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020 - Channel Congestion is k*illing Partnerships · Partnerships Unraveled

• 0:07
  Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries of partnerships and channel on a weekly basis.
• 0:15
  My name is Rick van den Bosch, and I'm the CEO and founder at Channext.
• 0:18
  And I'm here together with my co-host Alex Whitford, VP partners at Channext.
• 0:22
  Alex, how are you doing today?
• 0:24
  I'm doing really well, thanks Rick.
• 0:26
  I'm excited to be here.
• 0:26
  Yeah.
• 0:28
  And I think especially with the topic we're going to focus on today, right?
• 0:31
  Yeah, absolutely.
• 0:32
  And we're talking about all the opportunities within channel.
• 0:35
  I think we, we read a crazy statistic the other day, around 200 SaaS brands entering the market every day until about 20-30 and a huge opportunity and focus area for most of those businesses is entering channel and partnerships, which I think if you work in the channel today is a really, really exciting opportunity.
• 0:55
  But it does introduce a bit of hyper competitiveness and a new challenge that's not been in the market very long, which is channel congestion.
• 1:04
  Yeah, I think the definition of channel congestion is that more and more vendors are entering the market, therefore the competitive landscape is getting more and more competitive for those vendors.
• 1:14
  And we are all like getting in line for the same type of partners that we want to engage and help to grow their business together.
• 1:20
  Right?
• 1:20
  Yeah.
• 1:21
  And what happens, and it's really funny, any sort of history or economic stuff will tell you that the same thing happens over and over again.
• 1:29
  The market wakes up to a new opportunity, lots of people enter that market processes and design and market orchestration happens and then market consolidation happens.
• 1:39
  And so that's why there's three big oil companies, three big data companies, three big pharmaceutical companies, because over time, through mergers, acquisitions and competitiveness, the sort of market standards happen.
• 1:53
  What's really interesting for the sort of partnerships and Channel game is we are now getting into that boom era and then we're going to get into market consolidation.
• 2:02
  So I think the channel economic forces are going to start coming into play and you've got to really, really focus on the right factors so that you can be on the right side of that line and not the wrong side.
• 2:13
  Yeah.
• 2:13
  So I think there's indeed a massive opportunity in terms of where channel is heading because it's becoming such a focus point for all those vendors.
• 2:21
  But there's also a little bit of a downside to it because within your partner program it can maybe be harder and harder to remain the attention of your partners.
• 2:29
  Yeah, absolutely.
• 2:30
  I think there's lots of people trying to grow the number of partners they work with or work with a very specific set of partners.
• 2:37
  But whereas before you were just able to put a good proposition in front of them, good healthy margins, now because so many saas brands are in entering the market, well, they're all coming with good propositions and they're all coming with good margins.
• 2:49
  So now you've got a much more competitive landscape, which presents a mega opportunity to win.
• 2:55
  But obviously, you've got to play the.
• 2:57
  Game the right way and where to start if you want to play it in the right way.
• 3:01
  So to help partners win, you've got to focus on three key areas.
• 3:04
  You've got to let the partner know who they want to sell to, how easy is it to sell and how much money they've got to make.
• 3:10
  And you've got to base your entire go to market motion at solving those three things as well as possible.
• 3:17
  What you've got to understand is if a product is really easy to sell, then people don't mind making less margin.
• 3:23
  Right?
• 3:23
  It's a bit of a pyramid.
• 3:24
  You've got to get two of the corners and not necessarily all three, but you've got to at least solve, is it easy to sell and are they going to make a lot of money while defining icp very well?
• 3:34
  Yeah, and I think where it becomes interesting for vendors is what's quite hard at the moment is that many companies are entering the market.
• 3:42
  Everyone is also really looking at partnerships to grow and channel in such a way.
• 3:46
  But then to grow your partner program, every vendor has to do the exact same things.
• 3:51
  You need to recruit and activate new partners.
• 3:54
  You need to onboard and train them, and you need to continuously engage them in your sales and marketing activities.
• 4:00
  But if all vendors are expecting their partners to do the exact same activities, while the partners already have very limited time and resources, that's where it becomes very hard.
