Some Best Practice Predictions and Channel Sales Considerations for 2009

As 2009 gets under way, and a lot of outside market conditions are influencing our Partners and thereby our indirect sales. Therefore  it is time to ponder the key IT trends and IT industry developments likely to impact our Partner Management. Vendors and channel partners alike will find these observations valuable as they update their respective strategies. Highlights of these analysis are as follows:

 

1. Risking collision with smaller partners, suppliers will continue to increase their focus on SMBs and to encourage their enterprise partners to target the midmarket.

 

2. Partner networks will continue to flourish with or without the inclusion of suppliers and distributors.

 

3. IT vendors and their partners will integrate social networks in their partner relationship management (PRM) and customer relationship management (CRM) portals to gain competitive edge.

 

4. Suppliers and distributors will continue to drive more leasing and financing targeted toward reseller partners as a natural evolution to managed services.

 

5. Infrastructure suppliers will continue to bet on two very different horses ISVs and reselling partners to drive revenue growth.

 

6. Telecom service providers will continue to challenge their IT counterparts for higher-margin solutions and services business in all customer segments.

 

7. At least one supplier will emerge as a competitor to distributors and the direct response channel (DRC) in the United States —Is Dell in the channel as a competitor or just another sourcing option?

 

8. Certain channel partner types will have to evolve their business models much faster than others as the market shifts away from their traditional product and service offerings.

 

9. Managed services will become a key activity for channel partners seeking to deepen their relationship with customers.

 

10. As leading hardware vendors look increasingly to software for growth, their partners will invest more in software and get closer to applications in the dominant environments (networking).

 

As mentioned are these some observations that might be valuable for one or the other, in order to update or adjust your respective strategies.

 

If anybody is interested in more details or information about the above findings, please feel free to contact me.

 

Regards

 

Mark von Rosing

Recession is influencing Channel Sales and our Channel Management

The news media continues to discuss the impending recession with a financial market crisis, massive sub-prime write offs high energy costs ( oil has crossed the $100 per barrel mark) and a slowing in consumer confidence. With all this dark financial news what should solution providers be doing to ensure they have developed sound strategies for recession proofing their businesses. Having meet so many Executives on my channel courses and trainings I have seen some of them that are very good at Channel Strategies, while others really can’t, and I have to be honest that I have wondered how it is that one can do it, while the other can’t ..…and another thing that interests me is how they do can do their channel strategies consistently good, especially when recession is influencing the channel? So what I’m trying to do in this forum article/discussion is to stimulate your thinking about how to align your different business and Channel strategies especially when recession is influencing the channel.

 

Solution providers need to be closely examining their existing business models, how they "do" business, and utilize their resources. I believe this introspection or "heads up" time will empower those that take the time to carefully evaluate the market dynamics and their models, in the long run . The result will be a stronger channel that is better positioned for even stronger growth after these turbulent economic times recede. Partners need to be asking themselves questions such as;

 

• Where/Who are we primarily deriving revenue from?

 

• Are we demonstrating true value to our customers in our selling proposition?

 

• What are we selling? What is the mix of products and services? Are we selling them more services and the right services? Hint: the answer should be yes and yes!

 

• Are we selling products or solutions? Hint: the answer should be solutions

 

• Are we selling managed services? Hint: the answer should be yes!

 

• Are we offering our customers leasing and financing? Hint: the answer should be Yes

 

• Do we have the 'right' vendor relationships? Are they healthy and poised to weather a challenging economic storm?

 

These are all questions that partners should have been asking all along but unfortunately many have not had to, which has caused additional strain. Meeting monthly payroll, holding inventory, utilizing highly paid resources effectively, providing training and education for staff and keeping day to day operations running smoothly are just a few of the daily challenges for resellers. Layer on top of that the strains of lengthening sales cycles, tighter budgets and being competitive in the marketplace, solution providers must look for consistencies in their business. Relying on a traditional resale and betting on closing deals within the pipeline as the only measure for forecasting business during a recession can be, and one could argue has long been a recipe for disaster. IDC believes the following opportunities for solution providers can provide a level of predictability that partners can reliably build a business upon to weather uncertain economic times.

 

Managed Services

With growing reliance on the network as a competitive asset and its increasing complexity, partners are having success in selling and providing managed services to their end customers. These offers are not only derived from their own IP, but smaller partners are also leveraging the reselling of third party offers ( such as Ingram Micro's Seismic for SMB partners or Cisco's Powered MSP program for enterprise customers). For channel partners who embrace selling managed services ( I say selling here, because not every partner can build and maintain their own NOC but can provide managed services with third party offers) they will be rewarded with a predictable recurring revenue stream applied to their balance sheets. Aside, from the fixed monthly revenues, offering managed services to end customers also provides partners with a tighter long term customer relationship. They now own the network, and can focus their customers on Recession Proofing the Channel more high value strategic initiatives that are more lucrative. This may be an effective way for partners that are struggling to migrate away from the resale business, to start to change their model as it still allows for the resale of some of the premise equipment and does not require a total re-do of the model. Rather this is a smoother transition. Additionally, customers are feeling the crunch as well and this type of monthly billing may be more palatable to many who are in similar financial situations.

 

Leasing and Financing

Partners who have expanded their relationships with their customers to include financing and leasing options have done well to create a tighter bond and change their relationships with their customers. Partners move from a cost based conversation to a higher level strategic conversation that does not involve price. Partners who are now having financing discussions or are actively offering leasing and financing options for customers also enjoy the fixed billing that accompanies that offer.

 

Vendor Relationships

Effectively managing vendor relationships, can be one of the most challenging aspects of a solution providers business. Partners must ensure that not only are they working with suppliers that offer sound technologies that open opportunities, but are also cost effective and profitable to implement and manage. Additionally, partner programs that the suppliers deliver must be compelling, reliable and consistent. A challenge for partners are suppliers that consistently revamp their programs, policies, requirements and compensation that makes it costly for partners to do business with them. This has been a long standing issue for partners but one that really is brought to the forefront in this challenging times. The channel has weathered rocky financial times in the past emerging more innovative and healthier. But one point that always remains a constant with the channel is the value of close relationships that the channel delivers to its end customers. Vendors have also seen the value of these partnerships and have invested in nurturing them therefore, these suppliers would be wise to pay attention to the financial health of their partners and work with them to help them ride through this difficult time.

