Enabling Channel Partners to Effectively Sell to Small Business

On Wednesday the 17th I attended the Corporate Executive Board's Enterprise Council on Small Business member meeting in Philadelphia.  The meeting entitled Selecting and Building Channel Partnerships included attendees from about 10 member companies such as; Xerox, Symantec, Experian, Erie Insurance and Comcast, who hosted the event. 

ECSB practice leaders opened the meeting reviewing recent research on enabling channel partners to effectively sell to small business (title of the post).  The research compared the performance of high and low performing partner programs.  The meeting also included a review of best practice case studies.   Highlights from the research include:

• How small business owners want to buy - business owners stated that the type of supplier most preferred was a local supplier (34%), followed by a sales rep selling multiple lines (26%).   Top 3 reasons they buy from a local supplier; 1) location, 2) know them personally, and 3) responsiveness (immediate answers to questions). 
• What high performing partners want from companies - 1) Training (all types), 2) Evaluation (compensation related), and 3) Resources (access to information, additional infrastructure, etc.)   This was interesting because low performing partners ranked Leads as #1.  
• High Performing vs Low Performing Partners - the size or maturity of the partner's business did not impact the findings, however the age of the ownership team did; younger partners performed better than their older peers.  
• Partner Compensation - the preferred plan was overwhelmingly  "percentage of sales" 38%; flat $ per unit commission 17%, and discount (either dollar or percentage) was 13%.  

Highlights from the case studies and discussion:

• Measuring Partner Performance - 61% of partners said that they are evaluated on a single metric. Number one metric "Volume of Sales".  Most of the attendees also agreed, only one had used an additional measurement for performance. 
• Net Promoter - the additional metric used was a net promoter score to measure the performance of partners...really interestiing application of this tool
• Using a Third Party Facilitator -  the use of a third party mediator was highlighted in one of the best practice case studies.  The company used an outside facilitator to help the two companies negogiate a partner agreement.   The goal of the mediator was to encourage honesty, and bring about an accurate appraisal of the relationship potential.  Really interesting process to get at what's in it for both parties, and for getting everyone aligned on expectations. 

My key takeaway was that there is a significant opportunity to improve partner performance that is being missed. The opportunity is directing partners to desired customers and/or market segments.   Granted some partners are selected just for that reason, but in general, companies do not typically articulate what customers they want or who are best for their products.  A couple of members mentioned that they organize products against customer segments and assume that points partners in the direction of those customers.  

I don't think that is enough.  At the end of the day, manufacturers know how to sell products better then partners.   As a result, they should know which customers/type of customer will most value their product or service, and those customers that will be most profitable and loyal.  Use this information to help partners understand, and identify what a good customer looks like, and why.  Give clear direction on what you want.  If there is one thing we've learned from previous research, it is clear communications with partners is highly valued, that in itself might be a win.

Avaya Helps Partners Learn How to Market

The Business Marketing Association (BMA Colorado) is producing a book later this year entitled: “Advice From the Top – The Expert Guide to B2B Marketing.   I'm authoring a chapter on collaborative partner marketing.   As part of my research, I was fortunate to interview Patti Moran, Worldwide Channel Marketing Director at Avaya.   Patti shared with me how Avaya is helping partners improve their marketing capabilities, competencies and outcomes.   It's a good success story worth sharing.  

The Situation 

Because of their traditional focus on converting, rather than creating demand, Avaya’s partners lacked an understanding of how to effectively manage customer accounts, nurture relationships, build awareness and create new opportunity by marketing their business services and solutions.  Not only did they lack the marketing insight to generate demand but even apart from this gap in knowledge, partners also lacked the marketing tools, resources, skill sets and experiences to market, sell and deliver their solutions. 

According to Patti Moran, Senior Director of Worldwide Channel Marketing at Avaya, 90% of their channel partners lacked a dedicated marketing support individual in-house.  Noting this dire situation, Moran contends that ultimately “It’s not enough to just be a sales organization.  To be successful at growing and adapting to the market condition partners have to have a marketing functions."

The Solution 

Recognizing the need to educate, train, and then arm their partners with the necessary materials and resources to remain competitive, Avaya created a series of global workshops titled Marketing Masterclass with distributors to educate and provide resources and tools to enable mid sized and small partners.   During the workshops, Avaya helped partners evaluate their strengths and weaknesses, allowing them to better understand how to position and differentiate themselves in competitive markets.

To continue the momentum generated by these workshops, Avaya created an education curriculum called provided partners with “How to Guides,” covering marketing topics ranging from delineating how to write marketing plans to delineating how to build websites or leveraging social media.   Finally, Avaya developed a spectrum of shared services to support their partners’ marketing efforts, both full and self service. 

Avaya providing access to supporting services, databases, events, content, and preexisting templates and pre-built product pages, either for free or at highly discounted costs. Avaya, for example, created a self-service “Partner Marketing Central” portal that provides free and easy to use email blast technology, seminars and whitepapers, and access to over 200 customizable marketing materials with a full range of media. 

Avaya also created “MarketLeaders" a full service campaign program that delivers integrated campaigns with end-to-end support in order to achieve a range of goals from relationship management, demand generation to customer engagement, enabling partners to use MDF or BDF funds to drive leads, nurture relationships, and build awareness.

Financially, Avaya even sought to ease their partners’ cash flow concerns by invoicing and debiting against their funds rather than insisting partners pay up front, thereby increasing partners’ speed to market by providing more current resources.

The Results

The success of Avaya’s efforts, characterized by full classes, newly engaged partners, and efficient MDF and BDF spending, has been met by requests from partners for even more education.  Furthermore, the global breadth and overall extent of participation speak volumes to Avaya’s success—and because of this success, components have been provided in multiple languages, and offerings such as the self-service Partner Central have been utilized across country borders by over 2,500 worldwide members to create over 33,000 highly customized and targeted marketing materials to date. In addition, in the Americas alone over 1,200 partner companies have taken advantage of MarketLeaders Campaigns to generate over 1,950 of their own strategic campaigns. 

Partner Marketing Model Webcast

On June 16th, I hosted a live webcast along with Bob Ray, President of GyroHSR's San Francisco office. The theme of the webcast centered on how new technology trends, like the Cloud, and shifting partner business models are opening the door for vendors to redefine the partner relationships.
Other highlights include:

• Tech trends have shifted the focus of executives, and the recession has caused customers to be more cost conscious
• A new focus on professional services/managed services has caused a longer sales process which means reps and partners need help selling.   
• The average ramp time for a productive IT sales rep has gone from 7 to 10 months
• Generally, IT execs do not feel sales reps UNDERSTAND their business
• Engagement through data sharing, pre-packaged marketing solutions, and program planning with partners are ways to create more mindshare.

The rehearsal presentation was recorded and is now available OnDemand Presentation.  
Channel Insights Newsletter To learn more about GyroHSR’s Channel Marketing Practice and subscribe to the GyroHSR Channel Practice Newsletter please visit: Subscribe here