Show Synopsis

Daniel talks with Marcus Cauchi, CEO of Last Laughs LTD, about the crucial mistakes channel managers make when training channel partners. They discuss a day in the life of a channel account manager and why it is the toughest sales job. Marcus explains why your last trip to McDonald’s is a metaphor for training your channel partners. 

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The Script

Daniel:  Welcome to The Partner Channel Podcast, the voice of the partner channel community. In this episode, I Daniel, Graff-Radford, sit down with Marcus Cauchi, the CEO of Laughs Last Ltd. Today, we’ll be discussing the myths and mistakes of training channel partners. Welcome, Marcus. Thank you for being on our show.

Marcus: My pleasure. Thank you for having me Daniel.

Daniel: Let’s start off by telling everyone about your background and how you’ve got to where you are.

Marcus: Thirty-five years in sales, started out effectively selling media and advertising quickly moved into recruitment. Did that for 10 years. Sold software and professional services set up a telemarketing company. On my first day with my first client came across Sandler and realized that’s what I wanted to do. And as soon as the possibility of buying a franchise opened up in the UK, I did. I was the first franchisee in the UK, spent the last 17 years doing that, worked across five hundred different segments of the market helped my clients generate six and half billion pounds worth of additional sales, wrote the book Making Channel Sales Work. And a week from today, I start my new business, which is Laughs Last, and there I’m focusing on helping founders of tech scale ups in the 10 to 15 million dollar mark feed two hundred percent compound growth year on year and do so without resorting to greedy investors. The objective is to help them grow through the channel.

Daniel: I think that’s fantastic and for our listeners, I highly recommend Marcus’s book, I think it was one of my first days on the job at Allbound that I connected with you and you kindly referred me to your book. And I’ve shared it with multiple employees here at Allbound it’s not only a great primer for learning about the channel, but it is one of those things that if you’ve been doing channel for 20 years like me, you’ll still learn something new. Also, love that you have this very clear focus on high growth and having it come through the channel. So I think that our listeners can definitely learn a lot from you. And, you know, when we think about these size companies and as they move towards the channel and they’re thinking about hiring channel managers and thinking about what the definition of success is for that role, and you are in a perfect position to talk about what is sufficient training. Can you tell us a little bit about setting up goals, thinking about training for building a channel team for the companies you’re looking to work with?

Marcus: Absolutely. Well, the first thing you need to understand is a channel manager is closer in profile to a general manager than they are to a sales manager. And a channel chief is closer to a CEO and they are to a VP of Sales.

So if you look at the competencies that are required for a channel manager, they need to be very adaptable. They need to be able to get ahead of conflict and deal with it. And they have to have good analysis and decision-making skills. They need to be really effective coaches. The best channel managers I know spend 50 to 70 percent of their time in the businesses helping them to sell more. And most of that time is spent either coaching or training. They’ve got to be massively collaborative. And that’s a subject I want to talk about a lot in today’s podcast. They’ve got to be really effective at co-creating goals with the partners and the individual salespeople within the partners, because what you need to understand is that your partners are in business for their reasons, not your reasons. And what we’re doing in the companies that I’m working with is looking at the recruitment process, because that’s where all the problems start. 

If you’ve hired the wrong people and you haven’t hired them to fit with your values and your mission, and you’re not focused on creating lifetime customers, if you’re not focused on prospecting for five years down the road and you’re just focusing on the transaction piece today, then you miss out a lot and what you project out, you get reflected back.

And customers, partners know when a vendor is self-serving. Channel managers also have to be amazing planners. They are conductors of an orchestra. They shouldn’t be going around trying to play all 40 instruments and they’ve got to make sure that all those instruments are rehearsed. The timing is right, they’re synchronized and they’re doing an excellent job together. And that’s really the key. I think the future of success in business is going to be determined by those people who can collaborate the best. And that means collaborating with your own people internally. 

