How To Partner Successfully7:51 AM EST Fri. Sep. 07, 2012
Solution providers face choosing the "just right" channel program out of thousands that are available. Chet Menzione, vice president of channel sales, Quorum, points out that resellers should do some digging to be sure the vendor will treat the solution provider as a real partner, not just a name on a list. Here are his tips for selecting a channel program that will fit your needs.— Jennifer Bosavage
Only when solution providers are treated as true partners -- not just stepping stones for a means to an end -- can the reseller and vendor build their respective businesses, penetrate new markets and realize real success. But despite the emphasis on the vendors' rigorous channel partner vetting processes and their requirements for partnerships, the decision to partner does not lie solely with the vendor. Ultimately, the solution provider is responsible for selecting a channel program that will achieve the business' goals.
Resellers also must evaluate which vendor's program will be the best fit for their own organization. They, too, have the power to eliminate a vendor from consideration based on anything from program complexity, to low margins, to a bad cultural fit.
With vendor partner programs popping up all the time, solution providers must have criteria in place that guide their channel program selection. The following four elements present just such a guide — or, at least, a solid jumping-off point — for discerning resellers looking to strike successful reseller-vendor partnerships.
[Related: CRN's Partner Program Guide]
1) Make Sure the Discounts Count
A vendor that offers a discounted price for registered sales opportunities can lure a reseller to its partner program, but resellers shouldn't be tempted too easily. If there is not enough of a delta between standard and registered pricing, the reseller will have a harder time winning business over a competing reseller. Partner programs that offer a significant delta for registered sales opportunities protect resellers from losing out on an opportunity to another reseller over cost.
2) Stand Out in a (Small) Crowd
Larger vendors tend to saturate their geographical markets by signing up resellers en masse, expecting this to bring in more leads. The backlash, though, is certainly felt by resellers that, as a result, struggle to differentiate themselves in a sea of countless others. In contrast, a vendor that takes care to sign up no more than two or three solution providers in each market has empowered the reseller to be successful. That minimized channel conflict is one of the benefits of partnering with a smaller vendor.
NEXT: Three more tips for selecting a partner program.
3) Use Your Relationships for Revenue
While initial sales comprise the lion's share of revenue for a solution provider, post-sale training and support account for a tidy sum of ongoing cash as well. However, many vendors don't permit resellers to derive any post-sale revenue of this type, opting instead to capture 100 percent for themselves. Faced with that scenario, resellers have no incentive to maintain the all-important customer relationship.
Engaging in a channel program that permits the solution provider to participate in training and support revenue brings about a win-win-win for all parties involved: The customer is satisfied that its needs are met by a trustworthy business comrade; the reseller earns extra money from post-sale activity; and the vendor can now use the partner's relationship as a springboard to upsell or cross-sell.
4) Insist on Rooting MDFs in Teamwork
Vendors may provide marketing development funds (MDFs) in different ways. More established vendors that have a lot of run rate with their partners may base MDFs on a percentage of the reseller's sales of their product. For example, Large Company X might offer 3 percent of a reseller's annual 2011 sales toward marketing development for 2012.
An alternate approach — and frankly, more advantageous for the vendor and the solution provider in the long run — is for the vendor to fund marketing activities and work directly with the reseller to grow business for both organizations. In this case, MDFs are based on potential opportunities, as opposed to what a reseller has sold in the past for the vendor. Such an approach is especially advantageous for smaller resellers that might not have an established relationship with a large vendor. It also gives the vendor the power to control its own marketing message, with can also help resellers differentiate themselves from their competitors.
While those four elements will help ensure a mutually beneficial, long-lasting partnership, other key qualities in a channel program must not be overlooked. They include partner accelerator and channel incentive programs, good sales tools and a network to share best practices, and involvement in long-term strategy planning.
The concept of the total partner experience (TPE) is another trend among leading organizations to ensure successful channel partnerships (http://www.siriusdecisions.com/blog/for-channel-success-focus-on-total-partner-experience/). TPE refers to a vendor's commitment to review its channel program from its solution providers' perspective to ensure a consistently delivered best-in-class channel experience. Not surprisingly, that also contributes to overall channel success.
Essentially, the solution provider should feel like an extension of the vendor's sales team. After all, both parties' goals to succeed in building a business are closely linked, and at least partially depend on one another for any measure of success.