• 4:10
  Right.
• 4:10
  Like, how do you keep the attention of those partners?
• 4:13
  Yeah, I remember working with an It partner a few years ago, and we'd worked really hard on putting a really good incentive towards them.
• 4:20
  And some of the salespeople within the partner didn't seem that interested.
• 4:24
  And we realized it was because a competitor of ours had just built a better incentive.
• 4:28
  And so suddenly you get this race to the top of who's going to take the partner out on the biggest ski trip or off to Ibiza on holiday, and you realize if you're just going to play the game the same way as everyone else, you've got to make sure you have an enormous budget.
• 4:42
  So I think what's really interesting to understand is if you're not going to have the biggest budget, you can't do the same thing as everyone else, or you can't at least follow the same process even if your goal is the same, which, like you say, recruit, enable, and engage.
• 4:59
  Yeah.
• 4:59
  And I think that indeed is very much where channel congestion arises.
• 5:03
  So with all those vendors, we are expecting our partners to put time and resources into our partner program, so to say.
• 5:10
  But the partners are actually lacking time and resources all the time.
• 5:14
  They are working on their projects on generating new business.
• 5:17
  And a lot of the other things like training, marketing, et cetera, are things that usually fall behind quite quickly.
• 5:24
  And because of it, what we see there is that many more vendors are actually getting in line and asking those partners like, hey, can you please interact with me?
• 5:32
  Can you please engage with me?
• 5:33
  And that's where that congestion, so to say, arises, where actually we're all in line waiting for the partner to take action, but the partner is so overwhelmed with everything that they don't take action at all.
• 5:45
  Yeah, I can't tell you how many times I've had a conversation with partners where they tell me that they're aware of an opportunity to either work with a particular vendor or a big growth lever and that they can't do it.
• 5:56
  They can't get the staffing quickly enough, they can't train and onboard people, they can't add resource.
• 6:01
  And so they're constantly in a game of prioritization, which is, okay, which deals are we going to work?
• 6:06
  How are we going to grow?
• 6:08
  Rather than if we can grow?
• 6:09
  They're trying to prioritize the most effective way.
• 6:12
  And so you've got to base your recruitment and enablement strategy on giving them the key information so that they can make that decision effectively.
• 6:19
  It's not just enough of an opportunity to say you can grow with us, it's here's how you grow, here's how we can make it easy for you to grow with us.
• 6:28
  Because at the end of the day, and we've used the term remove the friction a lot, but at the end of the day, this can become how easy is it to grow with me versus how easy is it to grow with my competitor?
• 6:38
  If the answer is it's three times easy, you to grow with me.
• 6:40
  And you've got a very detailed plan on how to do that, well, I'm probably going to choose you as a partner because that's going to make my life easy.
• 6:47
  Yeah.
• 6:48
  And I think that's what it's all about for the partners.
• 6:50
  Indeed.
• 6:50
  And I think what you always need to remember is that your partners are working with at least 20 to 30 vendors.
• 6:57
  So every time they are doing certain actions, they have to do it for their own company, but they also have to do it for all the other vendors.
• 7:04
  And indeed, there you really need to think, okay, how can I embed my processes as much as possible within the processes of the partner there?
• 7:12
  Because then you will actually start making it easier for them.
• 7:15
  And indeed, the vendors that do that best will win the attention of the partner.
• 7:19
  It's funny, sometimes when I speak to vendors, they don't necessarily maybe agree with that statement.
• 7:24
  They say, no, we get the partner attention.
• 7:26
  And the statistic I always like to point them at is, how often do people log into their partner portal?
• 7:31
  Because what you'll see is it's something like 8% participation rate on a partner portal.
• 7:35
  And they'll tell me that their partners are very engaged and you see, well, the challenge is they might be very engaged when they're speaking to you, but they're never logging onto your partner portal because they got to log on to 30, 20 to 30 different partner portals to register different opportunities.
• 7:50
  It's just too much work.
• 7:51
  That leads to minimal deal registration, leads to the mis selling products because they're not very well aligned.
• 7:56
  At the core of this it's how do you effectively manage partner attention, how do you keep them engaged?