Collaborating with your competition. Because in tech, you’re just one moving part, and if you’re not able to collaborate and see where you fit in a competitive landscape within the customer’s environment and their stack you’re pretty much just a bit player. You need to be able to collaborate with the partners and you have to be able to collaborate with the customer. And if you’re not doing that and working in concert and getting the customer to step out of the goal mouth and it’s all of you kicking into an open goal against their problems, then you’re going to end up struggling really badly and you’ll only pick up crumbs.

Daniel: I think, Marcus, if we have some channel managers listening to this and they’re thinking, ‘oh, my gosh, I’m not spending 50 to 70 percent of my time working with accounts, I don’t even know if they want to spend this sort of time with me’. What sort of coaching would you try to provide them of ways to maybe better embed themselves with their partners, especially.  We’re in the thick of covid here. And showing up and bringing someone to drinks or a dinner is not really possible. What can people do to add value and be more deeply embedded in their partner accounts to help drive things that matter, as you said, for the partners not themselves?

Marcus: Ok, it’s a great question, but I think it’s the second question in the series that needs to be asked. What you need to do is when you’re establishing your partnership, is establish the ground rules for engagement. And this is where so many vendors go wrong, because what they do is they go out and they recruit a land army and they think more is better. Please write this down more is not better. Better is better. And if you’re going to recruit partners, make sure you’re recruiting Special Forces partners who work with front line. By all means, if you’re going for the volume play, go through a distributor, have them deal with the volume or automate. But what you need to do is work very closely with a small group of highly trained Special Forces partners. So in terms of what we should be doing is teaching them how to sell. 

Channel is the single hardest, toughest sales job there is. Jay McBain produced a fabulous infographic of the different role functions of a channel manager. Now there are 90 different hats on that and I can add another 30 or 40. And so you are dealing with a really complex environment where in the morning you might be doing some marketing metric analysis. By mid-morning, you’re trying to work out where you’re going to spend your MDF budget and organize some SPIFFS.. Then you’re having to nurture some relationships with partners and then you’re trying to import a new partner. Meanwhile, you’re having to play referee to other people’s children where there’s conflict. Then you’re having to prospect. And this is before lunchtime. So what it requires is some savvy, it requires real skill, thick skin and a generals mindset.

This is not someone who goes over the top in the Battle of the Somme and gets shot at. This is someone who is a conductor of an orchestra and somebody who is making sure the right people are having the right conversations at the right time in the right way, and making sure that all of those moving parts are moving together in concert

Daniel: I think that you’re painting a much clearer picture of the level of effort, the massive Integration that needs to happen for this channel account manager, so if someone Is a channel chief and they’re looking at their team and they want to have more orchestra conductors, as you’re describing here, what are some of your thoughts on things they need to think about for recruitment? Maybe some of the myths that that need to be dispelled and some of the things that they really should focus on in order to get better orchestra conductors into their channel program.

Marcus: Ok? I think what they need people who think and plan strategically, I believe that what they need are people who are collaborative. They’re not individual producers who go off on their the lone wolf. They need to derive immense satisfaction from seeing their partners succeed. They need to be highly organized. They need to be calendar blocking and they need to be saying no to anything that is a disruption or a distraction from them being able to do their job. They need to think as the customer, which means that they need to help the partner understand the environment in which the shared collective experience of the buyer happens, the risks that are going to be mitigated. So these are people who need to have good market insights and intimacy. They need to be people who are fantastic at listening. They’re great in terms of their EQ. They are organized. So excuse me. So they manage the behavior and the time available exceptionally well. They are really good at helping partners  get the coverage they need on average, even for a 200 person company, you’re talking three to four influencers and an enterprise deal. You’re talking probably six, seven minimum. And you know where it’s a complex strategic investment there could be multiple layers. So the kind of people that I would want are sales people who have historically been really good at developing good account penetration within their accounts, not necessarily the top producers, but the ones who sold the most of their portfolios across the account, because that’s what the partners want to do.