 

The subject of how "recession is influencing Channel Sales and our Channel Management" is wide and a lot of different issues and challenges can be discussed in connection with this subject ………and if you want to discuss how you need to react to this new changes, please feel free to contact me mvr@rosenteam.com

 

Regards your Channel Sales Moderator – Mark

Channel Sales Performance with the Partner Manager Social Competence - Character Model

Channel Sales Performance with the Partner Manager Social Competence - Character Model
The Partner Manager Social Competence - Character Model is a prescriptive Partner Manager theory developed in 2006 by Cay Clemmensen and myself in a Partner Manager Performance Coaching engagement we had in our company Rosen Team for a large Global Company.

Let’s face it........your Channel Sales is dependent upon your Partner Manager and his or hers social competence and character!

The social competence and character necessary for Partner Managers could actually be visualized as a scale, where integrity is the strong and solid base, and respect and responsibility are balanced on either side. Partner Managers with integrity are honest, trustworthy and authentic. They are also respectful of others and have a strong sense of personal responsibility. Relationship and respect is developed by the component qualities of Empathy, Emotional Mastery, Lack of Blame and Humility. Responsibility is developed by the component qualities of Accountability, Courage, Self Confidence and Focus on the whole (as a Partner Manager with the abilities).

The 10 contents of the Partner Manager Social Competence - Character Model:
1. Social Competence skill - Respect
2. Social Competence skill - Empathy
3. Lack of Blame
4. Emotional Intelligence skill - Humility
5. Emotional Intelligence skill - Emotional Mastery
6. Emotional Intelligence skill - Responsibility
7. Emotional Intelligence skill - Accountability
8. Emotional Intelligence skill - Self-Confidence
9. Emotional Intelligence skill - Courage
10. Social Competence skill - Focus on the whole

1. Social Competence skill - Respect
Partner Managers who demonstrate Respect show unconditional high regard for others, acknowledging their value as human beings, regardless of their behavior (and isn't partner sales all about the value that the partner perceives to receive from you or the ecosystem ). The respect comes through in all situations, even during times of conflict or criticism. Demonstrating respect for others requires developing and refining core personal qualities.

The sales responsible, that demonstrates Respect show’s unconditional high regard for others, acknowledging their value as human beings, regardless of their behavior (and isn't sales all about the value that the other person perceives to receive). The respect comes through in all situations, even during times of conflict or criticism. Demonstrating respect for others requires developing and refining the following core personal qualities (not faking it).


2. Social Competence skill - Empathy
Treating everyone in the organization with empathy helps leaders earn trust. Leaders who are empathetic create strong bonds and are seen as less political. A Partner Manager who demonstrates the core quality of empathy:
• Can understand others’ points of view, including the views of those who are different
• Shows genuine concern for others
• Listens with understanding
• Is respectful even when he or she has nothing to gain from the relationship

3. Lack of Blame
Partner Managers who don't blame others are not defensive. They are able to reflect honestly on their own behavior and are willing to admit mistakes. When things go wrong, they don't spend time assigning blame; they spend time fixing the problem. A Partner Manager who demonstrates the core quality of lack of blame:
• Admits fault when appropriate
• Does not look for a scapegoat in a crisis
• Spends time fixing problems, not assigning them

4. Emotional Intelligence skill - Humility
Humility is a lack of pomposity and arrogance. It is the recognition that all Partner Managers are fallible, that we are all combinations of strengths and weaknesses. Partner Managers who demonstrate humility, as someone has said, "don't think less of themselves; they just think more of others." Arrogance derails more leaders than any other factor. A Partner Manager with the core quality of humility:

• Listens to others with an open mind
  
• Doesn't brag or name drop
  
• Clearly sees and admits their own limitations and failings
  
• Is not afraid to be vulnerable
  

5. Emotional Intelligence skill - Emotional Mastery
Partner Managers who have developed emotional mastery recognize that, as Epictetus said 2000 years ago, "It's not the facts and events that upset man, but the view he takes of them." For those in positions of formal power, the most important aspect of emotional mastery may be controlling anger. Outbursts of anger have no spot in the workplace, and can quickly destroy a sense of organizational equity and partnership. A Partner Manager with the core quality of emotional mastery:
• Says what he or she thinks, but never berates others
• Stays calm even in crisis situations
• Doesn't let anxiety interfere with public speaking or with other things that need to be done
• Reflects before reacting and is able to consciously choose an appropriate response

6. Emotional Intelligence skill - Responsibility
Responsibility is the acceptance of full responsibility for personal success and for the success of the project, team and organization. Becoming responsible requires developing and refining the core qualities.

7. Emotional Intelligence skill - Responsibility
Partner Managers who are truly accountable expand their view of organizational responsibility. At all levels, accountable Partner Managers do what they can to get done what needs to get done, no matter where in the organization they have to go. They NEVER say, "It's not my job." They also hold themselves accountable for making relationships work - they don't say, "Well, I'll go halfway if they will." They take 100% responsibility for making any relationship work. A Partner Manager with the core quality of accountability:
• Takes the initiative to get things done
• Is not afraid to hold others accountable
• Is willing to cross departmental boundaries to help with a meaningful project
• Takes personal responsibility for organizational success

8. Emotional Intelligence skill - Self-Confidence
Partner Managers who are self-confident feel that they are the equal of others, even when those others are in positions of much greater formal power. Partner Managers who are self-confident also recognize the value of building the self-confidence of others and won't be threatened by doing so. Self-confidence in everyone builds a sense of partnership and helps the organization get maximum effort and ideas from everyone. A Partner Manager with the core quality of self-confidence:
• Has a self assured bearing
• Is flexible and willing to change
• Easily gives others credit
• Isn't afraid to tell the truth

9. Emotional Intelligence skill - Courage
Partner Managers with courage are assertive and willing to take risks. They ask forgiveness rather than permission, and are willing to try even though they might fail. They are willing to risk conflict to have their ideas heard, balancing that with the respect that makes constructive conflict possible. A Partner Manager with the core quality of courage:
• Champions new or unpopular ideas
• Talks to others, not about others, when there is a problem
• Accepts feedback and really hears what others say
• Takes the ball and runs with it, even when there are obstacles

