign to closure the vendor was able to effectively assess ROI.



Deal Registration Programs Providing channel partners with a means to register and track their own deals or leads with you is an excellent way of developing a holistic sales pipeline and forecasting process whilst minimizing channel conflict and potentially rewarding partner loyalty and transparency. But I have seen such programs fail for a variety of reasons:

� Lack of publicity

� Lack of incentive for the partner

� Inconsistent vendor behavior, disregard for incumbency and/or customer preference leading to greater channel conflict

� Partners able to register deals regardless of incumbency or customer relationship

� No win – no reward for the registrant regardless of whether the vendor wins the deal or not

Whether automating the process or not, you will have to think long and hard about workflow and business rules once more or else these programs can be costly failures and create a great deal of channel dissatisfaction. The rewards have to be worthwhile and attractive. I feel strongly that when a partner registers a deal with you and drives the sale, the registrant should receive a reward even if the deal is ultimately won by a competitive partner. I have seen VAR’s lose interest when a low cost competitor wins a deal on price when the registrant put in all the work and the vendor refuses to pay out. Come what may, deal registration must be quick, easy, accessible online and consistently executed by the vendor. It needs to be marketed continuously to your partners too otherwise interest and activity will fade. A word of warning though, deal registration programs can be almost impossible to manage manually unless numbers of registrations are expected to be very small. The process of validation, incumbency checking, approvals, closure verification and reward remuneration can tie up significant administrative, sales and marketing resources very quickly and very easily.

Joint Marketing In it’s simplest form, this is providing marketing contacts within channel partners with advance information in relation to your own marketing campaigns and providing access to marketing materials to enable them to run their own in parallel. Simple, but often poorly executed. In practice, channel partners typically find out about vendor marketing campaigns at around the same time that their customers do. Whilst we all know that planning, budgeting and implementing a marketing campaign can take many days or weeks, vendors most commonly leave their channel partners with insufficient notice to develop their own campaigns and run them concurrently. This is quite simply insane.



Channel partners are often eager to find new ways to communicate with their customers and new messages to communicate to them. If they and you can leverage your collective investment and your collective firepower simultaneously and with a consistent message you have a chance to multiple your return on marketing investment significantly. What it takes to succeed is for vendors to see partner marketing teams and marketing budgets as extensions of their own resources. Create a virtual marketing team or community, protect your confidentiality with NDA’s if necessary but share information about upcoming product launches, promotions, demand generation campaigns and even branding campaigns by whatever means you have available. There are a number of tools on the market and agencies able to support online co-branded collateral creation and these ensure that when a partner does participate in collaborative marketing, they can adhere to your brand, message and creative look and feel which again serves to maximize impact for the vendor. I have seen such sub-programs work best when linked to market development fund programs such that the vendor contributes toward the cost of co-op campaigns as and when they are implemented in adherence with their own guidelines. More on MDF in a moment. The key here though is timely communication and information sharing amongst your channel partner community. On this note, I should add that in our experience, vendor databases of channel contacts on average hold less than one marketing contact per eight company records! Remember, you can’t market through companies, only through people!

Market Development Funds or MDF We talked about the pro’s and con’s of MDF as a partner incentivization tool in the last chapter. Now let’s look at it as a practical facilitator for collaboration. Channel partner marketing budget’s are geared around promoting the partner and the things that they sell to their own customers. Few channel partners are philanthropists so if they are going to invest any portion of their own budget in promoting a vendor instead of themselves, there will have to be a very good reason or else a financial contribution by the vendor in question. In the 90’s MDF became little more than a bribe. Most propped up the balance-sheets of channel partner who came to rely upon it to stay in profit. As margins fell for vendors and the need for greater financial; transparency and compliance became more critical, many vendors tightened up the rules of MDF programs or stopped them altogether. I am not nor have I ever been an advocate of accrued MDF based upon a fixed percentage of sales. MDF can often be seen as an entitlement in these cases, and it should never be a contractual obligation for a vendor to provide it. Instead it should be a discretionary fund to which channel partners apply under strict guidelines for part financing of activities deemed likely to generate sales directly or indirectly for the vendor. It should be positioned as unlimited’ and a partner should be able to utilize it as often as they wish provided that a number of rules are applied:



� A vendor should look to pay no more than 50% towards any campaign or activity

� Criteria should be laid out under which the 50% will be paid subject to achievement of agreed KPI’s

� Ideally campaigns or activities should be implemented through vendor-aligned agencies through which they (and hence he partner) may enjoy volume discounts thereby minimizing the cost of the initiative to al

� Partners should receive no payment from the vendor until after the activity has been completed

� Partners should demonstrate that they have achieved the prescribed KPI’s and reimbursement should be made accordingly

� ROI should be tangible and measurable We have worked with vendor’s who have implemented such a scheme to replace an accrual-based model. Their message: “more control but more available funds”. Naturally, if the MDF spent delivered a better ROI than before then, by definition, this meant more sales and hence more marketing budget. In reality, we saw significant reductions in fund redemptions but a significant improvement in the quality and alignment of partner-led campaigns. Such campaigns were considerably more effective than before leading to better results. A virtuous circle and one which has seen massively increased marketing productivity from the partners and massively decreased vendor costs whilst leaving the channel as a whole happy in the knowledge that unlimited funds are available to them so long as they can demonstrate that they will spend them wisely.

The New Wave: Collaboration Across The Partner Ecosystem The 2000’s have seen a surge in usage of web-based personal and business networking services including the likes of Face Book and LinkedIn. It has long been the vision of some of the larger vendors to be the catalyst for bringing channel partners with complementary skills and services together to encourage collaboration not merely between vendor and partner but also between all constituent members of the partner ecosystem for the purposes of delivering the most comprehensive solution to their collective customers wherever they are in the world. Big players like Microsoft and Cisco have launched initiatives this year to set the trend but five years ago I presented at on the Channel Focus conference on the topic of harnessing the power of the partner eco-system and leveraging the web to do it. You don’t have to be Microsoft to achieve it either. What you need is an intelligent partner portal backed by a comprehensive partner database that you can leverage PRM-like tools to selectively make available to your partners through portal pages. Turning the basic principles of the age-old partner locator on its head presents you with an opportunity for your partners to search for likely collaborators based on location, skillset, customer or market focus and service offering – and then allow you to be the facilitator of secure communication between them.