And they need to be people who enjoy coaching. And if they don’t yet enjoy it, they need to learn how to. So you need to train them to coach. But again, you see so few people doing real coaching. I think one of the best channel managers I’ve ever met is a guy called Kieran Krohn, and he’s won the best channel manager of the year of the World Award back in 2018 with HubSpot and you can see why he won it. He spent 70 percent of his time working at the executive and sales level within the organizations that he has partnered with. He helps them develop their plans. He helps them develop their pipeline. He helps the midwives deals with them. Doesn’t work with a lot of partners, works with a very small number, and he makes them immensely successful. And Zach Selch, who has sold in one hundred and thirty countries, established over a thousand different partnerships and distribution agreements worldwide. And there’s a good Jewish boy from Chicago who for the last 30 years has been selling into Saudi Arabia. And he’s still working with the partners that he worked with thirty, thirty-five years ago. And his motto is, “the only way out of my network is in a box”. Now he looks after his partners. He looks after his competition. He looks after his clients. And he’s constantly training and developing. He never stiffs them. He’s completely transparent. And these are rare qualities. And I look at Silke Ahrens over at Thycotic, and she is somebody who spends and immeasurable amount of time coaching and developing her people and training them how to coach and develop their partners.

And she’s strategic. And then in the next breath, she’s tactical, she’s operational and she’s financial and commercial. And this is what a real channel chief needs to be. It’s such an involved job. And I think in the future, some of the best CEOs will come out of the channel because they get to see the whole picture.

Daniel: I think you’re saying a few different things that I want to dig into here. So on the first part, you gave three excellent examples of top performers in the channel. And one of the things that we hear over and over again is for channel account managers to make sure to follow up with your partners and make sure to thank them for their leads and that sort of thing. And those are all sort of minimal, viable efforts that don’t necessarily lead to these deep relationships. The examples that you’re giving are best in class. And I think for those listeners that want to be channel account managers, modeling yourself after, you know, someone who won’t let people leave their network except in a box or are able to switch between strategic and tactical and get super involved in their partner’s business, I think these are really good things that we need more examples of for people to look up to for people to model their behavior on. Don’t go for the minimum viable relationship because you’ll churn in and you’ll churn out. And if you want to have, as Marcus put it here, you know, the Special Forces quality of partner, you need to make them so through your interactions. And I think that’s really big.

The second thing I want to tie into is what you were saying related to CEOs coming out of the channel. As we have started to see and as VCs are starting to recognize and private equity firms are starting to recognize, there is a massive opportunity for the network effect to grow companies through channel, which is why Marcus it looks like you’ve started your new firm because you see that as a true change happening through building ecosystems, through building these network effects. And it’s absolutely true when we see people that are customers of Allbound, create a well-run, orchestrated, you know, ecosystem they many times get promoted into massive roles that have tremendous influence and control over the organization. And so moving from being a channel chief into senior leadership roles is absolutely a path we’re seeing over and over again for a successful channel. We’re actually leading a webinar series right now for How to Become a Channel Chief where we are interviewing channel leaders on how they got there because there really is in a published path there. But, Marcus, I think these points are two that I would love our listeners to really dig into. Is there something else you looks like you wanted to add to?

Marcus: And this is the other thing. And most managers see recruitment as an unwelcome interruption and a chore for their daily work. Actually it’s your number one job, if you hire the best people and hire the best partners, most of your management problems go out the window. Then you can focus on the stuff that actually matters. Recruitment should be a daily activity. And as you’re starting to expand, you should be building a bench of prospective partners and go through the due diligence and the courtship and identify the one or two that you’re going to work within a territory. Don’t go off half-cocked. And I don’t go to exhibitions and try and sign up as many as possible. Not everyone qualifies to be your partner.But you look at the best of the best and they are just leagues ahead of everybody else because they are partner-centric. They are focused on making their partners successful. And they know the byproduct of that is they are successful in turn. They’re not selfish. They’re all about service. Everything that they do puts this partner at the heart of what they do with the customer even more central. And this is where most people go wrong because they’re so fixated on their transactions, on hitting their personal quota on quarterly earnings. That’s where it goes wrong. You’ve got to look at the right end of the problem. And it’s the customer and the partners that you have to put first.

