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007 - Why Partnerships fail - 4 common problems and how to fix them · 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 of Channext.
• 0:18
  I'm here together with our VP partners, Alex withford.
• 0:23
  Alex, how are you doing today?
• 0:24
  Yeah, really well, Rick.
• 0:25
  Excited to be back.
• 0:26
  Yeah, I fully agree.
• 0:28
  I think a very interesting topic we're going to touch upon today.
• 0:32
  Yeah.
• 0:32
  Failure.
• 0:33
  I think that's always an interesting thing to explore.
• 0:35
  So why partnerships fail?
• 0:36
  I think that's a good thing to dive into and I think we've got a few key topics that we can talk through.
• 0:41
  I think in the last couple of episodes we went quite deep into like how do you build a channel, how do you scale a channel?
• 0:48
  But there's also the other side of the medallion.
• 0:51
  Why is it that 80% of partnerships are failing?
• 0:54
  Are not generating revenue?
• 0:56
  And I think that's what we're going to look at today.
• 0:59
  Like what red flags do you need to make sure you see upfront before you invest a lot of time in scaling your partnerships because you first need to fix your first partnership before you can actually start scaling it.
• 1:16
  So yeah, really looking forward to today's episode.
• 1:20
  Yeah.
• 1:20
  Analyzing failure I think is always an interesting one because it's typically easier to fix failing moments and pivot onwards than it is to redefine and rebuild strategy.
• 1:32
  So sometimes the quickest way to achieve success isn't to rip up the plan, start again and try and build from the foundations up, but actually make minor changes in your existing strategy and that can exponentially improve performance.
• 1:46
  Yeah, I think maybe an interesting topic to start with is getting the right partners into your program.
• 1:52
  So to say maybe can you tell us a little bit more about like what do you see there, especially going wrong?
• 1:58
  A lot of the times I think that's interesting to look at.
• 2:02
  The number one mistake I see in channel organizations today is they are all recruiting the same partner.
• 2:11
  They all tell me that their most valuable partners are X, Y and Z.
• 2:15
  And when I go and speak to those partners, they absolutely don't say that their most valuable vendors are in that list.
• 2:22
  Because if you go and speak to a large facilitation IT reseller who has mass coverage.
• 2:28
  Yes, they're bound to do a really strong amount of revenue because they have huge coverage, but they are facilitating inbound demand.
• 2:35
  So it's really important when you build a strategy that if you want that facilitation partner, which you should, if you've got a facilitation product that you deal with them in a facilitation manner right.
• 2:46
  You give them the level of support that they need to be able to easily drive your product.
• 2:51
  But then if you are just basing your strategy around those types of partners, you have to do an extreme amount of work to generate end-user demand because those partners will just sell what is asked of them and they'll do a fantastic job.
• 3:03
  There's a huge amount of value in that proposition.
• 3:07
  However, sometimes and very often I see partners really try and work with these specialized facilitation resellers and then they go, oh, they're not generating new deals for us.
• 3:20
  Yeah, obviously that's not where their value lies, right?
• 3:23
  Their value is having broad reach and driving sales.
• 3:27
  It's the same as, I don't know, Amazon, right?
• 3:29
  Amazon doesn't generate deals.
• 3:32
  What they do is they're a marketplace where inbound demand easily finds product.
• 3:36
  And so you've got to break down your recruitment strategy in a way that's going to facilitate the type of business that you need.
• 3:44
  I think it's crucial to really have a very good view of what type of partners do we need to scale our revenue there.
• 3:51
  So do you want partners who are going to help you get in new customers or do you want partners who are going to help you provide value as soon as it's sold?
• 3:58
  So maybe more implementation partners or consultants.
• 4:01
  And if you know that you want to work with partners to actually drive new revenue but you recruit a lot of consultants, then it's like up to failure even before you even started.
• 4:11
  Exactly.
• 4:11
  Right.
• 4:12
  If you want someone who's going to prioritize your product and position it in a unique way and really drive a proactive sale into end-users, facilitation partners aren't the best way to do that.
• 4:26
  And so, even though they might have a very significant revenue stack for you because you're getting inbound demand, which is brilliant, but understand that that's what's happening, they are not being proactive.
• 4:38
  And so, if you need to supplement those sales by you need to supplement the sales in two ways.
• 4:43
  You either increase the amount of end-user demand and you can do that via marketing, right?
• 4:48
  And you can do that via demand generation or do that via end-user sales teams, or you need to increase the push from resellers into end-users.
• 4:56
  And if you choose the second option, recruit partners who will do that well.
• 5:02
  Yes, and I think looking at that, what kind of partners would you be looking at?
• 5:07
  If you would have to start at the beginning, what type of partners do you need?
• 5:12
  Sure.
• 5:13
  First, if you want people who are going to be proactive, hire specialist resellers, right, or recruit specialist resellers, not recruit the mass market.
• 5:22
  So there's always that difference between if you're attacking a market or defending a market.
• 5:27
  Those big resellers are defending markets, right?
• 5:30
  And so they're looking at how do we grow margin, how do we grow reach, how do we grow penetration?
