An Interview with Daniel Graff-Radford for Website Planet. When talking about PRMs, Allbound is one of the first names that come up and with reason. We talked with Daniel Graff-Radford, CEO of Allbound, to know more about the platform, understand the company’s...
The Partner Channel Podcast Episode #9
In an Era of Automation,
Partner Experience (PX)
In this episode of the Partner Channel Podcast, David Thomson is back and talking with Daniel Graff-Radford and Jay McBain, Principal Analyst of Channels, Partnerships, and Ecosystems at Forrester. Jay discusses his recent research around partner experience overtaking customer experience as a priority for many companies and the trends he sees impacting 2021. Also on the table: Why automation should be at the forefront of channel management.
Dave Thomson: Hello, everyone, and welcome to the Partner Channel Podcast, The Voice of the Partner Channel Community, I’m Dave Thomson, and today I’m joined by Daniel Graff-Radford, CEO of Allbound and Jay McBain, principal analyst of Channels, Partnerships, and Ecosystems at Forrester. So welcome, Jay. Thank you for being on the show. I wanted to kick things off. If you don’t mind walking us through a little bit on your background in the channel and how you ended it up at Forrester.
Jay McBain: Yeah, sure. I’ve been in the channel for twenty-six years. I started my career and I spent 17 years leading channels at companies like IBM and Lenovo. I then joined the company that built channel software for MSPs called Auto Task, which got acquired by Datto which went public a few weeks ago. And now we’re like four billion dollars. And because I’m still working, I was not an equity owner of that company. I then left with the founder of Auto Task and we started another channel software company that did AI and some mobile and social media and some fun things. And that company sold. And I’ve been an analyst now on the channel for three and a half years.
Dave Thomson: Great, great. So this is more of a two or maybe even a three-part question, but, you know, in some of your recent research, I know you mentioned partner experience will soon catch up and even overtake customer experience. So can you talk a little bit more about what you mean by that and what trends you saw in 2020? And frankly, what’s to come in 2021?
Jay McBain: Yeah, absolutely. And I think 2020 accelerated a lot of the trends that we’re seeing for obviously a lot of reasons. But, you know, I always start every conversation to say that seventy-five percent of world trade goes indirectly. Almost every industry, almost everything you buy as a consumer, everything you buy as a professional, moves through others in some way. And so when you start with that premise, you know, companies have become very obsessed, obviously, in the last five years or so about customer experience. And really, that’s the journey mapping. It’s looking at every moment in that customer’s time. I think what partnership and channel leaders have wised up to and companies have wised up to. Given the fact that you don’t own those moments in the majority of cases you think you do, you’d love to with your direct marketing and your direct sales teams and things like that, but you just don’t. So they’ve wised up to the fact that they’ve overlaid their partner journey on top of this customer journey. And as you think about these moments early in the journey, these digital moments, you think about vendor selection, you think about the transaction, you think about this long term retention and renewals, and you’ve got this partner journey. There’s a direct equivalent or correlation between this driving a great customer experience while at the same time and specifically focusing on driving a great partner experience. And we now know that doing those two things in tandem drive, better revenue, better profit, obviously better partner loyalty and motivation and incentive and other things. So it’s just this is just kind of a coordination that makes sense, but it’s really getting a lot of focus.
Dave Thomson: Got it. So what do you see as some of the major 2021 and beyond it as it relates to that?