But why bother? I think it’s simple. We are living in the age of pervasive personal and business networking, perpetual availability for interaction and inter-business collaboration. Never has it been easier to identify and communicate with like-minded individuals and those with complementary business models with which to partner. And never before have we all been so receptive to it. If the vendor’s don’t make themselves the facilitator and sit at the center of their partner ecosystem; encouraging and enabling collaboration, others will be only happy to do it for them.



Chapter 7: Partner Communications Communication is defined as “the process of conveying information from a sender to a receiver with the use of a medium in which the communicated information is understood the same way by both sender and receiver.” Effective communication can be challenging enough between two people who know each other well, who are familiar with each other’s thoughts, ideas and communication styles and who are in close physical proximity to each other. It becomes more difficult for a vendor attempting to communicate with the channel partners with whom it has the most intimate of relationships. But what of the difficulties faced by countless vendors who must communicate daily with 100’s or 1000’s of channel partners with whom they have only the most basic of relationships and about which they have little or no knowledge? The tendencies are either to deluge channel partners with daily generic email blasts, newsletters, announcements and direct mail in the vain hope that a handful might find them of some interest or value or else do nothing and maintain “radio silence”. Not surprisingly neither of these approaches ensures optimal channel partner performance. In this chapter, we will examine methods for improving your chances of turning partner communications into sales.

Communication Strategy In most companies, the marketing director is a member of the main board or executive management team. The incumbent presides over and oversees the execution of the company’s marketing strategy. Curiously, even in companies who sell entirely through indirect channels, the individual responsible for the somewhat more complex task of marketing to, through and with the indirect channel does not enjoy such a senior position in the company. Very often, they do not even reside within the marketing organisation at all. This is unfortunate because it leads to a number of issues which we have come across time and time again:

� Channel marketing is disenfranchised from corporate marketing

� Channel marketing is seen as a tactical activity and an extension of channel sales and product marketing

� Channel marketing staff are often not party to nor are they made aware of strategic marketing planning

� Channel marketing fails to communicate important and useful information adequately or early enough to the channel to allow them to act upon it

� The channel fails to market collaboratively with vendors – on message and on time

� Vendors consequently fail to leverage their channel partner’s marketing resources and budgets effectively



� Since channel partners fulfil the demand generated by vendor campaigns, the vendor fails to maximise ROI on marketing spend

The publication of this chapter is unlikely to address the lack of organisational development evident within most vendors. However, recognising the problem and taking steps to minimize its impact would be good first steps. “Channel marketeers” should adopt the same approach to partner communication as their corporate brethren take to corporate marketing communications to customers, they should develop a strategy, take a proactive rather than reactive stance and adopt an approach most likely to maximise the effectiveness of their partner communication activities:

� Objective – What do you want to achieve through this or any partner communication?

� Selection and segmentation of receivers – Who do you want to target and why?

� Medium – What is the best means of delivering your message

� Message – What is the message?

� Syntax - What do you want to say?

� Semantics – How will you say it and how do you want it to be interpreted?

� Call to action – What do you want the receiver to do next?

� Response – What response do you want to solicit and how will it be made?

� Repetition and frequency – Will you repeat the message and if so when and how often?

Communication Objectives Whilst you can communicate with your channel partners too infrequently, the opposite is certainly also the case. As with all forms of communication, if you have nothing worthwhile to say, don’t say anything. Partner communications must have a purpose each and every time. they must inform, educate or form a proposition of some sort. You must stop and think:

� Why are we communicating?

� What are we trying to achieve:

� Quantitatively?

� Qualitatively?

Selection and Segmentation of Receivers Your message must be relevant and interesting to your receiver. Therefore prior to creating the message, it is essential to determine who your audience will be and consider adapting your communication according to your audience:



� Restrict your audience to only those receivers for whom the specific message is relevant

� Adapt the medium of the message so that it is relevant

� Adapt the syntax and / or the semantics of the message so that it is relevant

� Adapt the timing of the message so that it is relevant

� Adapt the call to action of the message so that it is relevant This step can often be difficult for vendors who lack sufficient personal profile data on the individuals in their channel. It is common to hear of vendors sending partner communications to the partner principle or to the sales@ or info@ email address. All of these are of negligible value and send out a poor impression of your level of partner intimacy. Quite simply, if you do not have a detailed, up to date partner database with multiple contacts in all disciplines for each of your partners, your communication strategy will at best deliver sub-optimal results.

Medium eMail has become the default communication method these days replacing the direct mail piece of the last decade. Unfortunately, to make it work properly for you, you need to:

� Ensure that you have accurate, up to date email addresses for individuals in your partner community.

� Ensure that you have their permission to send mail to their private email address (business addresses are exempt from DPA restrictions)

� Ensure that you have a means to dispatch sometimes large numbers of emails at one time.

� Have a repeatable process for communication creation that avoids duplication of effort.

� Offer a means for the recipient to unsubscribe.

� Make the title sufficiently compelling to ensure the mail is opened.

� Keep the content short and present it in such a way as to make it look and sound interesting.

� Have a means of tracking the communication:

� Who did it go to?

� Who received it?

� From whom did you receive a “bounce-back” and why?

� Who opened and read it?

� Who responded to your call to action?

� Ensure your communications are not mistaken for spam



It is often worthwhile targeting selected sub-audiences with complementary communications using other mediums such a telephone, direct mail and SMS where a more personal touch is required or where the message needs to be reinforced. SMS is becoming a more common medium particularly when communicating with sales people and where immediacy is important but it should always be backed up by other mediums. Partner portals should be seen as the final destination and the medium for hosting the message in its entirety. All other mediums should be used to direct partner traffic to your portal. This is important for two reasons:

� Your communication should be brief and to the point directing the partner through a call to action to visit your portal do take the next step:

� Read

� Learn

� Sign-Up

� Download etc.

� Your partner portal contains so much more information of value to the partner. Use their visit resulting from your communication to retain them on the site a little while longer to enable you to impart more information.

It should be remembered though that all mediums rely upon good contact information whether that be telephone numbers, email or office addresses. I will stress again that this is the biggest single source of failure. If your database is inadequate or out of date, you will fail to communicate effectively.

Message The message consists of three basic elements:

� Syntax – What you say.

� Semantics – How you say it and how you want it to be interpreted.

� Call to action – What you want the receiver to do next.