• 5:35
  They're not necessarily looking at particular vendors and going, this is the next vendor that we can attack with.
• 5:40
  Whereas if you're looking at a smaller reseller and they're going look, we're looking for the next big product.
• 5:45
  Are you that product?
• 5:45
  Great.
• 5:47
  Now we can build a cohesive plan together and really drive penetration.
• 5:51
  I think what I also see a lot in the market and what I hear especially from a lot of SaaS founders is immediately they look at the large GSIs.
• 5:58
  So the global system integrators Accenture, Deloitte, PWC, etc.
• 6:03
  But it's so hard to get their attention properly.
• 6:06
  So if you are still like entering the market or building your channel, so to say, then that's a really hard approach because they first want to see the proof that there is a lot of end-user demand before they will put their resources there and they will start helping you.
• 6:20
  And I think from that perspective it's so crucial.
• 6:22
  You can better start a bit more niche with a bit like boutique partnerships who are very focused on a specific vertical.
• 6:29
  And from there prove that it's working, prove that there's a good amount of revenue and a good amount of business to be made for partners.
• 6:36
  And then you can start scaling towards the larger partners.
• 6:40
  Absolutely.
• 6:41
  Recruiting GSIs makes a huge amount of sense.
• 6:44
  They have access to basically all large enterprise end-users.
• 6:48
  And so, a Deloitte will have access or an Accenture will have access to manufacturing, healthcare, finance, right across a broad spectrum.
• 6:58
  Brilliant.
• 6:58
  However, you are then in a competition with all the other vendors who are thinking exactly the same thing.
• 7:04
  And so you've got to prove to them that it's easier to sell, that they are going to make more money, that there is lots of demand, that you know who your ICP is having all of that built and very easily defined.
• 7:15
  For new SaaS vendors entering the partnership space or ones that are really in the infancy of that journey, you will lose because you just don't have the competitive edge that vendors who have been doing this for ten years have.
• 7:30
  Unless you've got a real new product, define a real new product strategy.
• 7:36
  You've invented the next great technology.
• 7:38
  But I'll be honest, most vendors haven't done that and they need to win on better sales and marketing strategies.
• 7:45
  Yes, and I think also one of the topics we touched upon in one of the last episodes was making sure that you are very clear who is my ICP?
• 7:54
  Like, who's my ideal customer profile for our company?
• 7:57
  What type of customers do we want to sell to?
• 7:59
  Is it banks, is it manufacturers, etc?
• 8:02
  And then find the right partners who are actually focused on those verticals.
• 8:06
  Because if those partners are not focused on those type of verticals, you are 100% sure that they won't attract those type of customers for you.
• 8:14
  And if that's something you need to give a lot of thought of when you start thinking about like, okay, what does my ideal partner profile look like, what is the market I want to enter, what type of geographies, so find them in the right areas and then indeed what type of partners.
• 8:29
  So the size.
• 8:30
  So do I start with a bit more, smaller partners or larger partners?
• 8:33
  And that combination says a lot about your ideal partner profile that can really help you to enter the market in the right way.
• 8:40
  Absolutely.
• 8:41
  That balance there between a large facilitation partner that's going to give you breadth for any inbound demand, but then having specialized resellers who are going to drive focus, that's a good balance to try and straddle.
• 8:53
  Now, what I find is most people get that balance horrendously wrong.
• 8:56
  They focus on, I'm going to go and recruit the largest five It partners in each major territory and then I'll have great facilitation, brilliant strategy.
• 9:05
  If you've got a very popular end-user product, great.
• 9:08
  Works, fantastically.
• 9:10
  If you don't, you're really going to struggle.
• 9:13
  And this is one of the few instances you're going to hear me say sometimes it's better to recruit more partners, but in a very deliberate fashion.
• 9:21
  Right?
• 9:22
  So it's better to go and find a focused reseller who focuses on finance and then go and find a focused reseller that focuses on healthcare than go and try and land the one reseller who does everything well.
• 9:34
  Because you then get into a dog fight with every other vendor and you've got to prove that your offering is easier to sell and they're going to make more money and there's more demand that, unless you're very, very confident that you can win in those three categories, I would stray away from doing that.
• 9:50
  I think you're touching upon something very interesting there.
• 9:53
  Like, if we would have a look at your ideal partner profile from the perspective either you have a brand that has a very high end-user awareness or you have a brand that has a very low end-user awareness, where would you start?
• 10:07
  Could you give an example for both of them?
• 10:09
  What would your approach be?
• 10:11
  Sure, let me take a very well-known product.
• 10:14
  So if I look at Logitech and their mice and keyboards, they are in very high demand.
• 10:20
  The reason they're in very high demand is they are famous at a consumer level.
• 10:23
  So if my mum went and bought a keyboard, she'd probably go and buy a Logitech one because it's in the shops that she would go to.
• 10:31
  They are also widely available on Amazon, so they've got a very entrenched end-user brand.
• 10:36
  A company like that for that type of easy sales process wants to focus on broad line coverage, mass market facilitation and so there I'd be making sure, hey, I'm going to go and speak to every major It partner because the inbound demand is going to be extraordinary.