Jay McBain: Yeah, I mean, one of the major trends that we were calling for early in the year before covid, I called it a trifurcated channel. But, you know, I’m talking to vendors now. And in the technology industry, for example, there’s ten thousand different companies. We talk to run channels and they’re starting to look at their channel a different way. We used to call it transacting and non transacting for a while. I called it shadow channels. But again, when we go back to this partner experience and you overlay those parts of the customer journey, now, that point up until vendor selection with the changing buyer, with all of the importance on digital influence, is becoming its own channel. And there are channel partners there that are a lot of them, nontraditional partners, nontransactional partners that need programmatic elements around them. So it wraps itself around not an extension of your current channel, but almost it’s own living, breathing channel. And then with the move in 2020 to subscription and consumption, where every company in every industry is now thinking, at least seventy-six percent of them, according to Accenture, are thinking about moving their businesses into a subscription consumption model where ecosystems kind of take over as the main driver. The original transaction, which we’ve been focused on for thirty-nine years, really becomes the first 30 days with the customer and all of the effort then goes to driving adoption and stickiness and up-sell and cross-sell. So after the transaction you’ve got this third channel. And so what happened in 2020, you’ve got all these major companies that now have programs and a lot of them are driven by Allbound that look like build, sell, and service type of programs. There is a sell element, but it’s one of the three major elements and they’re starting to look at this customer journey, partner journey that never ends. It renews every 30 days forever in a successful company.
Dave Thomson: And so, Daniel, I’ve got a question for you with, you know, this year essentially bringing automation to the forefront of partnerships, you know, their very clear paths for automation. But it’s also important not to forget about personalization. So trust isn’t lost in that partnership. Where do you feel that CAMs should leverage automation versus personalization?
Daniel Graff-Radford: Well, I’d be very interested in a macro perspective, but we get this sort of question all the time when people are looking at partner relationship management, a lot of times it’s because they’re pretty overwhelmed with all the manual tasks that are going on in signing up partners and getting them enabled and tracking them. And they show up with a zillion spreadsheets and want us to automate the whole darn thing is what they say. And there is something to be said for adding lots and lots of automation, but also lots and lots of personalization. And what I mean by that is there are lots of the things we can do as a partner is being brought on to automate some of the training, to automate some of the deal registration so that you can make it really, really easy for these two people to work together asynchronously and a lot of cases or synchronously if they’re pursuing an opportunity together, you know, on the personalization front. I would point out many of our customers that are doing a really good job of this, where they test the heck out of all the automation so that even if you’re looking to have lots of personalized interactions separate from the automation, you really test that automation, make sure feels personalized, that you are segmenting and grouping each of your partner types and even subtypes and regions and so forth so that you can give them a really, really bespoke experience that expands as their partnership with you expands. And so by testing this, you can make it feel more natural. And so automation is really great. It helps that partner to come in and do work with you very quickly and get out. And that will allow you to scale really, really fast. But if you don’t test the heck out of it and make sure it’s very logical on the other end, you’re going to lose your audience really, really quickly. Jay, are you seeing with this trend towards automate everything, any sort of things out there in the market?
Jay McBain: Yeah, I’d say two things. One is that we track customer spending. We survey six hundred ninety thousand people every year. And the number one spending area globally in technology is not cloud acceleration. It is actually automation. So people are thinking about automating all kinds of their business. The pandemic, you know, drove this exposure where a lot of processes and workflows and business logic and the way you run your company was developed by humans and they put themselves in the middle of every process as a gate. And so talking about customer and partner experience, you’ve got a channel program that has a bunch of human gates in it. So companies are really interested in moving humans into more parallel and they’re using tools like Allbound to use kind of no code, low code ways of moving humans into doing the things that drive a better partner experience and letting partners have the ability through self-service high degrees of personalization. And if I go back to my previous comment scale, you know, when I talked about a trifurcated, three parts of your channel program, this doesn’t mean that your channel partner program troubles actually the average program in an ecosystem goes up by 10x.
Jay McBain: And if you think of your stressed environment today and how hard your people are working and then ask them over the next three years to work 10 times harder, it’s not coming. There is no more budget.
There is no more gross to net margin to fund it. So therefore, there is no more spreadsheets. There’s just no way you can manage an ecosystem in a manual sense. And that’s the biggest change that we’re seeing. And I liken it, I always like to use kind of metaphors and analogies and things like that. But think about when your bank you built a good enough app for you that it’s now been you think back years to the last time you’re actually inside a bank and had to, you know, use the teller. And the fact is, it’s all they did is everything that teller could do on their computer is you can do now on your app. And that’s what partners are requesting. And that’s what Allbound is building. This idea that there is nothing a general account manager or somebody in channel operations can do with some separate system that can’t be offered up directly to that partner above the fold and allow them to customize and personalize it to the level that they’re highly successful.