Syntax and Semantics

We will not attempt to use this chapter as a means of providing instruction on the use of the English language but rather to look at practical ways of effectively targeting the message at different audiences of receivers and of adapting the message itself to be more effective at maximising your chances of maximising call to action response. The best way to do this is with an example with which we will also look at some other considerations relating to the message not covered elsewhere. If you intended to communicate



the launch of a new product for example, you could adopt any one or all of the following approaches to receiver selection and segmentation and message adaptation for the communication:

� Restrict the audience to only those channel partners authorized to sell the product

� Send the message out to field-based partner staff eg sales via SMS, and mail to maximise the impact and immediacy

Then in consideration of the message itself:

� Adapt the syntax of the message so that the message is relevant and interesting to:

� Sales people – features, functions, benefits and incentives etc.

� Marketing people – media plan, availability of collateral, MDF accruals etc.

� Pre-sales – competitive benchmarking, chapters technical information etc.

� Technical – Technical schematics, warranty policy, spare parts availability etc.

� Operations and purchasing – Pricing, part codes, options and accessories, availability etc.

� Adapt the semantics of the message:

� Why should you sell this?

� How should you market this?

� Why should you recommend this to your customer?

� How can you service and support this?

� How can you buy and stock this? And what of timing? Could you adapt the timing of the communication to maximize its effect?

� Operations and purchasing may need to know first so the part codes and pricing can be set up on their ERP system.

� Technical and pre-sales may need to know next so that they can undergo training.

� Marketing may be next as they will need to plan media schedules and order collateral etc.

Call to Action

Each and every partner communication must have a call to action. If the recipient must do no more than read a message the chances of them retaining it and acting on it are small. If they must do something – make a conscious effort to take an action in order to:

� Access more information

� Download a document



� Sign up for an incentive

� Order brochures

� Order inventory

� Enroll for a training course or indeed in any way participate or interact with you they will remember the experience. It will have an impact and the chances of them following through with the desired behaviour are much enhanced. There is some parallel to be drawn here with the psychology of the “freebie”. If something is free or if obtaining it requires no effort and / or no investment then its perceived value is low. By contrast, (and of course there is a fine line that you need to tread) if something requires effort or investment to obtain then it must have a greater value. In summary, always have a call to action whatever it may be because a communication without one may well be forgotten in less time than it took to read it.

Response When you deliver call to action, then you must also have in mind a desired response both in terms of:

� Action – What do you want the receiver to do:

� Immediately?

� In future?

� Medium – How do you want them to respond? By implication, if you are going to communicate and any communication must have a call to action then you must plan for the response and consider how you will:

� Receive it

� Monitor it

� Report upon it

� Act upon it In practice, this means content creation within your portal. It means making sure that the information or functionality exists within your portal to easily satisfy the call to action, to act upon it and to capture the interaction resulting from it.

Repetition and Frequency



Whether you send out weekly updates, monthly newsletters or quarterly bulletins, consider carefully how often your partners want to hear from you. It is important that you consider how many vendors are contacting them daily and how many different communications they are likely to receive and want to receive. Consider conducting research amongst your partner community before deciding for yourself. The results may differ substantially! We think that communicating more that once per week is dangerous because it increases the likelihood substantially of your messages being:

� Ignored

� Read selectively

� Categorized as “Junk Mail” and never read again Communicate sparingly and ensure that what you have to say is worth saying and interesting to your audience. However, if you issue an important message to your channel partners, it is worth repeating it selectively to those who failed to respond to your call to action the first time. This “second bite of the cherry” can often produce more results than your first provided that you change the tone of the message to incorporate a more personal, appealing or even pleading tone.

Summary If you sell and market through an indirect channel to market then partner communications are arguably as important if not more important than the communications you initiate with your target customers and yet I would expect that as you read this, this sentiment is not one widely supported in your organization. Come what may, you should ensure that you take a strategic approach to planning and execution of partner communications to maximize your impact and your likely return on investment.



Chapter 8: Partner Service and Support In this chapter we consider the best approaches for providing a service and support offering to your channel partners for which the investment required is proportionate to the return yet the quality of offering is consistently high regardless of partner status.

Partner Segmentation Versus Quality of Service In an ideal world, partner service and support should be provided in the spirit of social welfare services - available to all, provided to a consistent standard and free at the point of use. In practice, things rarely work out this way. In previous chapters, we looked at partner selection and segmentation approaches leading to the development of accreditation hierarchies. These same hierarchies are commonly used to determine the nature and often the quality of service and support offered:

Fig 4: Segmentation Versus Type and Quality of Service

As we already discussed, this approach simply exacerbates the pareto effect – 80% or more of a vendor’s business derived from 20% or less of the partner base. This makes perfect sense. Higher tiered partners get the best levels of service and support and the greatest investment. Lower tiered partners receive the poorest service and the least investment. One could argue that this is only fair. However the model makes a key and often flawed assumption; that partners generating low levels of sales today lack potential for growth. Making the same assumption about customers would be unthinkable! However, nurturing lower tiered partners to encourage growth can be a difficult and time consuming task. It is for this reason that many vendors simply don’t bother to try. But in difficult business and economic climates such as those we currently face, failure to exploit all of the sales



and marketing resources and opportunities available to you is quite simply inexcusable. Our advice would be to invest in:

� Profiling your lower tiers

� Building a comprehensive database of your entire partner community

� Segmenting your partners based upon qualitative as well as quantitative metrics

� Targeting those partners with high growth potential

� Offering a consistently high quality of service and support to all regardless of tier

Delivering High Quality Service and Support to “Managed Accounts” Foundation Network concern ourselves with collaborative partner relationship management process automation and we know from experience that getting these essentials right and providing the tools and resources to your field channel account managers and call centre agents delivers great results. What we will not attempt to do here is to discuss human partner management best practice as this is a topic best addressed by sales force development companies. Let’s take a look at some of the tools and resources that can tangibly improve sales force productivity, channel intimacy and ultimately drive indirect channel revenue growth

Account & Contact Management

Any relationship management system will provide sales people with the ability to populate your database with company and contact information. This will not only improve their own effectiveness in managing their accounts but will also support marketing communications and channel marketing program effectiveness. This helps to ensure that partners receive the most appropriate communications to their job roles and needs and improves the perception of the vendor’s level of partner intimacy.

Activity Management

As important to sales managers as to the sales people themselves, activity management tools help to improve productivity and activity levels and monitor sales person interaction with their accounts. This also serves to increase the amount of proactive interaction and hence support time offered by the account managers to their partners.