10. Social Competence skill - Focus on the whole
Partner Managers who focus on the whole think in terms of the good for the entire organization, not in terms of what's good for them, their team or their department. They can see interdependencies and can see beyond what is immediately observable. They have an understanding of and enthusiasm for the business and an understanding of their industry. For example, if working on a software project, they consider the implications of the whole project and commit to an outcome that works for the customer rather than focusing on just their piece of the project. A Partner Manager who demonstrates the core quality of focusing on the whole:
• Realizes that they represent their company to customers
• Sees how the work in their area affects the entire project and the entire organization
• Gathers information from all stakeholders when making decisions
• Shares information throughout the company and understands the value of a knowledgeable workforce

I know that when we talk about the social competence and character necessary for Partner Managers to influence the way they manage the Partner Ecosystem, that these are very psychological soft skills we are talking about and as you can read from my different article, do I strongly believe that channel sales excellence is made, not born. That's why I actually wanted to create this Blog and Forum and I'm dedicated to helping you personally grow beyond where you are today. Many Partner Managers know that certain things they should do in a better way, but too often they don't know how - or do get started on the change process. We all work against some barriers that somehow keep us from doing what is best for us - and from realizing our true potential. If you need help in better understanding and exploit your potential in order to turn you into action mode and help you break through self imposed limitations that are holding you back from the power, balance, growth, and success that you strive for. Lets us talk about how I can help you explore how it is possible to build new levels of social competence and character - helping you to remove the mental and emotional obstacles that are limiting your personal and professional growth, power and channel sales performance.

If you are interested in a course that can strengthen this ability this could be an option: http://www.rosenteam.com/sales-performance/emotional-intelligence-in-sales-coaching-program/

http://www.rosenteam.com/sales-performance/partner-and-channel-coaching/

If I can help in any other way, please feel free to contact me via email: mvr@rosenteam.com

Regards your moderator

Mark von Rosing

How to use Emotional Intelligence in one's own Channel Sales Performance

How to use Emotional Intelligence in your channel sales performance development – the challenge for me as a Coach!

Of the many challenges facing me as a channel sales performance trainer and coach, in their efforts to develop highly-skilled and successful channel sales professionals is the discrepancy between what they believe they accomplished during training and the results reported by managers once the person is on the job. What is learned and seemingly perfected during training is often not applied to challenging or difficult customer situations. Despite the efforts of trainers to provide intense "skill and drill" activities, feedback from field management suggests that channel sales personnel "need more training". One could argue that no one ever learned to swim or ride a bicycle by simply reading a book on the subject or having someone tell you all about it. You learn to swim or to ride the bicycle by doing it. First someone must explain what you should do and how you should do it. Then you need more instruction and help as you start to practice it. The more you practice, the better you get. The same type of process is what happens in a training – it makes certain, that you pick up the type of skills and competencies that you need in order to grow, change or even become a peak performer. This leaves however the trainers with the struggling task and question, to identify: "What stops this channel sales person from doing what he or she already seem to know?" many would argue that this "needs more training", however I do not think that to be right……….it is a matter of directing the channel sales person to practice the skills and thereby acquire the wished ability, it is unlikely that more "skill training" will make a difference. Once an individual has acquired the needed knowledge, it is likely the barriers to high performance reside in another aspect of professional development – to develop it, into a competence. That aspect of development involves complementing their psychological, cognitive and verbal ability with expanding the individual's emotional intelligence.

 

LOGIC AND EMOTIONAL CAPABILITY

Practicing psychologists in very diverse fields have found that it's not just a matter of developing "cognitive power and skills" to succeed. Whether one considers the counselor assisting a person experiencing feelings of depression, the sports therapist coaching an athlete to reach peak performance, or the business coach assisting an executive struggling to rebound from a major financial set-back, the evidence is clear--emotions play the major part in human performance that is distinct and separate from the individual's cognitive or physical ability. The research of neuroscientists such as Joseph Le Doux has substantiated the experience of practitioners that the emotional system of the brain acts independent from the neocorter, or logic system. The research indicates that some emotional reactions and emotional memories are formed without any conscious, cognitive participation. An excellent review of the research findings are detailed in Daniel Goleman's books on Emotional Intelligence. Goleman regards the two distinct mental functions as: the logical factual system and the emotional feeling system. He describes how reason originally freed people from the influence of emotion that would sometimes sway their logic in making sound judgments.

 

A new paradigm suggests that a more harmonized head and heart partnership is needed to balance human nature and logic. When combining the experience of psychologists and the research of neuroscientists the answer to the question regarding what limits performance is very clear. What stops people from doing what they already know how to do, is both their failure to recognize the impact that emotions have on their actions and the ability to know how to change it. This is especially true when there is a failure to apply knowledge and even skills under challenging or stress provoking situations. I have over the years realized that this performance problem, actually points out the need for a personal development coach to learn how to assist individuals in developing emotional intelligence. Developing Emotional Intelligence requires a very different learning methodology than is used to train for product or technical knowledge – as it is a personal competence.

 

TRANSFORMING CHANNEL SALES DEVELOPMENT

Given the increased competitive pressures of the global market place and major changes in customer requirements, channel sales professionals have found they must call on different decision-makers and buying groups than they did in the past. Not only that the channel sales has become more complex with more decision makers, influencers and possible blokers, they must be able to communicate business as well as personal value on all levels of the organization. These new realities can result in feelings in some way inadequacy and frustrated.

 

For many individuals this both requires additional channel sales technique training in the fields of "Selling to CxO's and Value Based Selling as well as developing Emotional Intelligence capabilities as these new realities require learning how to manage tension and increase personal comfort in adapting to various challenging situations and people. This adaptive capability cannot be acquired using traditional training methods. It requires that channel sales trainers modify their instructional methodology to include a Discovery Learning Process that assists channel salespeople in:

·         Developing timely awareness of their emotions "in the moment"

·         Managing emotion and using "emotional muscle" to enhance business effectiveness

·         Increasing perceptual sensitivity to detect and respond to subtle customer signals

·         Integrating emotional awareness with authentic behavior

 

This is a LEARNING PROCESS

As previously stated, developing emotional intelligence requires a new approach to learning. The channel sales professional needs to become aware of the impact various interpersonal verbal and non-verbal behavior has on their emotional reactions and how these emotional reactions influence their ability to effectively respond to channel partners. Standard training procedures focused on learning what to say or how to deliver an effective presentation. This type of training is aimed at increasing the channel sales person's interpersonal communication skills. Much of this communication training is based on the assumptions that if a channel sales person utters certain keywords, the customer will almost automatically respond in a positive manner. Strange that anybody today still would believe that…………for that would mean which just need to say something certain, in a certain way and we would succeed every time. Which is simply not true!!!!! We all know that a major problem occurs when the channel sales professional uses their best benefits and value verbiage, and the customer responds in an unpredicted or challenging manner. It is almost like a scene from a play where one actor speaks their lines to another actor who seems to have lost their place and fails to respond with the 'right' scripted words. Responding effectively to these unanticipated situations is impacted by the channel sales person's awareness of their emotions (needs, wants as well as value mindset and expectations) and understanding how these feelings influence their actions.