Daniel: So, you know, Marcus, we’ve covered things that range from some of these metrics of who to put first and recruitment and the future of the channel and some top performers. And as some of our listeners are trying to put this together and think about, you know, what they’ve heard today, what are one or two things that you want them to walk away with and kind of deeply think about after this, this conversation.

Marcus: Think as the customer, not about them. Think as the partner, not about them. So speak to them, find out what it is they’re trying to achieve or they get frustrated by why they are doing what they’re doing and try to understand the bigger picture. One of the things that really has struck me over the last couple of years is the blinkered perspective that most vendors have. They see the customer’s journey as the beginning when they touch them first and when they make the sale.

And I remember listening to Colin Shaw’s podcast and he describes the customer journey on a trip to McDonald’s. The customer journey begins when one of your kids screams, “I’m hungry”. And so you say, “OK, where do you want to go”? And then you will pile into the car and you drive off to McDonald’s and you fight your way through traffic with them fighting in the back saying, “are we there yet?I’m hungry. When will we get there”? You eventually get to the drive-in and there’s five or six cars in front of you and you’re listening to them fight in the back and you’re trying to take their order and you get to the squawk box and then one of them changes their mind and the squawk box sound quality is poor. So you have to give the order a couple of times. Then they read it back to you and then one of them changes their mind again. Meanwhile, the eventually got the order in. Then you get to the payment window. You tapped your card and you pay. Then you go to the pickup window and there’s that nagging doubt in your head wondering, will they have got the order correct? If you have a vegetarian child, which I do often, that means a five to 10 minute wait in the car park. And when the food comes, you’re not entirely sure whether they’ve got everything in it.

But you worried about all the pressure from all those cars behind me, so do you check it or do you now? You drive off and they want their milkshake. So they’re throwing muck around in the back. And you’re worried about the state of your upholstery. You eventually get home, they scoff the food and then they’ve got indigestion, maybe a little bit of throwing up. And then you’ve got to get rid of the packaging and then you got to feel the guilt because you’ve broken your diet. Now, that’s the customer journey from a McDonald’s perspective. It’s when they turn up to the squawk box pay the money and pick up the food. And I think as a channel, you need to understand those mechanics, you need to understand the motion that an organization goes through to reach conclusions about what they’re going to purchase, you need to understand how purchasing and procurement are targeted, what their priorities are, what the CFO is telling them they need to deliver. You need to understand how the lines of business all operate. You need to understand where your partner’s businesses are. Now that takes real skill. It takes time for reflection. So focus on fewer customers, focus on fewer opportunities, but do a much better job. Do research, research their landscape, their competition.

Daniel: I think, Marcus, this is really good. I love the McDonald’s analogy of the perspective of McDonald’s versus the perspective of the buyer and then tying that into, you know, if you are running a partner program, there’s the perspective of your customer, the perspective of your partner, and then there’s the perspective of your own company and laying this out into a pre-sales current sales and post sales story and making sure that you’re spending more time in their mindset than your own. I think that’s a challenging job. Right? We all need to do a great job of that. And I think that’s really helpful. And if we want to wrap up here with the final four questions, the first one is, if you have a superpower, what would it be and why?

Marcus: That’s a great question. The superpower would be really listening, I’d never listen to my way out of the sale. I’ve talked my way out of plenty and I spoke to Dr. Laura Janusik and she defined listening as the transfer of meaning. And I think that’s really key. You have to have good EQ and great listening skills. And that’s another thing I would recruit for.

Daniel: That’s really good. I’ve never listened my way out of a sale. I’ve definitely talked my way out of one. I think that is great coaching. And, you know, you’ve been doing training and advising companies for a long time. Can you give us one mistake and one success either you or someone that you’ve worked with have had and the channel that we could learn from?