Partner Management



A partner relationship management system can provide sales people with tools to oversee their partner’s interaction with many aspects of the partner program. This will include tiering and accreditation, training participation and personal certification, MDF accruals, claims and expenditure, sales incentive performance etc. This helps make account managers more knowledgeable about their accounts, have greater visibility at a detail level and facilitates consultative account support thus enabling them to deliver substantially more value to their partners.

Partner Portal

Tier-driven selective content presentation via the partner portal ensures that field and telesales managed partners activities can be backed up with tools, content and resources on the partner portal providing 24x7 partner support.

Lead & Deal Management

Manual lead management processes often involving telemarketing, telesales, field sales and partner reps can be fully automated along with deal registration programs to maximize productivity, speed up lead closure and deliver improvements in marketing campaign ROI. Well run, efficient and effective lead management programs are highly valued by partners.

Opportunity Management

Relationship management systems will enable filed and telesales partner account managers to input and manage their sales pipelines tracking run-rate and project-specific business and provide managers with roll-up facilities to gain a top-to-bottom view of all sales opportunities.

Sales Forecasting

With all partner leads, deals and run rate business captured in the same system, forecasting is made easy and the process is dramatically simplified saving sales reps a great deal of time whilst improving accuracy.

Data Quality Management

Making sales reps responsible for managing and maintaining partner data takes a little time but helps them to engage in effective partner management and contact management ultimately improving partner relationships and sales rep productivity.

Document Management



By making your partner database the master repository of partner data, you can associate all documents from correspondence, marketing communications and price lists to contracts with a partner’s record making them easy to catalogue and retrieve by anyone in your organization. What is more, when a sales rep leaves the company or changes role, no documents will be lost or left on their hard drive. What is more, documents can be made accessible by the partners themselves via the portal on a self-service basis.

Contract Management

Managing contract management and renewals online via the portal and automating the approvals processes will save sales rep time and help improve productivity, accuracy and consistency for both vendor and partner.

Basic email Marketing and Communications

By driving all partner email and communications through your relationship management systems, data can be captured in the contact history ensuring that all contacts are recorded centrally rather than distributed on individuals PC’s or laptops. Email templates for standard communications can be made available to sales users to improve consistency of look and feel and minimize duplication of effort whilst improving the quality, relevance and timeliness of communications to the partner.

Sales Out Data

Integrating sales data from ERP systems, CRM systems or sales out data reports from 3rd parties into partner databases places all of the necessary performance management information into the hands of the partner account manager and ensures that the partner relationship management system becomes their most essential tool.

Reporting Tools and Dashboards

To avoid forcing partner account managers to seek out performance data from your disparate systems, provide them with easy to use, self-configurable reporting tools and dashboards that give them instant access to key performance metrics and allow them to extract reports to insert into business plans and presentations at the click of a button. In summary, greater automation and process simplification leads to improved productivity. Increased productivity in turn leads to more “face time” with partners or more time to build relationships with more partners. Essentially equipping your channel sales team with the right tools and resources with which to do their job is essential to providing high quality front line service and support to managed accounts whether they are looked after by field-based or telesales reps because of the substantial productivity and capability enhancements they offer.



Delivering High Quality Service and Support to “Unmanaged” or Tier 3 Accounts Foundation Network have built and deployed some of the industry’s best and most successful partner portals. We don’t write content – our customers are the best at doing that – but we do advise them on best practice in partner portal design and functionality to offer the best possible online partner service and support. Here are some tips that our customers have found useful

Portal Accessibility

Browser Testing

Partner portals should be compatible with the four most common browsers: Explorer 6, Internet Explorer 7, Mozilla Firefox 3 and Opera 8 and increasingly, they will be accessed by mobile devices so compatibility should ideally be ensured with mobile browsers as well.

Text Browser Compatibility

Text-based browsers support much more limited functionality and some forms or functionality will not look right or work properly. Make sure that yours do.

Window Size

Many partners will want to access the portal using a laptop with a correspondingly small screen. The portal’s window size should be flexible and designed to fit well in the most frequently used laptop screen format of 1024 x 768 pixels.

Color Blindness

Portals should be tested under the constraints of a filter designed to emulate color blindness. This very common condition can make many websites very difficult to navigate.

Navigation

It is essential that partners can easily access the information and tools they need with the minimum number of clicks from the home page. It is critical that the site structure is well thought out and that everything is navigable through no more that 2-3 clicks and is clearly signposted from the home page navigation.

Use of Frames If possible, avoid using frames. Some people have difficulty navigating within frames, either because the frames are confusing or because the software they are using simply cannot read frames. When using frames, always offer meaningful NOFRAMES content for those people who cannot read framed information. Use NOFRAMES properly - "upgrade your browser" is of no help to someone using (through choice or necessity) the most up-to-date version of a browser that



simply doesn't handle frames. The NOFRAMES section should contain meaningful content with links to the other pages in your site, so that they can be accessed without frames. If you must use Frames, ensure that each frame has a sensible TITLE (in addition to the NAME) which gives a clear indication of the content to be found in that frame.

Portal Functionality

Sitemap

While sitemaps are not of vital importance to a portal site, they do improve the user experience particularly where there are navigation issues.

Search

It is important that a partner can easily mine the wealth of information contained in your portal so a good search function is essential. Incorporate a high performance search engine with both basic and advanced search capability – we use Verity in our sites and be mindful of the presentation of search results.

Contact Us and Contact Information

Make sure that partners have the means to contact you through the portal and provide a means to communicate with specific people, roles or departments. It is very effective to incorporate the names and contact details of those people in your organization – account managers, partner marketing team members, technical support team members and operations people who are actually assigned to the relevant partner. This can be achieved by incorporating their details into partner profiles in your database that sits behind the portal.

‘Remember Me’ Functionality The portal should contain a remember-me option on the log-in screen to prevents them from having to enter their access details every time they visit the portal. This makes the future login process much quicker and easier and addresses a common complaint that partners have regarding having to remember multiple ID’s and passwords for the plethora of vendor sites they use.

Printable Version and Exportable Content

Define and incorporate a specific print-style-sheet to ensure that pages are printed correctly. The printed pages should not contain the portal navigation which is usually not required when printing a portal page. The ability to export content for incorporation within presentations or proposals for example should also be considered.

Partner Relationship Management Functionality

Self-Profiling

In order to maintain data quality in your database and improve the targeting and quality of your communication, offer partners access and editing rights to their profile data so that they can maintain themselves. Make this easily accessible to them from the homepage or as part of the navigation.



