As channel managers focus on plans and programs for this year, let’s take an early look at emerging trends and predictions for the year to come.
Over the past several weeks, I’ve been interviewing channel marketing executives and managers about the challenges they face growing partner revenue. The interviews are the first step in an industry benchmarking survey we’re working on at SocialRep, in an effort to understand challenges and best practices in partner enablement, sales acceleration and performance management.
Although our focus for this survey is among enterprise IT businesses, we’ve already canvassed a wide range of experiences. So far, our interviews span:
With such a wide range of insights and experiences, it’s surprising to find a lot of uniformity in the challenges, trends and expectations channel managers have expressed.
Here are the top trends and challenges we’ve heard from channel managers planning for 2015:
1. Disruption Will be the Norm
There’s a freight train of disruption rolling through the IT channel right now, and the locomotive is enterprise migration to the cloud. The core driver of migration is the promise of greater business agility at a lower cost from the virtualization of IT. But that simple idea at the core is like a bomb, with an explosion of derivative effects driving changes in security, network access, management, applications—the list is too long to itemize, and the impact travels all the way out to every business involved in managing and implementing these changes. Everyone is having to adjust at every point in the value chain, and the changes just keep coming.
There’s a freight train of disruption rolling through the IT channel right now, and the locomotive is enterprise migration to the cloud.
Channel managers need to recognize that disruption is no longer a periodic cycle, but a constant feature of a world in which the pace of technology innovation continues to accelerate. Long-term planning for marketing programs won’t go away, but will need to be matched with rapid-response capabilities to deal with emerging opportunities and threats from new technologies and competition, meaning…
2. Constant Change Will Require Agility
Stable markets favor proven processes and organizational structures. Disrupted markets favor agility. As changes in technology accelerate, channel managers are learning they need to move more quickly and more decisively, and to incorporate failure and adaptation into their workflows.
In practical terms, this means channel marketers will need to experiment a bit more with smaller partner marketing programs, and smaller groups of targeted partners, to figure out what moves the needle on partner engagement before expanding programs that work to larger groups of partners. This kind of approach will require and collaboration with trusted partners, but will help deepen partner engagement and commitment.
I recently wrote about the? Agile Marketing trend, and plan a channel specific update soon.
3. Partner Enablement Will be a Strategic Imperative
As cloud migration disrupts the value chain, channel partners are having to adapt their business models. Where large IT hardware expenditures brought partners big paychecks when contracts were signed, cloud-based applications bring smaller checks titrated over the life of the contract. This is a bitter pill to swallow for many partners, and will put plenty of companies out of business over the next few years.
In the past, channel managers have been able to rely on big partners to deliver consistent revenue. Now, everyone is scrambling to figure out which partners will be able to succeed and grow their markets. In the short run, most companies are narrowing their partner networks to a short-list of proven performers, and they’re wooing those partners with bigger incentives and more support.
Channel managers will eventually have to diversify their partner networks, and invest in identifying, enabling and accelerating new partners who can drive new business.
Unfortunately, everyone is chasing the same partners, so this strategy can’t be sustained for long. Channel managers will eventually have to diversify their partner networks, and invest in identifying, enabling and accelerating new partners who can drive new business, which is a whole lot harder than it sounds. How do you identify up-and-coming partners who are positioned for success? How do you enable them? How do you support them and empower them to succeed?
These challenges will lead to host of new trends in 2015, including:
4. New Performance Metrics will Guide Partner Management
In the past, channel managers could rely on hard metrics of partner performance, especially the posting of quarterly revenue from sales. But as markets are disrupted and sales cycles remain long, channel managers can no longer wait several months to find out whether partners are making progress. Revenue is a lagging indicator of success, and channel managers need leading indicators to guide the allocation of precious MDF resources.
Already channel managers and service providers are working on “softer” metrics of partner performance, and devising score cards to rate partners on everything from pipeline growth to marketing effectiveness. Expect new tools and techniques in 2015 to predict partner performance well in advance of trailing quarterly revenue.
5. Partner Leverage will Grow
All this disruption will tilt partnership deals in favor of partners, at least in the short run. After all, with so much uncertainty over which partners can grow the market, and so much attention being paid to partners who look positioned for success, demand for capable partners will exceed supply in 2015.
Partners will migrate toward manufacturers and suppliers who are ready to support and reward success.
What does this mean for channel managers? Partners will migrate toward manufacturers and suppliers who are ready to support and reward success. Most cookie-cutter campaigns-in-a-box will remain on the shelf, while successful partners will require more concierge marketing support and customization.