• 8:02
  And that's building your sales marketing enabled strategy with the partner at the center.
• 8:07
  And do you have some tips for our listeners where you could start, for example, in your recruitment or your onboarding process to remove some of that friction?
• 8:15
  Yes.
• 8:16
  So very, very clear rules of engagement, that's the first thing.
• 8:20
  So very often what I see is people throw training at a partner, but they've not taken the time to consider what they need the partner to do.
• 8:27
  So for example, some vendors gear their entire channel around referrals, right?
• 8:32
  They're just looking for introductions into potential endusers and then the vendor does most of the closure.
• 8:38
  Well, in that instance, you don't need to get the partner to do exams and certification and very detailed onboarding because the partner is doing an introduction.
• 8:47
  They need an unbelievable elevator pitch.
• 8:50
  Teach them the first 20 minutes how to get a call because what you're doing is you're giving them the minimum amount of education to get the maximum level of output and partners appreciate that level of detail because it means you thought about their way to succeed.
• 9:05
  pivot that to if you need a partner to run a full sale cycle, that's also fine, but break down the expected steps, what's needed from a pre and post sales perspective, what are the key ways to sell the product effectively?
• 9:17
  Don't just focus on why the product is good, but how to sell the product well.
• 9:22
  So from that perspective, I need really looking at what part of the customer journey does the partner manage and then be very precise in what training you then give to them.
• 9:31
  And I really like that idea.
• 9:32
  And if they are very top of funnel focus then give them training specifically around that.
• 9:37
  But also, even if they do the full customer journey, wait until when you are actually going to give the implementation training, for example, because if you give the training immediately and ask your partners to get their certification with other technical people, et cetera.
• 9:52
  And there is not even a deal on the table or an opportunity on the table.
• 9:56
  Then you will lose their attention quite quickly again as well.
• 9:59
  Well, if you bring it at the right moment to the right partner, that's where it becomes very interesting with your content.
• 10:05
  They are training.
• 10:05
  Yeah, and even things as detailed as onboarding and enablement plans for partners, right, giving them a view that guys, this is going to take twelve months to do with sessions every three weeks.
• 10:16
  And here's the certification program.
• 10:18
  But it's a real map from how we get you to knowing nothing about the product, to knowing absolutely everything and being fully independent and self sufficient.
• 10:26
  Me as a sort of leader within a partner, I'm going to sit there and go, okay, this vendor really understands how to make me successful.
• 10:32
  And they've gone through the level of detail, doing a lunch and learn with a bit of product on the table and a quick explanation, sorry, those days have just gone right.
• 10:40
  That might have been successful 1015 years ago, but now due to channel congestion, that's not interesting or effective enough to maintain a partner's attention.
• 10:50
  So now you've got to come with the level of focus that's not just, oh, I'm going to teach this partner, but I'm going to teach this partner more effectively than any of my competitors.
• 11:00
  Yeah, I think the key word here is relevancy.
• 11:03
  So make sure that you know your partners very well, that you segment them in the right bucket.
• 11:07
  So in what vertical are they focused, in what regions, what type of products do they sell, et cetera.
• 11:13
  And from there, bring them only content and training materials that's very relevant for them, no matter what kind of training or what kind of content, whether it's marketing, sales, enablement, training, et cetera.
• 11:25
  And if you do that continuously, that's one of the best ways to keep the attention because the partner knows that every time that you send them something that you bring relevant content.
• 11:35
  Well, a lot of the other vendors are really struggling with this, are doing a lot of email blasts, et cetera, to just bring as much information to everyone.
• 11:43
  But bringing the right information to the right partner is where the crucial point is.
• 11:48
  Yeah, I think on that.
• 11:50
  If you send email blasts, they will stop reading, right?
• 11:54
  Because you're better off hardly ever sending information unless it is relevant, like you say.
• 12:00
  Because if I get three email blasts in a row, I'm unsubscribing, and now I'm now not going to get any information, let alone relevant information.
• 12:07
  And the second thing that I would say to all program managers and channel salespeople, if you do a training and it doesn't have a call to action at the end, you shouldn't have done the training.