Lead Management

Coupling your marketing, lead generation and sales activities with automated lead distribution via the portal streamlines the process and delivers leads directly to the channel sales people best placed to close them. Additionally, if you provide a means for partners to update lead status themselves online, they can keep you up to date and let you know when sales are worn or lost. This also ensures that you can monitor performance and ensure that closers receive more leads.

Deal Registration

Essentially, lead management in reverse, deal registration capabilities allow partners to register their own sales leads via your portal in exchange for some benefit or reward. If their leads can be seamlessly deposited into your integrated sales pipeline and managed online is exactly the same way as your own leads, the process is streamlined, kept constantly up to date and partners can be rewarded for deals upon closure.

Online Learning and Certification

Face to face sales and marketing training is typically not practicable or cost effective these days but in its wake has been left a void. Some vendors have made attempts to stretch legacy internal learning management systems to support online partner training but this presents a number of problems not least the creation of yet another portal for partners to use and one more database to keep up to date. Leading partner portals integrate e-learning with online testing and certification management to deliver a full range of partner training programs including technical and pre-sales and manage the entire process from content management through delivery and the management of complex accreditation mapping and scoring. This ensures that partners need only log in to one portal and all of their information is maintained up to date within the same database. Marketing Tools and Management of Marketing Funding Many portals offer partners the opportunity to download marketing materials, brochures and presentations and a number of software or services companies have in recent years offered plug-ins to facilitate online customized or co-branded marketing material creation. Best practice partner portals integrate all of these capabilities but additionally they facilitate full marketing collaboration between vendor and partner. This can include the facility to accrue and manage MDF accounts, claim funds and make redemptions against approved marketing campaigns all enabled by integration with the partner database and other enterprise systems at the back end.

Incentives Programs

Loyalty programs and incentive campaigns are another program component often outsourced to third parties by vendors. Again, this results in multiple portals or websites, manual processes, inconsistent data and poor partner satisfaction. High performance partner portals

Special Bid Support

Another process renowned for being at times painfully slow, bureaucratic and inefficient is the process of managing special pricing or bid support. Leading portals automate this process by managing product catalogues and pricing, bid requests, hierarchical approvals and imposing roles and controls. This once again enables partners to use the portal as a one-stop-shop and enjoy a much more convenient, efficient and speedy experience in supporting you in business development.



Partner Locator

Link your corporate website to your relationship management system’s database to provide an intuitive partner locator function that enables customers to match their needs to the most appropriate partner. Complete the loop by notifying the relevant partner immediately by delivering a lead with the customer’s information to ensure that the opportunity is followed through. These “soft” leads are often less well qualified but much appreciated by partners.

Content

Product Services Catalogue / Product and Services Collateral There should be an abundance of “channelized” product or service information. By this we mean generic material that has been written specifically for a channel audience rather than for customers. It’s aim should be to assist the partner in selling, marketing and supporting rather than persuasion to purchase. Information must be available in a variety of forms including audio visual, textual and graphical and it must wherever possible be available for download in formats that can be used by the partner in their own documents, proposals and collateral.

Price lists

In addition to comprehensive and up to date product information fed from the latest integrated product catalog, portals should offer relevant partners online access to their own price lists

Amount of Text on Page and Page Download Size

Avoid over filling pages with too much text and reduce as much as possible the need for partners to scroll down to see content. Use fonts and font colors that are easy on the eye. Keep text columns too wide to make them easier to read and balance your desire to impress with audio visual content including Flash with minimizing page load times.

Persuasion Elements Improve stickiness and the desire to explore the site and make use of its functionalities by using persuasion elements and calls to action on every page.

User Specific Content

Partners will be drawn to the portal and spend more time visiting it if they sense that the content is tailored to their specific interests or needs. Ensure that your content management system or PRM system can present content based upon visitor profiles and that profiles are fully populated with personal content preferences.

Partner Registration

Registration Process

Make the registration process easy to use and as brief as possible minimizing the number of screens and feels that the partner has to populate. Additional information can always be gathered later but a lengthy process can cause abandonment and the partner may never return.



Approvals Process

Automate the approvals process by using your relationship management system. Ensure timely responses to the applicant and keep them updated throughout.

Registration Incentives

Registration can be a chore for the partner. Incentivize them to go through the process if you can and entice them in by allowing them to sample the capabilities and benefits of your portal.

Security

HTTPS

Most portals currently at least offer a secure connection on the registration forms and the pages on which profile data can be updated. However, if your portal offers PRM functionality including access to confidential financial data or tools capable of managing financial activities, it is essential that you consider HTTPS at least for the relevant pages.

Password Strength

Avoid including username and password in any activation mails sent to applicants as these may make it possible for this information to be intercepted. The activation email which users receive after signing up. Also, you should allow users to change your issued password and specify their own to the highest level of complexity.

Legal

Disclaimer / Privacy Statement / Terms and Conditions

Websites that store and collect user information are required by law (data protection act) to inform their visitors about the usage of this data. Requesting partners to accept the terms and conditions for usage of the portal could prevent issues caused by inaccuracy of provided data and/or misuse of confidential information on the portal. With this in mind, ensure that the privacy statement and the portal terms and conditions are accessible before a user has logged on to the portal and when registering for an account to access the portal the partner should be forced to accept your terms and conditions for usage.

Partner Service and Support in the Age of Social Networking Looking forward, we see a move towards increased partner network collaboration. We believe that leading vendors should not only support but actually facilitate communication, cooperation and collaboration between the members of their partner eco-system. Whilst many partners do compete, vendors have to some extent been complicit in dividing and conquering them. Partner portals of the future can and will play a part in bringing partners together to share strengths and compensate for weaknesses to deliver better solutions for customers. Web 2.0 will help in ensuring that, regardless or tier, label or hierarchy, all partners are given an equal opportunity to interact with the vendor and are encouraged to interact with each other for the good of the customer and of their business in general. In this way and by focusing on delivering the very highest quality of service and support to all of their partners, vendors have the opportunity to



take their place at the very centre of the partner eco system rather than merely at the top of the food chain.

Summary Partner Portals used to be password protected websites that were often little more than repositories for out of date product information. Corporate websites have typically seen the bulk of vendor’s investment over the years and consequently many of our prospective clients complain of falling hits and a general lack of interest on the part of partners towards their portals. Today, vendors are recognizing the importance of ensuring that their partners are as well informed as their own staff and that they are provided with tools, resources and information to an equal standard. Consequently, we have begun to see a desire amongst vendors to dramatically improve not only the content of portals but also making them “self-service” sales and marketing assets for partners. In so doing they have recognized the importance indeed the necessity of deploying their partner portal not on a separate content management system but upon an integrated partner relationship management platform.