 

Developing timely awareness of the intrapersonal communication isn't achieved using typical or standard training techniques. It is achieved through a process of recognizing and overcoming emotional barriers that can misdirect intentions. An approach titled Personal Development Learning Process was developed to facilitate examination of internal messages that trigger emotional reactions. The first step in examining one's emotional intelligence is to become more aware of internal communication. We all talk to ourselves, and many times this internal conversation (self-talk) has a negative or limiting impact on our actions. This awareness is especially useful for those who have been taught that emotional reactions must be avoided or somehow concealed. To increase this accessibility, the Discovery Learning Process uses a variety of video vignettes designed to evoke and help the individual examine their intrapersonal communication. Often this intrapersonal communication seems to be traveling over a fine internal telephone line with many resistors. People frequently mention that it may be a day or more after a difficult business call that they become aware of the full range of feelings they had that influenced their actions during the call. By increasing awareness of their intrapersonal communication and identifying how emotional reactions impact behavior; the individual is ready to examine especially challenging or confrontational situations.

 

Using the Personal Development Learning Process, professional coaches use various questions and inquiry techniques to assist individuals in overcoming intensive limiting reactions. Key performance breakthroughs occur when channel sales professionals develop the ability to immediately access their emotional reactions, recognize the impact certain interpersonal allergies have on their behavior, and develop the ability to respond in an authentic manner to the challenging situation. This learning process develops the emotional "muscle" and strengthens interactive competency.

 

INTERPERSONAL ALLERGIES

The secret about Personal Development is to find out where or how you can develop personally A particularly valuable application of the Personal Development Learning Process occurs when individuals learn that they are limited by certain interpersonal allergies. In a manner that is similar to physical allergies, where the individual's sensitivity is extreme; interpersonal allergies occur when a situation triggers a particular anxiety or fear. Albert Ellis, who pioneered investigation into a rational-emotive approach to psychological counseling, discovered that when certain beliefs and fears are carried to extreme an internal dialogue develops which limits the individual's interpersonal behavior. For instance, one of the common interpersonal allergies of channel sales professionals is the belief that they should be accurate and correct in their communication. This is certainly a rational expectation. However, when this realistic expectation becomes an exaggerated irrational expectation, the channel sales person feels they must always be right. The professional who holds this type of irrational belief and fears ever making a mistake will impose limitations on whom they call on and how they interact. By trying to limit the potential of making a mistake, they limit their ability to achieve performance breakthroughs and growth as a professional.

 

CHANNEL SALESFORCE EXCELLENCE

Overcoming the barriers to high performance and the challenges imposed by a rapidly changing market has prompted Chief Learning Officers and business managers to consider alternatives to the "skill and drill" approach. These traditional training techniques are necessary to establish foundational skills, but are insufficient when engaging sophisticated buyers and complex channel sales. High performance can be achieved when a learning process is used to develop the professional's cognitive, behavioral, and emotional abilities. Cultivating the individual's emotional intelligence in harmony with their knowledge and skills enables the professionals to adapt their interactive skills to achieve peak performance despite industry volatility. The main learning points for an individual using Emotional Intelligence in their channel sales performance is how to:

• Effectively deal with difficult situations

• Maintain your self-control even when under pressure

• Understand your emotions and gain more emotional awareness

• Persuade others to support your point of view

• More successfully build relationships with your channel partners

• Use emotional intelligence to strengthen influence, trust, communication, and accountability

• Understand the decision making process.

• Understand emotions and gain more emotional awareness

• Understand different buying reasons and how to address them

• Understand feelings and the reasons behind them

• Identify business as well as personal buying reasons.

• Understand how value impacts the psychological buying reflections.

• Understand the channel partners' value mindset.

• Use emotional intelligence in channel sales in identifying needs & wants of the different decision makers and influencers in the buying process

• Identify the explicit needs of the customer (value expectations).

• Recognize different value expectations at the different levels in the company.

• Develop flexibility in your communication style

• Ask the right questions that help open the sale.

• Include the personal value expectations of your listener into the channel sales messages/communication.

• Engage in appropriate actions, given the emotional content of a situation

 

I know that when we talk about Emotional Intelligence in one's own Channel sales Performance, that these are very psychological soft skills we are talking about and as you can read from my different article, do I strongly believe that channel sales excellence is made, not born. That's why I actually wanted to create this Blog and Forum and I'm dedicated to helping you personally grow beyond where you are today. There are several types of intelligence that human beings are equipped - with some more, with some less. Most people believe that the logical-mathematical type of intelligence (the IQ rating that many people focus on) has the most impact on whether you have success in life. That is absolutely wrong. If you want to do something that can really help you improve the quality of your life (in every way) - there is one thing that comes first: strengthen and cultivate your emotional intelligence as much as you possibly can. Many channel sales manager know that certain things they should do in a better way, but too often they don't know how - or do get started on the change process. We all work against some barriers that somehow keep us from doing what is best for us - and from realizing our true potential. If you need help in better understanding and exploit your potential in order to turn you into action mode and help you break through self imposed limitations that are holding you back from the power, balance, growth, and success that you strive for. Lets us talk about how I can help you explore how it is possible to build new levels of self discipline, strengthen and cultivate your emotional intelligence, overcome indecisiveness and uncertainty, and strengthen your confidence - helping you to remove the mental and emotional obstacles that are limiting your personal and professional growth, power and channel sales performance.

 

Regards your moderator Mark

New Ecosystems evolving: Partner -to- Partner Networks

There are so many changes in the Channel space and the way Partners work together. The trend is Ecosystems…….with that also Pure-Partner Versus

Vendor- Driven Ecosystems . With these new changes does One Plus One Equal Two or Three or even more?