Channel managers with static partner portals stuffed with marketing templates and canned content will find it challenging to keep partners engaged, while those with more customizable offerings backed by concierge support will be in demand.
6. Training and Messaging Will Become More Complex
One of the key attributes of cloud migration is the shift from a focus on hardware to the business outcomes technology enables. IT buying decisions are migrating from the CIO to business line managers who can, for example, procure a cloud-based CRM subscription without bothering—or waiting for—IT.
No one but an engineer wants to buy equipment; business managers want to buy capabilities that position them for growth.
Although there is still plenty of business ahead on the hardware side, particularly as demand for data and bandwidth continues to expand, the future is moving toward selling business solutions. No one but an engineer wants to buy equipment; business managers want to buy capabilities that position them for growth. This is already forcing technology manufacturers to move beyond case studies that are technically dense and anecdotally vertical, to more expansive content with real subject-matter expertise in targeted markets.
One of the key challenges will be keeping partners up-to-date with emerging capabilities, certifications and marketing materials. Channel marketers with fragmented partner marketing systems will be under pressure to streamline partner access points, at minimum with Single Sign On capabilities for distributed support systems. Managers will be challenged to keep materials constantly up to date, and to improve communications and compliance to ensure partners are on point.
The good news is that the best partners will be driving the shift toward solutions-selling and subject-matter expertise. Well, maybe that’s good news…
7. Good Partners will be More Demanding
As capable partners shift toward solution selling, they’ll have to manage the challenges of consultative selling, which typically requires more marketing support and lot more content to develop a market reputation. One of the characteristics of partners aggressively driving cloud-based services is that they’re investing more in marketing staff and programs than partners sticking to hardware and software sales.
These partners will be more demanding of sales incentives, MDF support, marketing materials and programs, and will migrate toward vendors with better tools and programs to help them differentiate their offerings and generate demand. These partners will not be satisfied with pushing canned campaigns to their prospects, preferring programs that are either customized or easily customizable to their market strategy and brand voice. And yes, the next generation of partners does understand the importance of building a brand, and they’re embracing more sophisticated marketing approaches. In fact…
8. Great Partners will Generate Demand
A growing number of reselling partners are focused on delivering business solutions backed by the kinds of subject matter expertise usually found in management consulting firms. These businesses are also investing in the kinds of thought leadership, content marketing and social media presence that helps build the brand reputation of market leaders.
We see a range of partners moving toward marketing and generating their own demand, rather than relying on leads and opportunities provisioned by manufacturers. Among the laggards, a single marketing manager suffices to manage sales events and keep the website running. But at cloud-oriented partners, marketing teams are growing, and often include social media managers. Some partners are hosting their own online forums where customers can access peer-to-peer technical support, others are developing their own training sites with constant announcements and updates on Twitter.
The notion that partners are averse to marketing and have no resources to execute campaigns is becoming dated. In 2015, it will become clear that strong partners are investing more effort and resources in marketing. For those manufacturers who find their campaigns still sitting untouched in their PRM systems, the issue is not the partners, it’s the programs you’re offering.
Which brings us to the final trend for 2015.
9. Channel Marketing Automation Applications Will Grow
Ironically, the same cloud migration promises and challenges disrupting the marketplace are disrupting channel marketing operations: new web-based tools to streamline and automate channel marketing promise significant gains, but they come with migration, integration and management risks. The market for channel marketing automation is expanding rapidly, so this trend can only be expected to grow.
There are a host of new channel marketing point solutions on the market, including PRM, content syndication, social media syndication, lead management and more. Some platforms are emerging to pull pieces together in a single package, but like many overarching marketing automation platforms, they have strengths and weaknesses.
Don’t start with the technology, start by prioritizing the path to partner revenue and eliminating obstacles.
Many of the manufacturers I’ve spoken with expressed frustration with various tools they’ve deployed only to rip out after the contract is up. Many have commented that even with good tools in place, they’ve struggled to drive partner engagement. However, a few manufacturers have found success with more organic approaches, starting with partner engagement through managed marketing programs and adapting technology to fit.
The danger in a growing marketing automation environment for channel managers will be exactly the danger facing all businesses adopting cloud solutions—navigating the hype to solve the right problems with the right solutions. Our best advice: don’t start with the technology, start by prioritizing the path to partner revenue and eliminating obstacles.
SocialRep’s comprehensive Executive Guide to Inbound Channel Marketing is available for free to senior channel marketing executives. To receive a copy, send me? a note at? email@example.com