Chapter 9: Partner Performance Management

Introduction Several times during the previous chapters, we have drawn comparisons between the business practices adopted by vendors for the management of their direct sales and marketing operations and resources and those of their indirect or “channel” operations and resources. Consistently, such practices are more rigorous for the former than the latter and not surprisingly they are typically for effective in achieving business goals. In the final chapters of this report, we discuss the last two steps in effective partner lifecycle management – managing and optimizing partner performance. These are two areas in which we have seen little evidence of vendors applying performance management best practice to their partner networks even when they adopt such practices in the management of their own business and people. We have also noted that when vendors are faced with poor partner performance, their response is often to resort to tactical incentivization or the recruitment of more partners. We will examine the reasons behind this behaviour and explore alternative and more effective approaches.

Definition Partner performance management is a process driven by the vendor which contributes to the effective management of indirect channel networks, partners and individuals in order to achieve high levels of performance. In implementing a partner performance management strategy as part of a broader channel strategy, the vendor should establish firstly at a partner network level:

� A shared understanding about what is to be achieved,

� An approach to leading and developing the partner network as a whole to ensure that it is achieved.

And at an individual partner level:

� A shared agreement about what is to be achieved,

� A joint business plan setting out how it is to be achieved,

� An approach to leading and developing people both within the vendor’s channel sales and marketing organization to support the partners for which they are responsible and the people with the partner community itself to ensure that it is achieved,

Partner performance management is a strategy which relates to every activity of the organisation set in the context of its channel policies, partnering culture, style and communications systems. The nature of the strategy depends on the organisational and partnering context and can vary from organisation to organisation.



Just as with performance management in a corporate sense, partner performance management should be:

� Strategic - it is about broader issues and longer-term goals

� Integrated - it should link various aspects of the business, people management, and individuals and teams.

It should incorporate:

� Performance improvement - throughout the partner network, for individual, organisational, segment or tier effectiveness

� Development - unless there is continuous development of individuals and partner organisations, partner performance will not improve

� Managing behaviour - ensuring that individuals and their organisations are encouraged to behave in a way that allows and fosters better working relationships between vendor, partner and customer.

Partner performance management is a tool to ensure that vendor channel managers manage their partner network effectively; that they ensure the partners they manage:

� Know and understand what is expected of them

� Have the skills and ability to deliver on these expectations

� Are supported by the vendor to develop the capacity to meet these expectations

� Are given feedback on their performance

� Have the opportunity to discuss and contribute to collective aims and objectives. It is also about ensuring that managers themselves are aware of the impact of their own behaviour and the behaviour of their partner-facing representatives on the partners they manage and are encouraged to identify and exhibit positive behaviours.

Setting Performance Targets It is human nature to establish goals for ourselves and others that either cannot easily be measured and hence performance is impossible to measure or else establish simplistic goals based upon metrics that are easy to measure and yet which may not provide an objective measure of performance. Many vendors measure partner performance based upon little more than revenue precisely because this can be relatively easily determined from sales-out data sourced from their own systems or those of their distributors and as we have seen from earlier steps in this series, revenue is only one measure. In setting targets for your partners you must compromise and establish targets in the same way as you would set them for yourself or your people:



� Specific - related to shared objectives

� Measurable - input - output - outcome

� Achievable - but also stretch the partner organisation

� Realistic - able to reach the target

� Timely and Timescaled - by when the target is to be achieved In practice this means that targets must be based upon metrics that:

� Are important and have commercial impact for both parties

� Can be measured using information and systems available to you

� Have some historical pretext or are based on mutually agreed achievable projections

� You both believe can be met

� Are aligned with your own fiscal timetable – FQ and / or FY The key is measurability. We will discuss effective ways of objective performance management later. Documentation and commitment is critical. A business plan for channel business drawn up by a vendor in isolation and without the collaboration of the partners is worthless. A plan drawn up in collaboration with a partner but to which they are not committed or which offers no tangible commercial risk / reward for both parties is also worthless. Partner business plans must feature the following:

� Goals - quantitative, qualitative and mutual

� Strategy - clear plan of how the goals will be achieved

� Objectives - the specific initiatives to be undertaken

� Action Plans - assigned to people and with clear deadlines

� Timescales - timeframe for implementation and target deadlines

� Resource Plan - what resources will be required from both parties

� Investment plan - what joint investment will be made

� Signatures - by directors from vendor and partner Anything less than this does not count as a joint business plan. If a vendor cannot or will not invest the time and effort to develop these plans with at least that portion of the partner network that generates 80% of the revenue, then any resulting revenue forecasts can be little more than wishful thinking.

Performance Measurement



Performance management is closely connected to Performance measurement. They are sometimes mistaken for each other. In careful usage, Performance Management is the larger domain and includes Performance Measurement as a component. Performance measurement is the process of assessing progress toward achieving predetermined goals. Performance management is building on that process, adding the relevant communication and action on the progress achieved against these predetermined goals. To improve performance, you need to know what current performance is. Measurement provides the basis for providing and generating feedback, and thus can build the platform for further success or identify where things are going less well so that corrective action can be taken. But what gets measured? Measure the wrong things, perhaps simply because they are easy to measure, and an entire performance management system can fall into disrepute. Use too many measures and you can't see the wood for the trees. For measuring performance, the achievement of objectives, levels of competency, standards of performance, and fiscal outputs are used but the emphasis varies according to partner type. Historically, most vendors have applied performance measures to partners that are easy to measure – sales revenue, compliance with accreditation criteria etc. Increasingly, however, leading vendors are using more sophisticated measuring techniques such as balanced scorecards or ROI (return on investment) analyses. But whilst many companies now use balanced scorecards for managing personnel and operation performance, few have adopted it for partner performance management.

Balanced Scorecarding In 1992, Robert S. Kaplan and David Norton introduced the balanced scorecard (BSC), a concept for measuring a company's activities in terms of its vision and strategies. It gives managers a comprehensive view of the performance of a business. It is a strategic management system that forces managers to focus on the important performance metrics that drive success. It balances a financial perspective with customer, internal process, and learning and growth perspectives. The scorecard seeks to measure a business from the following perspectives:

� Financial perspective - measures reflecting financial performance.