• 12:18
  Simply, if you're going to train a salespeople on how to prospect for your product, then go and do the first step, which is to go and prospect.
• 12:27
  Then take them through how to have the elevator call, then take them through how to do the first demo.
• 12:32
  Then take them through each segment of the sales cycle.
• 12:35
  As you're living and breathing the sales cycle.
• 12:38
  But you've got to have clear and concise call to actions so that the partner's job is do the training, then do the next step of the sales cycle, then do the training, then do the next step of the sales cycle.
• 12:49
  You're spoon feeding the partner, and people might think, oh, that's overkill.
• 12:53
  But the benefit is, if you're spoon feeding one partner, you cookie cutter t hat across hundreds or thousands of partners.
• 12:59
  And suddenly the level of focus that you've put into that one training session, you can now drive at hyperscale, which is obviously the full benefit of the channel.
• 13:07
  Yeah, I really like this idea because indeed then you really get into the mode with your partners where it's like we are training on something and then we're executing and in such a way you are really guiding your partners throughout the partner journey of becoming a successful partner from your brand.
• 13:22
  Yeah.
• 13:23
  And ask the partner to do the minimum effort possible.
• 13:25
  Right.
• 13:25
  So here's a very classic example.
• 13:28
  I'm going to give you English marketing content and then please can you translate it?
• 13:32
  The partner will never ever do it.
• 13:36
  You have to do that work on behalf of them.
• 13:38
  You have to translate the content or you have to verticalize the content or you have to take features and benefits and push it into a solution orientated sales message so that the partner's job is easy.
• 13:50
  You might not have had to do that and for some of the older channel heads they might be shaking their hair going well we didn't have to use to do any of that.
• 13:56
  Yeah, I'm sorry.
• 13:57
  The landscape has changed now it's so competitive and so many brands have woken up to the fact that channel is the most scalable way of making a business.
• 14:06
  That now you're in a different world.
• 14:08
  You have to do some of this due diligence ahead of taking the content and the processes to your partner to make their life easy.
• 14:15
  The benefit is as we sort of touched on at the beginning of the podcast, the macroeconomic forces will drive consolidation and partners will just pick the winners.
• 14:23
  They will just pick the brands that are generating the most demand at the end-user that are easy to sell, they are easy to generate, channel push.
• 14:31
  Those are the brands that are going to win.
• 14:33
  So invest in your programs, invest in your tools and automation to make that process really really tight and you won't just win a couple more partners, you will win the majority of the partners and really really build sustainable revenue and.
• 14:46
  If you show that continuously that's where you build so much trust with that partners as well.
• 14:50
  And indeed once that relationship is formed and once that mutual trust is there together with that you are both generating good revenue.
• 14:58
  That's where the best partnerships are formed.
• 14:59
  Right?
• 15:00
  And that's where almost like the attention keeps coming back automatically.
• 15:04
  So to say yeah, I think what you're talking about there is sustainable and self sufficient revenue.
• 15:09
  Right?
• 15:09
  People often ask me what's the goal of channel?
• 15:12
  And I always say, well you've always got to keep people reengaged, right?
• 15:16
  But then they get partners will get into a holding pattern.
• 15:18
  Once you've recruited them, once you've trained them, once you've certified them and enabled them, they should be sustainable and self sufficient.
• 15:26
  I e.
• 15:26
  The channel partner is capable of finding, creating and closing deals independently and they are able just to be managed.
• 15:35
  That's the goal to get as much of your channel towards that area.
• 15:39
  But that takes time and you've got to educate partners and sometimes even feed partners with leads and there's a process to get them to that point.
• 15:48
  But your channel program should be designed in two phases or three phases the recruitment phase, the enablement and certification and training phase and then the self sufficient phase.
• 15:59
  And once they're into the self sufficient phase then you're just reengaging new product information, new verticalized information, new marketing content.
• 16:06
  But up until that point you've got to put such level of detail and focus on getting them self sufficient.
• 16:13
  Yeah, I think that's an interesting one.
• 16:15
  I think with remove the friction that's very much in the first two phases there like getting them on board, recruited but then also trained, certified, et cetera.
