Posted By: Mike Moore, Averetek /
In a recent LinkedIn post, Larry Walsh, CEO and Chief Analyst of The 2112 Group shared his perspective that brands aren’t responsible for transforming their partners’ businesses. As the tech industry shifts its delivery of solutions to the cloud, and as customers shift their buying preferences from purchases (capital expenses) to subscriptions (operating expenses) channel partners must evolve their sales processes, compensation, and solution delivery models to suit the needs of modern buyers. Not making these changes will cause partners to lose relevance in the market and they’re likely to shrink rather than grow their customer base.
Walsh suggests that there is a role for brands to play, but it’s different than taking responsibility.
“As a vendor, you can help create the conditions in which partners can thrive. But you can’t take the first step for partners; nor should you carry them into the future. Vendors already complain about the unproductive partners they carry in and around their channel programs. Taking on the transformation responsibility is just continuing to reward bad behavior by disengaged partners.”
Walsh is looking holistically at the transformation that channel partners and brands must go through, but I read his post with a narrower lens. Among all the areas that need transformation, brands and partners must shift their approach to marketing to be more inbound-oriented instead of the antiquated outbound approach.
Outbound marketing relies on the repeated use of email and phone calls to wear down prospects until they agree to attend an event, have a meeting, or download a whitepaper. Inbound marketing relies on sharing helpful content in a variety of formats like videos, eBooks, and SlideShare presentations to attract the interest of prospective buyers. Inbound starts early in the buyer’s journey when buyers aren’t yet looking for solutions to their problems and continues all the way through the shopping and buying phases of the process.
Teaching partners the ways of inbound marketing (and how inbound marketing can lead to smarter outbound marketing) takes time and patience. Channel partners are not known to be skilled or patient when it comes to marketing. This is a sweeping generalization that certainly has exceptions, but the partners who are the exception are likely the same small group Walsh refers to in his post.
“Vendors often lament the limited number of “the right partners.” Vendors will often point to the 80/20 rule, or Pareto principle, as evidence of this limited partner supply, saying 80 percent of the channel revenue is generated by 20 percent of the channel partners.
The fact is, that ratio is more skewed than vendors think. In assessments of channel performance, 2112 has often found that as much as 90 percent of the channel revenue is generated by less than 5 percent of active partners. The numbers improve slightly when we count only partners with status in a channel program, but rarely does the ratio move beyond 90/10.”
If you subscribe to Walsh’s analysis that 5-10% of channel partners are producing 90% of the revenue, it’s likely that this group is also the segment of partners who are using up-to-date digital marketing practices to fuel their sales pipeline.
So, given all the upheaval and transformation, what should a channel marketer do? Let natural selection run its course or attempt some intervention?
Here are my recommendations:
- Focus on the short-term and try to create the right conditions for partner success. I agree with Walsh that you should not pull too hard to bring your partners into the present and future. I recommend crafting programs that offer training, compelling content, and incentives to encourage partner participation. Don’t skimp on these three components. They’re all needed to create the right conditions for success.
- Find ways to help partners that are willing to engage and play to their strengths. What are your partners good at? What lead-generating techniques work for them? Create programs that help them deliver more of what works. Attempt to integrate some progressive inbound marketing practices as you go, but keep your partners busy with tactics that they are comfortable with.
- You may decide that when it comes to partner marketing, you’ll just do it for them. As Peter Thomas and I wrote about in Marketing Multiplied: A real-world guide to Channel Marketing for beginners, practitioners, and executives, there are times when you must be realistic about what your partners can deliver. Revenue is the goal, and if you can hit your numbers by running demand generation campaigns for them, and letting them handle the resulting leads, the end may justify the means. Ideally, a program like this would evolve to a with-partner campaign next, and eventually a through-partner campaign after that. Your long-term goal should be to build independence, not deepen the partners’ reliance on you.
As you look at the path forward with your existing partners and consider the partner recruitment you’ll do in the future, you can consider another point I thought about while reading Walsh’s post. Whoever your partners are and wherever they stand in their transformation, it’s important to consider the potential of your partners, not just their past performance. To that end, Walsh offers some profiling questions to use that probe each partner’s investment in their future and how risk tolerant they are. We often profile partners based on their past performance, but for existing partners and recruits who are investing and willing to take risks, you may find some great targets for your marketing programs. Don’t forget to plan to take some risks, too. You may find great rewards.