� Customer perspective - measures having a direct impact on customers.

� Business process perspective - measures reflecting the performance of key business processes.

� Learning and growth perspective - measures describing the company's learning. The specific measures within each of the perspectives are typically chosen to reflect the drivers of the particular business. This method, whilst suitable and very effective at providing a comprehensive view of the performance of one’s own business must be adapted in order to measure the performance of an indirect channel.



Balanced Scorecarding for Indirect Channels

Although similar to internal scorecarding, when applied to the measurement of indirect channels, our scorecard approach seeks to measure a business from the following perspectives:

� Coverage – measures reflecting the company’s coverage of geography, markets, customers types and product types.

� Capability – measures describing the company’s capability to perform the selling, marketing and customer support functions required of it.

� Capacity – measures reflecting the company’s current and potential capacity to sell, market and support your customers.

� Commitment – measures demonstrating the company’s commitment to the relationship and to performing the functions expected of it under the terms of any agreements which may exist with the vendor.

� Credit - measures reflecting financial compatibility. We call these the “5 C’s”. There is a 6th ‘C’ – Contribution – measures reflecting the company’s actual fiscal contribution to your revenue and profitability. (As we mentioned earlier, this is the measure most often used today to separate good from bad). ‘Weightings’ can be applied to specific measurement criteria in order to increase or decrease their individual impact on the total performance assessment according to their importance. In the programs we have developed for our clients, we tend to use the term “Partner Relationship Assessment” in external communications – Partners don’t like to be “scored”!

Purpose of Scorecarding for Indirect Channels

Scorecarding forces channel managers to focus on the performance metrics that drive success. In this context, it:

� Exposes strengths and weaknesses within the indirect channel at a macro and individual level in all of the key areas.

� Provides the basis of a relative ranking to compare and contrast performance of one partner versus another and against the best, worst and mean.

� Establishes a set of performance benchmarks.

� Highlights specific areas for improvement or development.

� Provides an objective basis for the allocation of resources and benefits

� Drives joint business planning and implementation. In this context, when fully deployed, the balanced scorecard or Partner Relationship Assessment transforms strategic planning from an academic exercise into the formula for and basis of your channel strategy.



Practical Applications of Partner Balanced Scorecarding

Channel Strategy

The basic completed scorecard provides managers with the means to make strategic decisions. For example, with regard to Coverage – does this channel partner provide adequate coverage geographically and in terms of markets, customers and products? If not, can they be encouraged or managed in order to do so or not? If not can alternative or complementary channel partners be found?

Joint Business Planning

The scorecard also provides an invaluable contribution to joint business planning by highlighting those areas in which investment or development is required in order to achieve mutual business goals.

Channel Segmentation

Once the channel partner has been assessed in each of the key disciplines (the ‘5 C’s), a total score can be calculated and mapped against the sixth ‘C’ – Contribution in terms of revenue, profit or both as shown in figure 9.

Fig 5: Mapping Scorecard Value Against Contribution

Channel partners who map within the upper right hand quadrant are those who are of greatest strategic importance. They typically account for less than 5% of your total channel base by volume. Those who appear in the bottom right or upper left quadrants should be the focus of targeted investment and development activity driven by joint business plans. Any channel partner that appears in the bottom left hand quadrant should be assessed for suitability and or viability. Their presence here usually indicates that they should be replaced and/or alternatives or additions found.



Accreditation

Accreditation is a means of labeling a channel partner based upon their level of satisfaction of accreditation criteria. It was once seen as a form of vendor endorsement and some sort of guarantee of technical competence and quality. Channel accreditation schemes have become less and less useful and relevant in recent years as technology has become increasingly commoditized and customers and channels have become increasingly technically competent. They should only be considered when accreditation is considered valuable to the channel, the customer or ideally to both. Where accreditation is considered valuable, the scorecard quadrant mapping in figure 10 can be used to generate a three or four tier hierarchy based upon a balanced scorecard which may be based upon the ‘5 C’s – for a holistic performance-based assessment or upon other criteria, for example technical competency in given areas. This is illustrated in figure 11.

Fig 6: Converting Scorecard Quadrants into an Accreditation Hierarchy

Channel Program Hierarchy

It is becoming increasingly considered good practice to use the accreditation hierarchy approach shown in figure 12 to create an internal rather than external hierarchical structure. This can then be aligned with the allocation of resources, investment, commercial conditions and program benefits or deliverables.



Fig 7: Converting Scorecard Quadrants into a Segmentation Model

Automated Partner Balanced Scorecarding with PRM

Some PRM systems (RelayWare included) have integrated scorecarding functionality. RelayWare is aligned as standard (though it can be reconfigured to you own design) around the 6 C’s model. Once weightings have been applied, the system will analyze the available data and score each partner accordingly.

Fig 8: Automated Scorecarding

Data is presented in detailed reports, easy to read charts and dashboards. A PRM system makes scorecarding quick and easy and the process can be repeated as frequently as you wish. Analysis is automated and the output presented in a variety of easy-to-read formats to enable you to make rapid and well-substantiated business decisions. RelayWare’s auto-scorecarding can be used to drive a range of further processes including pricing, commercial conditions, accreditation, training and strategic business planning.

Alternative Methods of Partner Balanced Scorecarding

Our own specialist consultancy, ChannelSphere have also developed a unique manual scorecarding process using pre-formatted documentation. Of course we’re sure there are many other methodologies in use but we would like to share ours with our readers. We begin by researching with each client their preferred scorecard criteria for each of the 6 C’s and agree weightings for each.



Fig 9: ChannelSphere manual Scorecarding

We go on to train Channel Account Managers via workshops in scorecarding methodology to ensure that the process comes as second nature.

Fig 10: ChannelSphere Manual Scorecarding

When the Partner scorecards are complete, our documentation provides automated analyses.



62%

45%42%

52%

34%

65%

47%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Scorecard Results

Coverage Capability Capacity Commitment

Credit Contribution Mean Average

Fig 11: ChannelSphere Manual Scorecarding Analysis

Our documentation goes on to produce full scorecard mapping in quadrant form.

Fig 12: ChannelSphere Manual Scorecarding Mapping Results



We then go on to segment your partners to assist in your decision making processes including pricing, commercial conditions, accreditation, training and strategic business planning.