• 16:23
  But then indeed then the interesting part comes where we see a lot of partners dropping off where you need to go into the continuous cycle of generating business together.
• 16:32
  And I think we've already touched upon it a little bit in previous podcast but it might be nice to go there again.
• 16:38
  Like what can you do to help your partners go from channel push so where they always have to start talking about your brand or your product to the end-user more to an end-user pool where you enable your partners actually to generate demand and to get into that continuous cycle of revenue generation.
• 16:56
  In my mind you break out the responsibilities into two separate teams or people.
• 17:02
  So some parts of your channel team are designed to generate channel push, right?
• 17:06
  That's engaging your partners.
• 17:08
  That's your salespeople maybe they're doing call out days.
• 17:12
  You're trying to drive a sales strategy either to recruit new end-users or drive upsell cross sell into existing end-users within the partners.
• 17:22
  And so you build a content and a sales strategy around channel push.
• 17:26
  That however is not the optimum way to go to market because it requires the partner to do a lot of heavy lifting.
• 17:33
  Now if the product is very easy to sell and they make a lot of margin partners that will be prepared to do that.
• 17:40
  However, the best way to do it is to generate end-user pull.
• 17:44
  If your brand garners attention and endusers specifically ask for your brand four out of five times partners will sell that brand.
• 17:52
  So if you've got lots of end-users asking for Microsoft Office three, six, five, guess what gets sold?
• 17:57
  The majority of the time microsoft Office three, six five and so Microsoft have done a great job generating significant demand and they do that two ways.
• 18:06
  They do that a brand awareness directly to the end-user but they also enable their partners from a marketing perspective to cascade messaging to their endusers which then in turn generates inbound demand making sales reps life easy.
• 18:20
  Yeah and that's what every sales rep wants eventually.
• 18:22
  And I think indeed from that perspective if you help your partners on that marketing side and that enablement side and you really help them to drive your content to their endusers, to their website, to social selling and we recently did a social selling podcast as well.
• 18:37
  I think indeed the better you enable your partners in that way but also definitely with what you just said where you help to translate the content to verticalize the content and really make it easy for your partners to participate there.
• 18:49
  That's where you will really get into that continuous driver of end-user demand generation together with them and as soon as a partner starts to experience that end-user pool that's where you really grab their attention.
• 19:01
  Yeah.
• 19:01
  For me I can almost tell you how successful vendors are going to be at continually driving engagement.
• 19:08
  I go and pull the sales team within partner and say what do you think of X brand?
• 19:12
  And they might say yeah fantastic.
• 19:13
  But then if I go and have the conversation with marketing and say what do you think of X brand?
• 19:16
  They go I've never spoken to them.
• 19:18
  I can tell you at some point it's just going to die.
• 19:21
  Because at some point the level of channel push is going to become too great and they need end-user pull because end-users requesting your brand just keep the revenue ticking over.
• 19:33
  And also it drives a level of engagement from a salespeople that channel push just doesn't.
• 19:38
  Because if I manage 100 end-users I'm an account manager and 40 of my end-users come and ask me for a particular brand.
• 19:45
  Well guess what, when I speak to the other 60 I'm more likely to position that brand because I know end-users like the product.
• 19:51
  And you're also protecting your business from employee turnover at your partners because usually when new people are getting in then maybe the one that was always pushing your brand is gone.
• 20:03
  But if the end-user asks the questions and if they do the pool then no matter what it's exactly as what you said like Parkins hardly ever switch sell.
• 20:11
  That when they get a request for brand X that they go for brand Y.
• 20:15
  And I think that's where it becomes so interesting because you get the best of both worlds.
• 20:19
  You help generate more demand but you also get more embedded in the business from the market.
• 20:24
  So to say, yeah, don't forget you don't need to make a product very profitable and very easy to sell, you only need to hit one of those very effectively.
• 20:34
  If a product is difficult to sell, but you make loads of money selling it, some salespeople are willing to put the effort in because they want to get the reward.
• 20:42
  But if a product is really easy to sell, ie.
• 20:44
  There's a lot of inbound demand channel partners are less fussed about making high, high margin because the turnover is so easy.
