April 6, 2021 – G2Crowd, the world’s leading business solutions review website, released its Spring 2021 Report on Partner Relationship Management (PRM) Software. Allbound continues to be recognized by G2Crowd Grid Reports due to the responses of real users for each...
The channel ecosystem is rapidly changing and growing. It’s safe to assume that channel sales, as well as your own channel partner program, have had growing pains which stem from two new actualizations:
1) Everything is online
And by everything, we mean everything. A simple Google search will reveal customer reviews, analyst perceptions, the structure of vendors’ ecosystems, and even pricing data are available to whomever is interested enough to find it. Studies show partners complete roughly 60% of their research before even landing on a given vendor’s website. They’ve researched the ecosystem, visited competitors’ sites, and studied the entire software ecosystem. In short, they’ve done their homework before they’re even presented with your pitch.
For channel partners, this means becoming a steward of information rather than a gatekeeper.
2) Cloud consumption is here to stay
The future of channel marketing isn’t a buffet; it’s a subscription service. Spotify, Netflix, Blue Apron, Loot Crate, Dollar Shave Club, Amazon Prime—the success of subscription models with consumers spells a similar fate for the business-to-business side. If you have a credit card you can purchase a product or service, and increasingly those purchases are subscription-based.
This is great for vendors because it’s never been easier to sign up for a complete solution with minimal short-term costs. Yet it also poses some interesting new challenges. For example, it’s simple for users to switch to a competing subscription, meaning they can “game” the market by chasing whichever digital video or music streaming service has the best short-term deal. It’s not different on the B2B end. Your partners and end-customers have the same freedom and access to swap providers. Even if the commitment is on a yearly basis, the structure of that commitment impacts partners’ interest in maintaining a relationship with a vendor. That puts the focus on you, as the vendor, to sustain a quality experience for them.
Those are the two biggest forces driving change in the market; now let’s look at seven items that will help you avoid mishap within the channel:
1. IDENTIFY YOUR IDEAL PARTNER PROFILE
To find the perfect sales partner you first need to understand your end customer. Who, specifically, are you selling to? Is it the CMO or is it the Director of IT? After all, the motivations and pain points may differ greatly based on their title. Then, once you’ve found the buyer, you need to learn about their trusted advisors. Who already fits that role?
Remember: everything is online and the subscription model is here to stay. With those two new realities in mind, you need to think about that trusted advisor who already has the ear of your target audience. As the vendor, you have to then create a program or engagement model that’s attractive to these particular partners.
If you’re unsure who your contact regularly consults with for advice, just ask them! Additionally, learn what they value when considering their choice of advisor. Asking your target customers about their expectations enables you to start building a profile of your ideal partner and learning exactly what they expect from you as a potential vendor. Are they going to implement? Are they going to resell? Alternatively, are they merely going to refer a lead back to you? Answering these questions will help build a profile of what you’re going to provide as a vendor, as well as what you want your partners to accomplish.
This leads to other questions about what type of partner model works best. Consider whether you should you start them under a referral model or a reseller model. In most cases it’s a good idea to think about it from the partner’s perspective: What’s in it for them? How do they make money working with you? How are you going to get their mindshare?
Likely, they want a robust financial package. You’re just one piece in a larger money-making puzzle. If it’s really easy to sell your product and it moves in large volumes, then they don’t need to have huge margins to want to keep selling it. However, if it’s difficult to sell and takes a long time to close, then you have to consider your partners’ return on investment and how to financially make it worth their while.
So let’s think about the different types of channel marketing partnerships. Here are four of the most common types:
1. Affiliate Partnerships: Partners use their website and audience to drive traffic to your site, and in return you pay them a percentage commission on any sales that traffic produces
2. Referral Partnerships: Trusted partners refer qualified customers to your business, and in return you pay them a percentage commission on any sales that traffic produces
3. Alliance Partnerships: Partners in related businesses share customers with your business, spreading awareness and selling each partner’s products in exchange for a percentage of sales revenue
4. Reseller Partnerships: Partners purchase goods or services from your business with the intent to resell them, often adding value through additional services
Profiling your partners like this can help organize your channel strategy. Rather than defining each partnership with a rigid label, try to think of these relationships in terms of what they do: Are they referring? Are they reselling? Or are they managing services?