 

P2P networks emerged several years ago in various forms and continue to evolve. Partners are increasingly working collaboratively to broaden geographic reach, extend expertise, and close more business. These networks are widely varied in structure and format, from very loose to contractual in design. In the following paragraphs, we discuss in detail each of the many ways partners are collaborating, the strengths and weaknesses of the alliance (be it formal or informal), and what roles partners, suppliers, and distributors have in the mix. I segment the various types of networks as follows:

·         Pure P2P networks provide alliance opportunities between partners seeking out new skill sets and relationships that will enable technological, vertical, geographical, product, service, and end-customer revenue growth. The goal is for partners to share best practices, find complementary partners, and broaden their customer base. These alliances can take many forms between partners: formal and ongoing (legal), occasional (formal or informal), or on an ongoing but agreed-upon short-term basis similar to a subcontractor engagement that is project based.

·         Vendor-driven networks help bring together partners that share a common technology goal and disparate skill sets but ultimately drive increased vendor revenue. Although these are necessary and beneficial networks for both the vendor and the partners, there are limitations to them due to their vendor-centric nature.

·         Distributor-organized networks bring together a large range of partner skill sets, customer relationships, and technology relationships surrounding a specific market segment or vertical. These are similar to vendor-driven networks in that the distributor is seeking to increase its sales. They are different from vendor networks in the fact that distributors work with multiple vendors, therefore, they are not driving a single vendor’s revenue.

·         Third-party "marketplace" networks allow customers to seek service providers for low-end services (installation, maintenance, and some configuration). Partners join the program and work via the tool to extend expertise and geography with their services. There are different example emerging in the market now, one currently is OnForce.

 

There is happening a lot and the Peer-to-peer networks (P2P) in all forms help drive important dynamics within the channel ecosystem. It drives peer relationships as well as sales of product and service within the channel ecosystem. Whether these networks are created organically, facilitated by new Internet tools and communities, driven by vendors, or initiated by distributors, I believe there are inherent benefits for partners to participate in these essential forums. Each has its own goal and serves its own needs:

·         Partner networks have been around for some time, but incident rate and types of networks are on the rise.

·         Partner networks will have different goals, but the common factor across each network is the need to broaden the scope of reach for a partner to better serve the expanding use of IT in the customer base.

·         Partners have the ability to participate in multiple networks. When partners enter into a network, especially one that is vendor driven, there can be many points of influence. Suppliers should use this opportunity to bolster their partners’ loyalty because this can wane depending on the type of network the partner joins.

 

What is the FUTURE OUTLOOK – how will things evolve?

It is already happening, P2P networks will continue to increase in number and design. Suppliers, distributors, and third-party for-profit companies will continue to assist and even capitalize on this growing trend. Tools will continue to emerge. But this trend will eventually stabilize as all trends do, and with this balancing (adoption rate), I believe we will see several factors arise:

·         The emergence of a lot of full third-party peer-to-peer networking community

·         The acceptance by vendors and distributors that they control a partner-to-partner network and should focus on creating stickiness in a partner community with relevant sales and marketing tools, education, and support

·         Partners entering any type of network and hoping to meet others with whom they can partner (Suppliers are best served to keep their partners close with an eye toward loyalty because this can wane if partners are not satisfied and are entering a network with new influencers.)

 

I strongly believe that Channel excellence and loyalty is made, not born. As I’ve stated, even when building an ecosystem, partners and suppliers cannot ever hope to win partner loyalty via partner networks. They are relevant communities within which to educate partners and to create some stickiness where partners will want to return again and again. But to hope to create incremental brand revenue is folly….for that one must change the business model, the partner model and a new partner loyalty program. Such advice about adding the partner capabilities may seem simplistic in theory, but I do realize that it is much more difficult in practice. That's why I’m dedicated to helping you Channel and Partner landscape grow and master this difficult transition and task.

 

Feel free to contact me if you have any questions: mvr@rosenteam.com

 

Regards - Mark

 

 

 

Partners and there compelling reason to act!

The funny thing with the Executives is that I hear so many of the Partner Managers that come to my courses saying that in the absence of value, nearly every transaction or decision of the partner will revolve around price! Which is quite true - for in the absence of value, what is left .......................yes the price!

 

We all (including you) cannot presume that our partners perceive, understand, and comprehend the value of any product/offering (or whatever you try to sell through your partner) without having it first interpreted for them (in terms of their needs, wants and value expectations). Price is such a dominant factor in today’s crowded marketplace that the value you deliver must be so clear in the mind of the Decision Maker from the partner that it supersedes his or her drive to seek a progressively lower and lower price (from the different vendors they have).

 

It must fulfill their Business as well as Personal Decision Making reasons - it must give them the compelling reason to act!

 

Regards Mark von Rosing

 

 

Aligning Business and Channel Strategies - a very demanding task

Having meet so many Executives on my channel courses and trainings I have seen some of them that are very good at Channel Strategies, while others really can’t, and I have to be honest that I have wondered how it is that one can do it, while the other can’t ..…and another thing that interests me is how they do can do their channel strategies consistently good? So what I’m trying to do in this forum article/discussion is to stimulate your thinking about how to align business and Channel strategies and hopefully get a lot of good discussions and input from that.

I do realize that most senior business executives have growth, innovation, better protection against risks, cost control, resource efficiency and a stronger ability to cope with constant change as major business objectives for the years to come. However, we all know that a well planned and executed strategy to take products to market is the foundation of any successful company. And through the implementation of an indirect sales force, the vendors or distributors are aiming for higher market shares without raising the costs of the own sales force further (let’s face it, this is what channel sales is all about). Therefore the most executives view targeted investments in an indirect sales force as important elements in achieving their objectives. What is for me however very interesting, is that research reveals that about 75% of all channel initiatives fail to deliver the expected business value (Gartner Group - 2006).

Every one of us that works with channel strategies fully understands that, what sounds quite simple in theory can in reality, incorporate many different challenges and issue (I guess that is why 75% of all channel initiatives fail to deliver the expected business value). This leads us back to what I actually want to discuss; aligning business and Channel strategies. Let us take a look for what is needed when vendors and distributions around the world, create a strategic plan with focus on multi-channel revenue growth, they should not only take a look at best practice methodologies that have proven to work (you can read more on that in the best practice forum area), as well as you need to come up with some new innovative program with focus on identifying the important key initiatives that will differentiate your company and help you both gain growth and a competitive channel advantage.