Dave Thomson: That’s really interesting. So as far as you think about that moving forward, what do you feel is going to be the most difficult challenge for the companies as they think about it in transition?
The difficulty is in the complexity of the channel, you know, we always try to think of it as some linear thing that can be explained and things like that. There’s just so many moving parts. And, you know, to any channel professional, they think of it as more celestial. You look out in the sky and there’s just stars and moons and comets and all kinds of things going on at once that you don’t control the solar system. You’re not the sun that everything rotates around. There’s just so many moving parts. So when we know that the average channel program, a mature channel program today has a hundred different elements that run inside Allbound. And you think about the journey again or the experience right from that point of recruitment to onboarding, education, training, certification, incentives, motivation and loyalty, enablement on the sales and marketing and engineering side the co-selling the co-marketing. Underneath all of those parts of the journey, there are dozens of elements. So you stare at this thing where you’ve got hundreds of moving parts inside an ecosystem that’s growing by 10x in the next couple of years. And trying to do the math on that makes your head spin in terms of permutations. And then you have the added complexity again of how do I implement these hundred things in a non-linear channel so they’re not transactional or a nontraditional channel where people are bouncing around and it’s not anchored to a transaction. You know, how do I do that in a new world where I may have to attribute revenue as opposed to measure revenue, where I have to monitor adoption and look for somehow KPIs and measurements around integration, and there’s a bunch of product-led areas that come into the fold. So the channel data may go up by a hundred times where your channel ecosystem goes up by 10x and the complexity of handling all those moving parts is really to the quality of your telescope.
Yeah, that that makes a lot of sense. So what kind of attributes or what is you know, when you think about the channel leaders moving, you know, moving forward and kind of what they have to, you know, some of the struggles that they’re going to have to deal with and I guess opportunities to take advantage of. How do you see their role developing over time? What are some of the key factors that they need to learn to be successful in 2021 and beyond?
Jay McBain: Yeah, so I get to field a lot of calls from channel leaders, from the largest of large organizations right down to start-ups and, you know, usually the first part of the phone call goes something like this. “My CEO is one of the seventy six percent who think the future of our company is reliant on building an ecosystem”. So that’s step one, step two is “I understand, you know, I’ve got a much broader set of partners in this ecosystem. I’ve got alliances, I’ve got all these influencers and retention style partners and things like that. I’ve got to figure out how to structure this and what our go-to market and roads to market are going to look like”. And then the next part of the call is companies are radically changing their business models. Just in the last 30 or 60 days, you saw IBM, for example, jettison their entire services organization. I worked there 17 years and I started the day Lou Gerstner started to build out that services organization with four hundred and fifty thousand people. Will IBM as a company tomorrow, that will be one hundred percent subscription consumption model. A couple of weeks before that, Michael Dell announced that for the entire Dell Technologies, one hundred percent consumption. All week before that, Chuck Robbins announced that at Cisco. And you won’t be able to buy a switch or a router, it will all be subscription and consumption model.
Companies like HPE has been on this for three years, but they announce they’re going to get it done in 13 months in 2022 into that one hundred percent. So I’m talking about the whole legacy that we’ve been in and for thirty-nine years in the technology industry are completely and publicly changing their business model. So if you’re the channel leader in one of those companies or one of the other companies that are thinking about it, you’ve got to completely rethink everything you’ve done for decades. And you can’t just perfume up your program like you do every year or rename it and announce it as something new. No, you’ve got to seriously transform and automate from top to bottom
Dave Thomson: It’s really interesting. So the question for you, Daniel, you know, one of our most recent first-party studies uncovers that partner actions that lead to revenue by a specific partner type. You know, what do some of the most successful channel managers do that that keep partners coming back and generating revenue in you in your experience?