Often partners’ function crosses a number of disciplines and services, so holding them to arbitrary definitions can be a bit limiting. So don’t think of your partners as a collection of nouns, but as verbs instead. What do they do?
2. UNDERSTAND THE PARTNER JOURNEY
It’s surprising how many vendors never consider their partners’ journeys, starting from the very beginning of a relationship to the point of being a revenue-contributing member of a channel ecosystem. Understanding that progression is critical if you’re going to sustain or build new relationships.
It all ties back to those two new realities of the marketplace: everything is online, and subscription models are here to stay. Before potential partners even click on your website, they know whether they want to collaborate with you based on their research.
So what is the partner journey? Let’s take it step by step:
1. Awareness: The partner explores new products and technologies, potentially seeking vendors. As much as 70% of partners learn about new technologies via vendor events!
2. Consideration: The partner evaluates products, technologies, and potential vendors. On average, a partner will consider two or three different vendors at this stage and weigh each of their pros and cons.
3. Decision: The partner selects the product or technology with which to move forward.
4. Experience: The partner engages with the vendor. At this stage it’s important to bear in mind: they already know the technology or product being sold, so much of the resulting relationship is a measure of personal interactions.
5. Growth: Finally, success is achieved as the partner continues to invest in the relationship. However, don’t think the journey ends here, as as partners get rid of 1/10th of their vendors each year!
Aligning yourself with your partner’s journey can strengthen relationships while also opening avenues of discovery for other potential partners. By promoting a robust experience for them—one that engages each of the five stages in the partner journey—you can help foreclose or at least mitigate partner losses.
One tool no vendor should neglect is content, such as social posts, blogs, web content, white papers, eBooks, videos, etc. Well-written pieces can strengthen partner training, as well as help them better communicate with their customers about your brand. With this in mind, create your copy with a specific audience in mind, like your partners or their customers, to drive home the most important points with clarity. Also, be mindful of the medium that will most resonate with the audience. By offering your partners a repertoire of ready-to-go materials for them to utilize in their sales efforts, you make their lives easier.
3. ENGAGE IN COMMUNITIES
Success in today’s ecosystem begins and ends with customer engagement, which can take on many forms. Social media has democratized access to markets but ramped up competition exponentially. Cutting through all the noise has never been harder.
It’s not enough to write a single blog post or tweet once or twice a day and hope your customers line up to take your business. You need to sustain activity, respond to inquiries, share media, and create interesting content that captivates people. It may take months or even years to see the kinds of returns you’re looking for, but once a community forms around your niche, you should start to notice peripheral interest for you and your partners. That’s how a community forms. And remember, communities are not top-down in structure. You can’t swoop in and dictate the terms; you’re there to participate like any other.
To find the right community for your market, you need to once again think about your target partners’ journey. Where are they hanging out? What are they reading? Do they actively participate in any associations? What conferences do they attend? These answers should lead you to the communities in which your target partners live.
Engaging in the right communities also supports the first two objectives in this book; it helps you develop a profile of your ideal partners, and it helps you empathize with their journey.
Go where the partners are, and don’t expect them to come to you. As an equal in that community, you’re already showing appreciation and recognition for their contributions to it, thereby forging new relationships for future opportunities.
4. SHIFT TO DIGITAL MARKETING
Industry leaders and thought leaders are moving to digital marketing ecosystems en masse. To understand how we need to make two distinctions: the first is what we called “to partner” marketing, and the other is “through partner” marketing.
To Partner Marketing: This is where you’re consistently digitally marketing to your partners. As much as we want to believe our partners are solely selling our product/ service, they aren’t. The health of your relationships with partners doesn’t end when onboarding ends, it is a continuous effort throughout the partner lifecycle. Marketing to your partners and giving them the tools that they need to sell effectively for you ends in a win for both of your teams.
Through Partner Marketing: Market Development Funds (MDF) are budgets allocated to partners’ digital marketing activities, such as social, email, Hubspot usage, or a pay-per-click (PPC) campaign. This shows that you’re willing to invest in their success, as well as strategically position them to raise awareness with relevant markets who have yet to visit their site.
5. FOCUS ON THE PARTNER EXPERIENCE
How do you score the experience your partner is having with you as a vendor?
Easy: You measure it.