• 20:51
  And so to drive the most optimum channel, you obviously want to help partners make money and it be very easy to sell.
• 20:58
  But if you want to get one of them right, make it very easy to sell by generating significant amounts of inbound demand.
• 21:04
  Yeah, and I think you've seen that right when you were at Zoom.
• 21:07
  Like, as soon as such a thing starts to happen, then all the parkins start asking for you and want to get in contact with you and you completely turn around like there's no channel congestion at the parking side, but you created the other way around if your end-user pool is very high.
• 21:21
  Yeah, obviously I was at Zoom through COVID I think the sort of biggest tailwind anyone's ever experienced and we literally had operational challenges, processing that many orders, recruiting and enabling that many partners.
• 21:33
  We were driving hyperscales on hyperscales.
• 21:35
  It was crazy, but it just woke me up to the fact, hopefully not with a global pandemic, but if you can generate significant levels of inbound demand, you just have to do the bare minimum within the rest of your channel to be wildly successful, right?
• 21:50
  Just be run a channel with integrity, recruit and enable effectively and you're going to deliver outsize rewards.
• 21:58
  Whereas you see other people spend hours and hours doing, training and enablement and they're working really, really hard and generating almost no impact because they're running a bit of an old school channel philosophy and they haven't woken up to the fact that channel congestion is here and it's here to stay.
• 22:13
  And in fact, it's going to get worse over the next three to five years as more and more businesses decide to back channel and partnerships as the way to go to market.
• 22:22
  And so in that place, you have to do the thing that's different, you have to focus on not your brand, but the partners success and it really.
• 22:31
  Solves a lot more of your other engagement and attention issues as well.
• 22:35
  I spoke to quite some cybersecurity brands recently and they, for example, don't have any engagement issues at all.
• 22:42
  But it's because there's so much end-user pool for their brand and it triggers a lot of the other engagement and attention actually, because they see so much end-user pool that partners are doing all the other things that they really would like their partners to do.
• 22:56
  So more deal registration, more training, more marketing participation, and that's, of course, exactly within your partner program, the type of behavior you want to see in terms of engagement.
• 23:07
  But for them it's the other way around so they don't have to ask their partners continuously to do so, but because they see there's a lot of end-user pool, new partners are coming in, but also the attention and engagement is good because they actually drive it with the end-user pool that they have in the market.
• 23:23
  Yes, and the best thing about end-user pool is it will be rewarded with channel push.
• 23:28
  Right, but channel push doesn't generate end-user pool.
• 23:31
  If you've got a partner who's doing a really really good job in this end-user, it doesn't mean another end-user is now going to ask for that brand.
• 23:39
  However, the reverse is true.
• 23:41
  If loads of end-users are asking for a particular brand into a partner, that partner is more likely to position that brand into new endusers.
• 23:49
  And so I'm forever speaking to partners who are saying we are not good enough at doing marketing or we don't have enough marketing resource.
• 23:57
  The brands that in my opinion that back marketing, automation, marketing support and really remove the friction to generate inbound demand are going to get the outsized returns in the competition and outsized returns in a competitive market are the returns you need.
• 24:13
  Yeah, that's what we're all looking for, of course.
• 24:16
  And I think indeed, maybe to summarize today's episode, if you really want to make sure that your channel is future proof with more and more vendors entering the landscape and make sure that you are not part of channel.
• 24:27
  Congestion.
• 24:27
  You have to be hyper focused on where is the attention of my partners and how can I make it as easy as possible for them?
• 24:35
  Remove the friction to actually interact with us and cooperate.
• 24:39
  But the real deal is really how can we make our brand shift from channel push to enduser pool?
• 24:45
  Because that really sets everything else in motion.
• 24:47
  All the engagement you need.
• 24:48
  And I really like the one you just said, that it actually triggers channel push.
• 24:52
  Because they will see the brand more and more us.
• 24:55
  They see that it's easy to sell, so they will start talking about it more and more as well.
• 25:00
  And I think that's actually a great way to end today's episode.
• 25:04
  So.
• 25:04
  Thanks, Alex.
• 25:05
  Again, thank you to our listeners and see you next week.