By combining industry knowledge, research, as well as some channel best practice benchmarks and customer insight, you can now craft a channel sales strategy that aligns with your business goals. Typical questions you need to think about and addressed in the Channel strategy, include:

1) In terms of your Market Position:
• What is our current Channel SWOT position?
• Where are we in our Channel life cycle in terms of the “S-Curve”?
• How does our current Channel market share compare to our potential market share?
• How does our Channel Price-Quality ratio position us against our competitors?
• How can we strengthen our competitive differentiation in our Channel?
• What is our Channel innovation rate?
• How is our Channel brand positioned?
• Are we focused on the right Channel market segments?

2) In terms of your Financial Position:
• Which of our current Channel investments are delivering the most value to our business?
• What new Channel investments will deliver more value to our business?
• How do our IRR, ROI, ROS and relative cost structures position us in our Channel market?
• How do our Channel productivity indicators compare to market leading companies?
• What is our current level of Channel risk?

3) In terms of your Stakeholder Trust:
• How well are we meeting our key stakeholder’s needs?
• What stakeholder interfaces are building trust? Breaking trust?
• How can our Channel cope better with rapid, on-going change?
• What are our Stakeholder Satisfaction Indexes (e.g. Customer and Employee) telling us?
• How well are our value chain partners integrated in our strategy process?
• How are difficult Channel decisions taken?

These subjects and approach is not the strategy, however it aims at helping you better prioritize and align your Channel Strategy and thereby your channel investments – to realize those values that matter the most in reaching key business objectives – short and long term.

I hope this has helped or given you something to think about………and look forward to read some comments or new aspect or ideas to this discussion!

Regards your Moderator – Mark von Rosing

How to build a Partner Recruitment Program

What I'm trying to do in this forum article/discussion is to share with you some of the strategic best practice knowledge I have gathered over the years, about how to recruit Partners to become Partners and hopefully stimulate your thinking and get a lot of good discussions and input from that.

Once you have decided to sell through Partners/Partners you have to first decide which partners you wish to target. You must then a) put together your reseller program (for VARs and System Integrators), b) create your reseller kits (for retail and/or VARs/System Integrators), c) and then start recruiting--otherwise you have little to talk about. Trying to recruit partners, before you "have your act together" will blow rare and often single opportunities--sometimes eliminating a chance to try again later.

The Reseller Continuum
Partner Partners fall within a continuum. Typically, the more; -lower price/margin, -high volume your category (i.e., games, personal finance), the more you will target the mass merchants (Microsoft Navision Financials sell even in big B2B sales markets there ERP-Financial Business package, Target), superstores, and software chains. You will also target B2B on-line and catalog partners.
When your product is high value added, requires a lot of service and support, has lower unit sales, is custom developed, etc., then you would target the VARs and System Integrators, the regional dealers and corporate direct (Corporate Software).

Distributors
As described earlier, distributors are wholesale dealers who sell to other dealers (partners). Most partners (retail and VARs) prefer to order through distribution (some order direct, depending on the product and company size) since they have fewer phone calls to place orders (a few distributor calls instead of hundreds of separate vendors), the distributor will often provide financing (allowing partners time to sell the items prior to having to pay for it), will warehouse inventory and manage returns.
The benefit that wholesale distributors provide to vendors is warehousing and inventory balancing (some partners may return items, that other partners will order), credit and collection for thousands of partners, an established customer base of partners that will order product, promotional programs to reach specific partners (they know which ones are ordering competing or complimentary products and can help you target these accounts).
The disadvantage of using a distributor is you sometimes don't know who is buying your product--so you can't establish as direct a relationship. You know who the national's are since you have to sell in and they can tell you what they ordered, but not the regionals and independents. In retail, I typically expect the nationals to take apx. 1/2 to 2/3rds of the distributor inventory--however, it is the regional and independents that take the rest (although with the advent of the internet partners, the ratio may have changed), and they seldom require expensive co-op and MDF, so for your overall margin's sake, it is critical to get these regional and independent partners selling your product.
The other disadvantage of using a distributor is that they require margin, which increases your final street price. The average margin that a distributor will tack on is 5 points--although this can vary significantly by software, accessories, and hardware.

Retail
If you are going into B2B retail you will need to further define which retail outlets will sell your products--which determines your target. Many of the retailers segment themselves by the type of product and price point that appeals to their intended market. For example, a mass merchant like Wall mart would cater to the sub €49 and less relatively non-techy audience--with most software being personal productivity and games within the €9.95 to €39.95 range (you will not see a €599 copy of Photoshop sold in Wall mart).
On the other hand, the consumer electronics superstore, Frys, caters to the techy (with qualified technical staff), and they supply everything from motherboards, power supplies and processor thermal paste, to consumer game software--both locations will sell the lower-end products, but only Fry's will sell the high-ticket, specialized packaged software (like Photoshop).

Recruiting Retail Partner
Recruiting the national retail partner is relatively straight forward. They have single national offices that you can visit, e-mail or call, with single buyers that handle your product category. You have to contact the buyer, present your product, pay extortion fees (MDF/Co-op), and you're in (at least for the first month--and your out again if you can't meet the minimum turns/location for that chain). The mass merchants have a similar process, but they are sometimes serviced via a merchandising firm such as Lenovo that uses this model. Even in the B2B space it happens that a merchandiser "owns" select shelf space (in inches) and it is their duty to select the best products to maximize revenue for the store (and them).
Regardless, the process is fairly straight forward with the national accounts--direct sales and relationships are king. I have gotten products into national retail locations simply because I know the buyers, and they know that I already know how to play the game...so we play. Some of the products I have gotten in have never made it past the door in multiple prior attempts. Having the right material together, proper packaging and relationships increases the odds that you'll get this rarest of shelf space.
Regional chains, on the other hand, can be sold into similarly, but it may take more effort to ferret them out. The nice thing however, is that regional chains don't seem to know how to play the MDF/Co-op game as well, so it is less expensive from a 'fund" basis--but more manpower intensive.