Believe it or not, it is possible to measure partner experiences through strategic program KPIs. There are many organizations that do this through things like partner satisfaction studies and experience studies. These help provide insights into your partners’ experience with your systems, your people, and the journey of getting from a quote to completion.
Everyone knows about customer experience—there are thousands of books about it on Amazon— but few people really take the time to understand the experience of partners.
It comes down to this: the better your partner’s experience, the better their engagement with your organization. In turn, this should lead to better sales. The major takeaway? You are responsible for a positive partner experience beyond the first 90 days of onboarding. Rather, it’s ongoing. It involves the partner account managers, service, support, training, and, of course, tools.
Recent research shows 80% of partners’ experience with your organization relies upon your systems and tools. And they like it that way! Just like consumers prefer to go online to buy flights, order food, or pay bills, so do your partners. They want to be able to do research or gain access on their own time. That entire experience directly influences a partner’s willingness to maintain a relationship with you as a vendor. To reiterate a point from before, partners remove 10% of vendors on a yearly basis, so it’s important that you provide a positive experience that is competitive with your partner’s other options.
6. EDUCATE, RECOGNIZE, & REWARD PARTNERS
To keep customers happy and maintain those sales, partners need to facilitate long-term relationships with them. That puts the burden on you as the vendor to provide partners with thought leadership and training that they can leverage to show value to customers. When companies start investing in partners a little bit more than just cutting them a commission check, everyone wins.
This hearkens back to the two new realities of everything being online and everything purchased under a subscription model; this applies to customers, too. It’s easy for them to switch services, so merely landing their business isn’t enough. That value has to be sustained and proven to the buyer over time, reinforced by your partner’s knowledge and messaging.
You, as the vendor, can support partners in that mission by giving them all of the resources they need in one quick and accessible place. Have a partner portal that not only allows them to quickly onboard, but is also a hub for the content they need to sell successfully. Investing in your partner program with a partner relationship management (PRM) tool platform could be the difference between your partners feeling supported, and feeling like another item on your to-do list.
Make your partners’ lives easy by having a content library, talking tracks, co-marketing, and other tools that they need when they need it.
7. MEASURE PARTNER PROFITABILITY
Just as you need to understand the partner’s journey to equip them with all the tools and resources needed to do their job, you also need to measure their profitability.
All too often, partners face numerous financial roadblocks to landing a sale. They often have to enable themselves, build their own solutions, or package your product alongside others to pitch a more attractive solution for their customers. Sometimes, a lack of leads or a narrow sales cycle is the problem. Perhaps your partners have to reach an entirely new market. All of these are impediments to their success. Undoubtedly, they’re estimating costs of personnel, sales timeline, overhead, etc. You, too, should be aware of this.
Some partners might share their profitability assessment with you, especially if you ask for it. You can also use software to calculate your partners’ profitability. Whatever your means of finding out, industry leaders know what their partners stand to earn. They know, and if you don’t know, then you’re working at a serious disadvantage.
TO SUM IT UP
The marketplace is changing. The channel is more complicated than it’s ever been, and there are immense challenges for vendors and partners alike. Everything is online, so the customer has never been more empowered to find the right solution for their needs. Moreover, the subscription model is here to stay, giving clients greater freedom to switch providers or to drop vendors.
To tackle these challenges, vendors need to consider the perspective of every organization in the channel. What is their motivation? Are they looking for a solution or just cash in pocket? What is the experience of the partner, and are their tools easily accessed in an independent, digital ecosystem? Do they have everything they need to drive sales, and are those needs being met in a way that drive their own profits?
As the vendor you need to need to be able to answer all of these questions.
EMPOWER YOUR PARTNERS.
When your business relies on partners, it’s vital to empower them to sell better and more efficiently. Allbound is a flexible Saas platform that helps any size business recruit, onboard, measure, and accelerate growth through sales and marketing partnerships. Make every engagement between you and your partners-and between your partners and their prospects-simpler, productive, rewarding and engaging.
THINK. MEASURE. DO.
PartnerPath, LLC is a partnering development firm wholly dedicated to helping companies elevate the impact of partnering. They achieve this by effectively designing, implementing and optimizing channel and alliance models. They offer services ranging from channel models and program development plans to partnering operations and program execution. For more information, please visit partner-path.com.
Download the “7 Tips to Be at the Top of Your Channel Game” eBook PDF
Input your information here to receive full access to the PDF.