Daniel Graff-Radford: Yes, so just like what Jay is saying, as people are looking to transform their channel and keep track of this very broad set of actions that are happening in a very diverse channel. One of the questions we were constantly getting is what is the type of monthly partner engagement that I, as a channel leader should be looking for, the digital body language, if you will. That shows that I have a growing and healthy channel. What are the leading indicators that lead to revenue? And so we surveyed our hundreds of customers and got some amazing responses, amazing stories. And we collated that into some data and some tactical advice that is segmented out by partner type and it’s free to download on our website. But just a couple of things that I thought really stood out to me when I was looking through some of the advice, you know, was number one in the idea of a referral. It might seem obvious, but you need to think about the level of the relationship that you have with this referral partner. People refer you business for that referral fee. Sure. But more because they believe in you. And if they think that they are helping, that they’re helping a company they believe in, meet someone they really like, that really makes a big difference. So, for instance, you know, you see people referring each other Peloton’s, you know, people that are on Peloton love their Peloton. And so they’re referring this out to their friends and family because they believe in it, not just because they’re getting something off their monthly fee, which I’m sure they love, but they want to feel like they’re part of something that they love.
And so when you have a referral business thinking about those winds and those amazing things that are happening in your company every day. How do you get that information to your referral partners so that they feel as excited about referring you to their coworkers and former coworkers out there in the wild? So it’s not just got to do with them making money with you got them believing in your cause. So if you can make them, you know, really believers in what you’re building, they’ll bring you business because they believe in it and it makes them look great for bringing something great to their friends. Just one more item that you want to kind of understand here is on agency partners. One of the things that agency partners are frustrated with is that they’re getting information late. So making sure that maybe even presenting some of those updates about your companies, they feel like they’re in the know. So when they’re talking to their customers it almost feels like they can talk about the inside of what’s going on inside of your company. So as you’re sharing that information, thinking about the timing, even if it’s hours, different moments different, that you’re able to make the partners feel like they’re inside of your company in a certain sense and inside of that partnership and that they’re helping to share that information out. It will create a really good platform forward for you anyway. There’s a lot of data in there and all sorts of partner types, but people are always looking for what are some tactical examples that other people are using to create that monthly partner engagement metric that leads to revenue down the road.
Dave Thomson: Interesting. What are your what are your thoughts Jay?
Jay McBain: Yeah, I just take a historical view on this. We’re kind of in this third phase of sales and marketing, you know, 1999. We went through about a decade where sales itself, direct sales, moved from an art to a science. You know, you went into the decade thinking you manage your territory with your gut, that you’re born to be a salesperson. You exited the decade managing your territory and your leads and your revenue to the seventh decimal point. You know, you entered the next decade in marketing thinking that you spent 50 percent of your marketing dollars were wasted. You just didn’t know which 50 percent was really funny back then at cocktail parties. When you exited the decade with managing all of your campaigns and levers and dials to the seventh decimal point. And you were competing in the boardroom for investment against the head of sales, saying that a dollar spent in marketing was going to drive more than hiring a new direct salesperson. In those two decades, we kind of lost sight. We had blinders that again seventy-five percent of world trade was indirectly. Direct sales and direct marketing may never get involved in most deals. So in the tech industry, it’s sixty-four percent like every industry has a pretty large number.
So now in this decade, we’re starting to get reminded that the PRM solution, the partner management solution, is less of a tool kit to do all those hundred elements and it’s more of a lead to revenue engine. So you know what Daniel said about referrals, those affiliates and affinity and advocates and ambassadors that show up early, those influencers being able to attribute that early action in a digital journey with your customer right through to close. And then obviously the close isn’t close anymore because it’s subscription and then the renewal every 30 days forever. They’re asking more out of their technology and they’re stepping into the boardroom now at that seventh decimal point level saying, hey, spend that dollar with me. I know that in the channel I can drive them more with a dollar than marketing and sales can from a direct perspective. And this is, I think, what Allbound is driving and this is the new decade that hopefully we step out of this decade with the head of ecosystem, the head of channels, driving a lot of the investment and a lot of that lead to revenue processes and performance for our customers and for everyone in the industry.