VARS and System Integrators
In contrast, VARs (Value Added Reseller) and System Integrators are often highly specialized, very fragmented and you often have to market to them to pull them out of the woodwork. There are VARs that only cater to CADD, while others only sell into telcos, still others may concentrate on physical security enterprise software. Unlike the mass merchants, chains and superstores, you often have to find them one at a time (your biggest system integrators may have dozens of offices, but many VARs are single shop locations). As a result, finding the right vertical partners could prove challenging.
In addition, once you've found the right VARs, you may still have to train them and walk them through your product sales process multiple times before they can even close one deal. Sometimes it can take a good 6-12 months of concentrated effort before you have a trained and modest VAR/System Integrator reseller base.

Recruiting VARs and System Integrators
The first step, once you have identified the type of VARs you want (by size, certification, vertical expertise, accounts, etc.), is to source your reseller type and build your database. This can be done from the following sources:
• Vertical trade shows
• Hire a training/rep firm
• Wholesale distribution
• Retail or VAR Vision
• VAR Xchange - in all it's variations (sometimes they have vertical events (like "Security Xchange")
• Advertise in a industry magazine or a reseller trade pubs and collect the respondent names
• A reseller-centric trade show
From experience, some specific approaches to consider, include:
• PR. Always lead with PR, it is 1/7th the cost and 15 times more believable. Partners tend to sell what they know about and what gets good reviews. You will need to submit your press releases for first looks, product for reviews, etc. in order to get the massive buzz that can happen via the press. To prove this out, at one company we received apx. 4 times the reseller and customer inquiries from our press, than from our entire display ad campaign.

• Newsletter Advertising. Industry Publications have one of the largest customer databases and send weekly e-mail newsletters that have a "sponsor" listed on the top. Usually these sponsors will advertise a seminar or something generic. It appears that most sponsors do what everyone else does--which seemed pretty useless to me. I suggested a direct response to the VARs to get something free. I wrote the following copy for one of the companies I worked with (limited to 6 lines of text):

Sponsored by ChannelSales.org
First 50 replies gets Partner/Channel application FREE
Develop Partner/Channel applications in days, not months.
No time consuming ASP or PHP code—point, click, & publish.
Winner "Best channel software of the Year" PC Magazine 2007. Reg
€349. Only €99 until Dec 31st. Be one of first 50 and get it free!
www.channelsales.org

• Display Advertising. The advantage of PR is that it is cheap--the disadvantage is that they don't always relate your key benefits and messaging as you would prefer. They also don't always provide contact information. Display ads allow you to position your products and run reseller promotions for investigation. You can also announce promotions to local and regional partners that already sell your product, but you aren't aware of them, via display ads.

• Direct Response. Direct response can be via mail, Fax, or nowadays e-mail. This is especially effective if you have a reliable list of prospective partners (like a list scraped from your competitor's Web site). The only problem is that partners get bombarded with direct response and your info could get lost in the pile. One approach that has worked for me is direct mail 5 1/2 by 8 1/2 sized four color postcards--the reseller can see the offer and promotion without even having to open the envelope (better make it compelling). I have also had terrific response and ROI from card decks (like VAR Business)--specifically since they are relatively inexpensive. Of course these card decks use even smaller postcards--but it is the same concept (a compelling offer is required).

• Roadshows. I setup my first roadshow by recruiting 4 other vendors for a 1/2 day demonstration to 3 cities. In the morning we invited VARs, and had customers in the afternoon. We had over 150 partners at our first regional event (at a hotel), and immediately booked for 15 more cities. We ended up seeing over 800 new VARs during this 8 week event--recruiting about 70%. The tour was effectively paid for by our four participating alliances--since we sponsored the event. Great ROI and results.

• Trade Show attendance. In the old days, many of the trade shows were reseller only, where you could hang out a sign and recruit partners. Most today are B2B end-user shows. Even still, bring the sign to recruit partners/partners--some of your best ROI will be from partners that eventually sell your products/services. There are still some specialized reseller events such as Retail and VAR Vision as well as many local events. Retail & VAR vision is a part of Gartner Group. Both of these events as well as many of the local events invite top Retail and VAR decision makers to view your presentations--and allow you to network and recruit partners.

• Promotions via distributors. Distributors have a complete list of direct fax, e-mail, spiffs and promotions to contact the partners you want and promote to them. See your distributor's packages for ideas of what they can offer.

• Telemarketing. There are many companies that can call for you on the possible partner direct with a massive database and provide NFR copies, information, etc. to get you connected. or, you could have your own Partner Manager team call into the possible partner accounts to contact and recruit them (I believe the last to be best).

• Alliance cross-marketing. Your alliances of complimentary products are always an excellent source for partners. You can contact their authorized VARs and offer bundles and promotions--knowing that their partners are already familiar with the space.


I hope that these best practice views on partner recruitment help you better prioritize and align your strategic Partner Recruitment Program.

Regards your Moderator – Mark

channel conflict!!!

Let me start with saying that I know that this discussion point is a very controversial discussion point. However as this is such an important matter, will I choose to pick up the discussion and look forward to different meanings and approaches.

The first question many companies address in wetter they should go direct or indirect with their sales and what about possible channel conflicts. Often the answer is do it--especially since the popularity of the Internet. The key, however is to avoid most of the channel conflict that will arise.

Channel conflict occurs when the vendor (you) and the partner, or different partner types (retail, VAR, mail order, Internet) compete for the same business. I say “most” of the channel conflict, since it is fine to have some conflict--partners may compete, and there may be some of the business that you can take direct . For example, you might go direct with massive deals that are too big for a partner to finance (such as a 1.3 billion deal overseas), or very small deals that don’t require any special training/installation/consulting--hence won’t provide margins for your partners who make money on their ‘value added’ services.

To minimize conflict you could:

1) Segment the products (different products are sold through different partner types or channels)
2) Setup exclusive or limited territories
3) Sell direct at a higher price than the average street price
4) Setup different promotions for different partners--rotating so they all have advantages at different times
5) Provide MDF/Co-op and let the partners choose to establish their own competitive advantage
6) Setup partner levels--rewarding higher margins and support for higher authorization (the partners choose whether they can be competitive)
7) Setup a process to determine if a customer has worked with a partner prior to taking the business direct (so you don’t steal business they cultivated), etc.

There are multiple ways that you can reduce conflict--the key is to be aware that it could exist and of your ramifications (short and long-term), and that you do something about it to keep your partner and revenue targets satisfied.

