I’m glad to see momentum building behind #channelweek, with some great presentations and discussions about partner marketing and sales. There’s a lot to discuss. Channel marketing is one of the most complex and least appreciated areas of marketing. It’s a game that’s hard to win and easy to lose; it requires uncommonly smart, creative and diligent players; and it’s almost always expected to deliver outsized results on a tight budget.
So it’s all the more important to break out of the marketspeak and talk about what’s really going on: The IT channel is a mess. It has been for a long time. It has not been merely disrupted by cloud computing, it’s been detonated. But as long as business is good selling “solutions” to vendors with more dollars and desperation for pipeline than patience to figure out how to rebuild their partner ecosystems, we’ll continue not to see how challenging the situation has really become.
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” -Upton Sinclair
The 80/20 Rule in the Channel
Let me illustrate with a simple example. There’s an age-old Pareto principal that has long been upheld in the channel: 20 percent of your partners will generate 80 percent of the revenue; 80 percent of your partners will only drive 20 percent. Why then is so much budget and MDF dedicated to serving the underperforming partners?
From campaigns in a box that champion partners would never push, to marketing automation systems that under-performing partners only use because they can be set on autopilot, every 18 months the industry goes from one trendy fail to the next. The primary unifying trait is that the initiatives are focused on partners that will gladly cash an MDF check as long as it doesn’t require much effort—which in turn creates a secondary market for accountability systems and metrics.
Why would anyone in their right mind spend a big chunk of their budget chasing the 80 percent of least performing partners? Because they don’t see any other options. The IT reseller apple cart has been overturned, and no one really knows how to get the apples back into the cart. Maybe if we give partners an outbound campaigning platform (just like every other vendor’s), with pre-packaged content (just like every other vendor’s), which partners can easily distribute without lifting a finger, maybe the result will be an efficient and scalable pipeline in the middle of one of the most disrupted technology markets in history. Who do I make the check out to?
Chasing Diminishing Returns
Looking to make gains on 20 percent of your revenue by sinking enormous amounts of your budget into automation for the low-performing end of your channel is not a winning strategy in a highly disrupted market. That approach will only produce incremental gains from automation efficiencies. And that’s if the programs work. Partners are going out of business every day because they can’t, or won’t, navigate the leap to cloud-based services. They’re not going to make that leap on the back of one more canned and automated campaign.
So when you hear people selling the next frontier of “Through Partner Marketing”, I would counsel skepticism. Yes, partners do need marketing support, direction, resources, tools and most of all good content. But dressing them up in your logo hat and t-shirt is not going to cut it. The conceit of Through Partner Marketing, as the name signifies, is that your partner is a vessel through which you can reach out and engage your market. That’s more a franchise than a channel model in today’s market, and it’s a fiction only software vendors, consultants and your least performing partners believe.
The real game in a disrupted market is Partner Enablement—that’s not a stage in the process, it is the game. Here’s why.
Disrupted vs. Stable Market Strategies
When markets were stable, business challenges and solutions were also stable and slow to change. Partners learned a way to build a profitable business, and the relationships and workflows barely changed for 20 years. Partner execs started spending more time on the golf course while order fulfillment was handed off to staff, and everyone was happy. In that kind of environment, gaining efficiencies and scale on channel sales is a productive strategy, and a vendor approach that looks pretty close to franchise marketing makes sense.
In a disrupted market—much less the kind of detonated market we’ve gotten from cloud—business challenges and solutions are changing every day. Partners have to navigate deadly sea changes just to survive, much less build a successful pipeline promoting your products. Some partners learn to survive off MDF: get certified with a few dozen vendors, sign business plans, cash checks. It’s a living. But those aren’t the partners that are going to move your needle, and your big investments in campaigns and tools are only feeding that herd.
The partners you want to encourage are the partners that are figuring out how to build a new business, developing solutions that customers will pay for. These are the kind of partners we call Contenders. They aren’t champions today, but they are a segment hidden in the herd of low performers that are the best candidates to be champions tomorrow. They can extend your reach into local and emerging markets, but they are motivated primarily by building their own brand and innovative solutions. Instead of looking at these partners as vessels through which you can deliver your marketing, you need to focus instead on where your shared interests lie, and enable your partner to build their brand on that foundation. The stronger you build that foundation of shared interest, the more energy your partners will invest in extending your brand while building their own.
Redefining Partner Enablement
To succeed, Contenders need enablement. They need a crash course in branding, positioning, segmentation, content marketing, SEM, and especially customer service. They need tools that help them generate their own brand voice, with a strong position and authentic stories to tell. That’s what they need to be able to add value to your brand, and it’s a tall order. But telling yourself that partners can’t do that, or that it’s too hard to execute, doesn’t solve the problem and doesn’t rationalize continuing to feed the herd of pretenders.
The way to solve the problem is to come up with ways to consistently identify, enable and accelerate partners who can succeed. That part of the process is a useful application for automation. Because Contenders show up differently than Pretenders. Their profiles are different. Their digital body language is different. And when you put the right kinds of enablement programs in front of them, the way they perform is different. These differences are great hooks for AI and NLP, with on-demand programs that help you attract and qualify partners who are true Contenders while pushing Pretenders onto a separate track.
When you’re able to consistently identify, enable and accelerate Contenders, you can communicate to Pretenders how they need to change their behavior to win. Stop rewarding Pretenders for collecting checks for minimal effort, and focus your budget on rewarding Contenders for building businesses that will extend your reach.
Focus your partnerships on building your respective brands on the foundation of your shared interests. That is the strategy for reinventing your channel with a new breed of partners who are motivated to help you succeed. If you do that well, you’ll create the kind of stability from newly established solutions where Through Partner Programs will become more viable to generate more efficiencies and scale. If you agree or disagree, I’d love to hear what you think.
Chris Kenton is the founder and CEO of SocialRep, a social selling enablement platform with an emphasis on the worldwide IT enterprise channel.