Marcus: I mean, the most common mistakes are not training your partners as if they are your own because some idgit in finance says, why should we train them by just going to train our competitors? That’s my shortsighted, myopic, stupid thing I ever hear. And if you’re not training them as if they are your own, you deserve to get the terrible results that you get and the inconsistency and waste, I think. And the smart people are not only training them, but they’re also spending marketing money to help them be successful rather than sell their own product. So Glenn Robertson talks about business development funds from marketing development funds. I think you should be spending your marketing budget, helping your Special Forces partners be successful across their business. And that will be reciprocated with loyalty. And in terms of the best things and I look at someone like Silke Ahrens who is breathtaking and she is a future global megastar. She’s doing amazing work. But what she does is she recruits slowly and she onboards beautifully and she makes sure everyone in her team has one hundred and twenty day onboarding plan with new partners. And in that onboarding plan, you know what you need to by when you need to know, how it will be measured and to what standard, where you can find the information that you need, and what the accountability process will look like. So the red flags and that onboarding process is really critical because that’s what you set partner up to succeed or fail.

Daniel:  I think that that’s really good examples for both the mistake and success and, you know, there’s your book that we’ve already recommended of Making Channel Sales Work. We strongly recommend it. Are there any other business books that you recommend for people in the industry?

Marcus: Yeah. Tom Williams, Customer Centered Selling, Just Listen by Mark Goulston. Everyone, if you’re a human being and you still have a pulse, that’s a must read. I like Hans Peter Bech’s book Going Global on a Shoestring. In fact, all of his books are pretty good. 5,4600 Miles from Silicon Valley that’s the story of I can’t remember the name of the company it’s slipped my mind. But this is a Danish company that grew to a billion dollars. And in spite of the fact they were a tiny little backstreet business and they just rocketed because they used partners and they were really smart. I would also look at there’s a couple of books that I like Antonio Garrido, two books, The Twenty First Century Ride Along and Asking Questions. Whether you’re direct sales or your channel, those two skills are critical. Going on ride-alongs is not something that’s optional. You need to get out in the field. You got to speak to the customers and you got to see how your salespeople are selling. And there’s nothing more useful after listening than questioning. And this is the takeaway. Your average salesperson asks questions, gather information slightly better. Also awful people ask questions to gain understanding. The genuinely megastar salespeople ask questions that deliver insight. And when you ask a question that delivers insight, your prospect takes a little breath and they say, “that’s a great question”. And then they have to pause because they’ve never seen the world through that lens before. And that’s the difference.

Daniel: And our final question now, this is more of a crystal ball question. Five years from now, what do you think the major changes are that are happening right now in the channel that will affect us five years from now?

Marcus: Oh, I like this question a lot! How long have we got? I genuinely believe that the day of the road warrior salesperson is over Covid has put a final nail in the coffin of that service for the next two years. No one in their right mind is going to be stepping on a plane with the risk of two weeks quarantine either end and possibly picking up this nasty bug. So you’re going to have to work through partners. And I think what’s going to happen is there’s going to be more partner with partner selling. I’m really looking forward to that because partners will be experts in a particular area of the stack and they’ll need to work with other partners, and I think that’s going to be a really interesting development so that the channel partner, partner manager, I think is going to be something that’s going to evolve.

And the alignment and the cohesion between marketing and sales in the channel isn’t operating correctly. You’ve got to rethink and the question I would leave all of you is this. If you’re if you’re a chief, you know, you’re a founder, a CEO, a sales or channel chief, the question I challenge you to ask yourself is this. If it was the first of January 2021 and I was redesigning my entire sales, marketing, and channel operation from scratch with the same budget I have available to me to pay for salaries, for marketing, for technology. Who would still be on my payroll? Would I still have as partners? Which technologies would I keep? And what would I replace them with? And what should that look like now I dare you and I’d love you to get in touch if you want help with that, if you just want someone to shout and say, “why did you ask me that question? It’s making me sick”, then by all means, get in touch. I’d love to have that conversation.

Daniel: And as we’re wrapping up 2020 and rolling into 2021 and a lot of people we’re talking to are doing end of year planning, and that’s a great question for people to sort of rethink things. And so, Marcus, you know, I want to thank you for joining us from Laughs Last. And I also want to thank our listeners, of course, for joining us here at the Partner Channel Podcast. If you like what you’ve heard, subscribe to our podcast episodes, wherever you like to listen to podcast. If you want to learn more about all of them, please visit our website, which is in the description below.