One vendor long gone, Ashton Tate, had a terrible problem with channel conflict (they would sell direct and undercut a prospect the partner had cultivated)--as a result, their partners hated them. They still sold their products since they were so popular (dBase), but were rooting for a competitor to take them out--which happened.

It is also a problem if you have no conflict, since it usually indicates that you don’t have enough sales coverage--there could be parts of the market you are not covering (missing RFQ’s, not knowing about the opportunities, your product is not sold where the customers traffic, etc.).

I truly hope that this gave something to think about!


Regards your Channel Sales Moderator – Mark

 

Channel Marketing ??????

The most Partner Managers and salespeople I meet, actually have something against marketing……..and while I don’t really want to discuss why this is or how that could be changed. I would like to focus on how marketing could bring partners to your business (into your parter portfolio). Once they are there, then you can carry out your partner manager/selling activities. What the most Partner Managers and sales representatives that I meet don’t know is that marketing is the process of attracting. So anything the Partner Managers and salesperson does to get partners through the door is marketing, whether it is cold calling, a referral, direct mail or the offer of a free seminar. So a sales person does marketing as well, just another type of marketing then the company does (corporate marketing).

A Channel Marketing Manager is typically responsible for the sell-through function. There are cases where a Channel Marketing Manager handles all sell-in and sell through via the channel, and the internal sales people concentrate on selling direct--this may vary according to your organization.

The Channel Marketing Manager works in partnership with the head of Channel Sales and his Partner Managers to:
1. Establish a competitive partners program (authorization, margins, levels, etc.)
2. Help recruit partners
3. Prepare the proper partners collateral
4. Create partners kits (sell sheets, product slicks, catalogs, partners pricing, NFR product, distribution part numbers, contact information, reviews, etc.),
5. Manage partners database and Partner Relationship Management (PRM) software
6. Jointly invest the market development (MDF) and Co-op funds to increase channel sell-through.
7. This sell-through is accomplished through managing store, VAR and distributor promotions (spiffs, contest, rebates, specials, training, promotions, etc.),
8. Ensuring proper merchandising (retail only)
9. Ensuring adequate stocking levels
10. Running partners education
11. Setting up motivational contest to reward sales
12. Manage seeding programs.
This person is also part of the marketing team and participates with Product Marketing, PR, the Webmaster (for the partners portal) and Advertising to ensure that the specific partners needs are met.


So let’s just face it that a partner manager and a sales person as well as the company does partner marketing, both just have different parts to play!

I know this was a controversial note ………and hope that it gave something to think about!

Regards your Moderator – Mark

Das mächtigste Werkzeuge zur Beeinflussung von Partnern

Diesen Artikel schreibe ich bewusst in Deutsch, da ich persönlich der Meinung bin das hier die meisten Deutschen etwas lernen können. Dies ist nicht als Vorwurf gedacht sondern als ein Ansporn. Wir wissen alle das Lob motiviert und zeugt von Anerkennung - deshalb ist auch Loben eines der mächtigsten Werkzeuge zur Beeinflussung des Verhaltens anderer Menschen. Das gilt vor allem im Berufsleben, z. B. gegenüber Kunden, Partnern, Mitarbeitern oder Geschäftspartnern. Trotzdem geizen die meisten Vertriebsbeauftragten, Selbstständige und Unternehmer mit lobenden Worten und positivem Feedback an ihre Umgebung.

Trotz das viele Menschen sich nichts sehnlicher wünschen als Anerkennung und Wertschätzung durch ihre Umgebung. Dies gilt ganz besonders für das Berufs- und Geschäftsleben! Doch ausgerechnet hier kommt positive Anerkennung viel zu kurz. Dies kann ich als Däne eigentlich nicht richtig verstehen, denn unsere Kultur ist dort anders. Den glaubt man einer aktuellen Umfrage der Jobbörse Stepstone unter 10.000senden in acht europäischen Ländern, dann hat Deutschland das größte Aufholpotential, den dort sind "mehr als die Hälfte der Kunden haben den Eindruck, dass ihre “Einkauf“ von ihrem Lieferanten nicht geschätzt werden. Bei Mitarbeiter ist es noch schlimmer, den Sie hungern nach Anerkennung, den nur 28 Prozent wissen sicher, dass ihre Arbeit honoriert wird."
Ein Blick ins benachbarte Ausland zeigt überdies, dass es wie ich es erwähnt hatte, erhebliche kulturelle Unterschiede beim Verteilen von Lob und Anerkennung gibt: Vier von fünf befragten Niederländern sind sich beispielsweise sicher, dass ihre Arbeit anerkannt wird. Dort sehen sich lediglich 11 Prozent nicht oder ungenügend gewürdigt (mit 56 Prozent sind das in Deutschland fünfmal so viele Menschen!). In Dänemark, Schweden, Norwegen und Italien empfinden immerhin zwei Drittel aller Befragten genügend Wertschätzung.

Das heißt es gibt wirklich ein Lob-Lücke...
Ich sage nicht dass die Ergebnisse der Studie repräsentativ sind. Bin nur der Meinung das es einen gewissen Gedanken Anstoß geben sollte, dass gegebenenfalls viele Menschen von der Aushilfe bis zum Vorstandsvorsitzenden an einer möglichen "Kultur mangelnder Anerkennung" leiden. Dies alleine sollte Anlass sein, über das Loben nachzudenken.
Einen Mangel an Lob und Anerkennung gibt es nicht nur im Verhältnis von Vertriebsbeauftragten, Chefs und Vorgesetzten zu Ihren Kunden, Arbeitnehmern oder Mitarbeitern bzw. gleichrangigen Kollegen untereinander.

Meine Anregung an euch; denkt an Situationen wo ein Partner, Kunde, Kollege, Familienmitglied an "Unterernährung" in Sachen Wertschätzung leiden könnte und probiert dann mit lobenden Worten und positivem Feedback in eurer Umgebung einen Unterschied zu machen.

Wichtig für mich hier ist, das Ich in keiner Form anklagend sein wollte, dies ist ein Ansporn das man eventuell auch im Partner Management benutzten könnte. Ich freue mich von euch zu hören und verbleibe bis dahin mit den Besten Grüße aus dem heiteren Copenhagen.

Euer Moderator Mark