Dave Thomson: Yeah, absolutely, so this isn’t a this is a I guess the last question before we go to the final four with you, Jay, but not necessarily a journey related question, but no doubt we have thousands of channel leaders listening to us right now. What would be your two pieces of advice for anyone in a channel leadership role right now?
Jay McBain: Yeah. So the first piece of advice and I don’t think this has ever changed, is the obsession around your customer. Once you stare at a customer and by the way, there’s thirty-five million potential types of customers in the technology space. Again, we’re looking out at stars and moons. There’s a lot going on. But once you look at that heat map and figure out what kind and what role of buyer that they are, you know, if they’re buying business applications, there’s a two-thirds likelihood that they’re not in IT. So are you calling on the right buyer, are you calling in the right industry, and subindustries? Where is your success been across two hundred ninety-seven subindustries? Where is your success been across geography, state, province level, country level? Where is your success been across the segments, sector, and size of customers. Now SMB alone has six different segments inside of it. Where is your success been? Across the portfolio of products in technology. We used to talk about hardware, software, and services. Now there’s twenty-six categories with two hundred subcategories. You know, security has seven layers and 17 layers below that, just that one category.
And then finally you can start to think about a channel that is adjacent to and overlaps. That heat map because there’s going to be 16 different partner types that wrap around your buyers when they go through that digital journey. On average, they’re going to bring in five-channel partners to help them, not one. There is no single protocol. There is no trusted advisor anymore. And the majority of your prospects, your customer, are going to get to vendor selection without ever talking to a salesperson or filling out a web form with correct information. So you’re getting into the point where you’re going to lose a deal without ever knowing there was a deal. So part of this ecosystem idea and part of all of this is wrapped around this customer obsession of figuring out all the right partners, the right communities that they’re in, what they read and where they go and who they follow, and to be able to do all of this through the lens of your ecosystem. And I think that’s going to be the determination of winners and losers over the next decade. The companies that do this really, really well.
Dave Thomson: That’s great. All right. Well, let’s get into enough with the softball questions. We’ll get to the hard-hitting questions here with our famous final four, starting with number one. So if you and you might already have one. But if you don’t, what is one superpower you wish you had and why?
Jay McBain: I always wish I was could be invisible. And it was kind of this odd thing, maybe because I’m an analyst, but it’s this proverbial fly on the wall. I mean, whether you’re looking at major events in history, whether you’re looking at politics, like sometimes I would just like to be that kind of fly on the wall, you know, whether it’s inside the Oval Office or inside, a major thing going on.
But I just always get this fascination with people and things like that and how the world kind of works and the way we think it works and things like that. And, you know, I’d love to fly. I’d love to do all the other superpowers, but just that idea of being invisible would be, I think would be very interesting.
Dave Thomson: All right. So question number two, one mistake and one success you’ve had in the channel.
Jay McBain: Yeah, I’ve had lots of mistakes and I tend to write a lot. I’ve had a blog running for twenty-six years, so I tend to publish a lot of mistakes I’ve made along the way. Probably the biggest mistake I don’t think I’ve ever mentioned publicly, but I hosted when I was at a major Fortune 500 company, I flew a bunch of my partner leaders down to North Carolina for a big tour and everything else. And, you know, it’s a great thing. And when we flew home, a plane full of partners, I also ran direct. So I had kind of a multi-part of my job. And so I had a big executive presentation the next morning that I opened up on my laptop without a screen blocker. And here I am on the front of the plane with all of my partnership leaders. Look at the CEO level working on a direct presentation. And one of the leaders who I think watched in between the seats called somebody who called somebody. And I got called into the office the next day. And I think that company realized that maybe it doesn’t make sense for the head of channel to also run direct, and so that was my mistake and obviously, it changed some big things in my role. In terms of success probably was the community plan, and it was a measurable success.