Fig 13: Converting Scorecard Quadrants into a Segmentation Model

Summary Partner performance management is about establishing a culture in which both vendor and partners take responsibility for the continuous improvement of business processes and of their own skills, behaviour and contributions. It is about sharing expectations. Vendors must clarify what they expect partners to do; likewise partners can communicate their expectations of the vendor in terms of tools, resourcing support and. It follows that partner performance management is about interrelationships and about improving the quality of relationships at all levels between the vendor and the partner and indeed between members of the partner network and is therefore a joint process. It is also about planning - defining expectations expressed as targets or objectives and in business plans - and about measurement; the old dictum is 'If you



can't measure it, you can't manage it'. It is a continuous process, not a one-off event. Last but not least, it is holistic and should pervade every aspect of running an indirect channel to market.



Chapter 10: Partner Performance Optimization

Optimizing and Rewarding Performance Performance optimisation can be achieved through a combination of ‘carrot and stick’. In this context that is to say:

� Providing partners with the tools, resources and development necessary to improve performance.

� Rewarding them for good performance and providing ongoing support to promote further improvement.

� Penalizing them for poor performance and, where potential for improvement has been identified, providing ongoing support to promote further improvement.

� Penalizing them for poor performance and, where potential for improvement has not been identified, taking positive action to de-commit further resources and investment or terminating the relationship

Taking the final punitive measures with consistent poor performers is as important as rewarding and investing in performers. Vendors must, after all invest their limited resources where they can deliver the greatest return. But this step should only be taken following an objective analysis ideally through scorecarding.

Developing a High Performance Channel

During this series, we have already examined in detail the core components of partner relationship management as a strategy and methodology. In brief, partner relationship management addresses every phase of the partner lifecycle:



Fig 14: The Partner Lifecycle

By implementing a PRM strategy, a vendor commits to engage in:

� Ongoing communication and knowledge sharing with the partner network

� Ongoing training and development of individual and organisational skills and competencies

� Ongoing motivation, incentivization and loyalty building

� Fostering sales, marketing, support and operational collaboration between partner and vendor and across the wider partner network

� Providing an effective and high quality support infrastructure to the partner network

� Working collaboratively in planning for and achieving success against joint targets All vendors have a fundamental responsibility to develop their channel for the future, not merely to reward it for the past.

Rewarding a High Performance Channel

Personnel performance management is often linked with performance-related pay (PRP), although by no means all organisations claiming to use performance management have PRP. Nevertheless, PRP is an important element in many performance management schemes because it is believed to motivate; it is said to deliver the message that performance and competence are important, and it is thought to be fair to reward people according to their performance, contribution or competence.



A similar approach is often used with partner performance management where performance-related discounts or rebates are made available according to a partners performance against defined targets. Sometimes this is governed by attainment of accreditation criteria but all too often these criteria are too narrow and restricted only to those metrics that can easily be measured. This means that accreditation is usually based on subjective assessments of performance, and that a performance-related discount or rebating policy can often inhibit collaboration because of its individualistic nature, and occasionally lead to 'short-termism'. An alternative to PRP for personnel is competence-related pay, which provides for pay progression to be linked to levels of competence that people have achieved, using a competence profile or framework. By combining performance-based and competence-based it is possible to operate contribution-related pay scheme which means paying for results plus competence, and for past performance and future success. This is precisely the model supported by partner scorecarding and indeed partner scorecarding offers the only methodology for contribution-based discounts, rebates or rewards for partners.



Summary In the coming months and possibly years, we will all be challenged to maintain and grow revenues, reduce costs and improve profitability whilst acquiring new customers and maintaining high levels of customer satisfaction. All this whilst facing the worst economic downturn in living memory. Companies who succeed in this climate and during what will doubtless be a slow recovery period will be those who find efficient and economical ways to gain competitive advantage and leverage it. If your company sells direct, then continue to invest in and develop your CRM strategy to adapt to the changing market conditions. However, if you sell through an indirect sales channel or operate a multi-channel go-to-market strategy then consider implementing a complementary partner relationship management strategy to address every phase of the partner lifecycle:

� Selection o Ensure that the partners you have are the partners you need to maintain and

grow your business. Ensure that you have an intimate knowledge about the companies in your partner network and the sales, marketing and other resources they employ who represent you in front of your customers.

� Segmentation and Accreditation o Segmentation is critical because it aligns your channels to market with the

market’s you want to serve. Don’t implement accreditation programs for the sake of it. Make sure there is something for everyone and don’t create disaffected 2nd and 3rd class citizens amongst your partner network.

� Recruitment o Recruit new partners according to your selection criteria and then only in parallel

with score-carding, analyzing and then developing those with potential within your existing base.

� Development and Enablement o You wouldn’t expect your own staff to sell, market or support your products and

services without thorough preliminary and on-the-job training so don’t expect your indirect channel resources to be effective without a well planned, implemented and ongoing education program.

� Motivation and Incentivization o Sales people typically respond well to being highly motivates and incentivized to

sell. Partner sales people are no different but don’t forget that motivation and sales-person loyalty has to be earned as well as bought so concentrate on providing high quality support and behaving in a consistent, predictable and supportive way towards them.



� Communication o Develop an detailed knowledge of your audience. Target them selectively and

think carefully about message, medium and call to action. Communicate often and well with a clear stated purpose and with an intention to inform, educate, motivate or support.

� Collaboration o Don’t expect your partner network to do all of the work for you. Let them benefit

from your marketing activities with a steady flow of suitable qualified leads, reward them for bringing opportunities to you and establish robust ROI-focussed programs for co-op marketing. Sell together, market together and support together.

� Service and Support o Provide high quality, tailored yet affordable support resources to your channel

and show them that you value their contribution no matter how large or small. Give partners easy access to information and high quality tools and resources to support their selling, marketing and customer support activities. Make everything available online and turn your partner portal into a slick, well-used sales generator.

� Performance Management o Adopt and adapt best practice performance management methodologies as a

means of driving high performance from your channel organization and their personnel. Establish a culture in which both vendor and partners take responsibility for continuous improvement.

� Performance Optimization o Use a carrot and a stick to nurture and develop your partners to improve

performance whilst aligning your fiscal programs and rewards around your performance metrics.

Additional information regarding partner relationship management and associated business processes and systems can be found on our website at www.relayware.com along with a detailed overview of how RelayWare PRM can automate every phase of the partner lifecycle and every component of your partner program. Foundation Network

The Magdalen Centre The Oxford Science Park Oxford, OX4 4GA Telephone +44 (0) 870 601 1090