Again, another large Fortune 500 company understanding when I moved to the US that I didn’t know anyone. And so I use this Malcolm Gladwell Tipping Point law of a few strategy. And I looked at all the magazines and all the podcasts and I looked at all the events and I looked at all the associations. I looked at millions of things and I tracked five thousand people and I scored them all. But I got to this list of top hundred people that were most influential, most visible, and one by one, a Midwest farmer. An endorsement turned into ten million dollars. That cost me five thousand. You know, a magazine owner was ten million dollars for five thousand. So I had to fly to Beijing and talk to the CEO and say how one hundred and fifty thousand dollars turned into three hundred and sixty-five million in revenue in the channel in the course of one year and took our company from number three market share globally to number one. And that was just a success that I talked about over and over and over again. You know how you can use Allbound and how you can use the tools at your disposal to influence the influencer.
Dave Thomson: Yeah, I have a feeling that conversation went when a little bit better than the last story you told.
Jay McBain: That was a better one.I still wasn’t offered the direct position, but thank goodness I stuck to channel for twenty-six years.
Dave Thomson: That’s great. So for those that are aspiring to join the likes of channel leadership, what is one book that you highly recommend that they read?
Jay McBain: Yeah, I’ve got a whole stack full of channel related books. I’ve got about one hundred and fifty channel books that have been written, but the book that started it all for me. Back to Malcolm Gladwell was the Tipping Point. When I read through his vision Chapter two, I think of Paul Revere and the law of a few. I mean, I was reading about our channel, even though he wasn’t thinking about the channel in terms of the way he thought about things as they go viral, I think about how vendors go viral in the channel. I think about how communities work. I think about how relationships work, how to manage things at scale. But that law of a few is something that I’ve reread that chapter probably one hundred times in terms of this idea of simplifying things that are highly complex and understanding is always an 80 20 rule. And there’s a way to measure and focus and take action on the 20 that has the biggest result. And so that’s probably the book that has been most influential to me.
Dave Thomson: Yeah, that’s a that’s a good one. Reminds me, I haven’t read that book in about a decade. That’s probably a good one to join the 2021 list for me at least. So the final question of the four or five years from now, what will be the major changes in the channel that people should think about right now?
Jay McBain: Yeah, so there’s a number of them. Obviously, the new buyer by this time five years from now will be the majority will be millennials. And for all the generation Z, they’re getting their first job today out of college will now be five years into their career and part of the decision committees. So you’re selling to the channel through, to, and with channels to your customer is going to be highly demographically different. So you need to know part of that customer obsession is to understand the different psychology, the behaviors, the changes to the journey and what you’re doing channel-wise and company-wise to to to address that. Second is the explosion of ecosystems. I think seventy six percent of companies today are starting the journey. And by five years, the winners and losers are going to start to come out publicly in terms of what their results have been and who’s really driving, who are these major galaxies that are driving a lot of this action will be number two. We’re watching the growth of marketplaces. They grew more e-commerce marketplaces grew more in three months inside covid than the last ten years combined. One-third of the US economy is now running e-commerce. And guess what? The future buyer looks a lot like a consumer. So there’s a hockey stick right behind that one, which says that most technology companies will also have an indirect route to market, which is marketplaces. Winning on twenty winning leading marketplaces out there will become part of the job description of the head of channels and how you work in these communities and these ecosystems. And the money might not drive through your reseller, but the money drugs through a marketplace. But there’s still a whole set of partners that need to be served through that program and the opportunity for the channel increases in a marketplace just transfer money change, so five years from now, we’re looking at a different world, but an increased importance for the channel and I think an elevated role for the head of channel who at that time will be called the head of ecosystem and report directly to the CEO.
Dave Thomson: It’s interesting, I think we got another entire podcast that we could do on selling to Gen Z there. Very, very interesting, All right. Well, certainly. Thank you, Jay. Thank you, Daniel. Again, Daniel Graff-Radford, CEO of Allbound and Jay McBain Principal Analyst of Channels, Partnerships and Ecosystems, just mentioned over at Forrester. Thank you, everyone, for listening and joining us here at the Partner Channel Podcast. And if you like what you heard, please subscribe to our podcast episodes wherever you listen to our podcast. And if you want to learn more about Allbound, please visit us at allbound.com. Thanks again. Appreciate it.