• 10:54
  So that's great.
• 10:56
  However, if I've got a very specialist product, a high value projector, let's say they do something very, very creative in the art space, right?
• 11:06
  So they go and do installations in museums.
• 11:09
  The exact opposite partner is what you need.
• 11:12
  I need someone who isn't going because no one's asking for that product, right?
• 11:18
  Even the art galleries and museums aren't asking for that product.
• 11:21
  They are going to the AV-reseller who specializes in that area and saying I have this problem, what do you recommend?
• 11:29
  And you see, then suddenly the sales process is massively different.
• 11:33
  They're going to come and do a site survey, they're going to go and look at all the conflicts, they're going to build a design, present the design and then the gallery will sign off.
• 11:41
  They might even do a proof of concept demo to make sure it works.
• 11:44
  That's a much longer sales process and much more high value sales process.
• 11:48
  So those deals are lumpier.
• 11:50
  You want to make sure when that AV partner says cool, I'm going to present an offering, that they're going to present your offering.
• 11:58
  Right?
• 11:58
  And so understanding those two different markets is very, very different.
• 12:02
  And far too often I see people focusing purely on facilitation and then wondering why the channel isn't bringing them leads.
• 12:10
  And I'm sat there going because you haven't brought a channel that brings you leads, you've brought a channel that facilitates your deals.
• 12:17
  It's something I hear from senior sales leaders globally all the time.
• 12:21
  Yeah, our channel doesn't do enough.
• 12:22
  And I sit there and go, what's the expectation you've given your channel?
• 12:26
  Well, that they should bring us leads and how are they meant to do that?
• 12:29
  And they can't tell me the answer.
• 12:30
  Well, if you can't tell me the answer, your channel can't either.
• 12:33
  Yeah, that's really good.
• 12:35
  So I think to summarize, if you have a brand that has very high end-user awareness, then it may work very well for you to aim at the highest or the most successful partners there, like the best list, the insights, the Dustins or the GSIs, Deloitte, Accenture, etc.
• 12:51
  For because they know that there is demand, you can prove it to them and then you have their skill of their end-user base and their resources that they can actually implement your products as well.
• 13:02
  But if you have more of a specialized product with a bit less end-users awareness, they can probably better focus on the smaller partners, the more boutique partners that are very focused on specific verticals, on specific areas where you can actually build a relationship with them more properly because they are a lot smaller.
• 13:20
  And from there on really scale that with more and more partners.
• 13:24
  Absolutely.
• 13:24
  And having a very precise model where you test something small, prove that it works and then expand, right?
• 13:33
  None of this is set in stone.
• 13:35
  The right way to do it and all of this is experimentation and then iteration, right?
• 13:40
  So if you think, oh actually you reeled off a whole bunch of partners there if you think are Bechtle is the right way to grow this, which they very well may be try it, but then don't recruit Insight and Softcat and CDW and Dustin and Atea.
• 13:54
  Don't do it all in one go.
• 13:55
  Go and test it once in one territory.
• 13:57
  And if it works there by and large, relatively, if you go and recruit the other types of partnerships in other geographies that do the same thing, then it will work.
• 14:07
  Yeah, I fully agree there like build the case with one and from there on prove it and make sure you can do it with more other partners.
• 14:15
  Yeah, really good.
• 14:17
  And I think another failure that I see a lot or a failure, it sounds so hard but another thing that I see happening a lot, which can lead to partnerships failing eventually is entering a partnership with the wrong intention.
• 14:31
  Like if you enter a partnership where it's like you come to a partner like what can you do for me?
• 14:36
  Where you immediately start thinking about hey, do you have any leads for me?
• 14:39
  Can I look into your customer base?
• 14:41
  What's the type of customers would fit with our product?
• 14:44
  Then you already start with a taking mindset instead of a giving mindset.
• 14:49
  And I think one of the books I always recommend to people, I read it at a young age because my father had it at home.
• 14:55
  It's The Go Giver.
• 14:55
  Really good book.
• 14:58
  It's completely what channel is all about in my opinion.
• 15:01
  It's like how you need to give first before you can receive and if you approach new partnerships with that mindset.
• 15:08
  So how can I help you to get new customers?
• 15:10
  Maybe I have some leads for the partner.
• 15:13
  Can I help or enable you to actually go to market together so we can create a joint-value proposition?
• 15:19
  you give first in such a partnership, you build a relationship and from there on you'll earn the trust so you can eventually receive again.
• 15:27
  And I think that's crucial.
• 15:28
  When you enter partnership it needs to be with the right intention always.
• 15:32
  Otherwise it's set up for failure immediately.
• 15:35
  Yeah.
• 15:35
  And I actually think the landscape is changing more and more to that model that you're talking about or the expectation is changing more and more.
• 15:43
  We see it internally within businesses now.
• 15:45
  I think businesses are suddenly going, hang on a second, I'm hiring young employees and they want pay rises and promotions and they want a purpose and they want a development plan.
• 15:55
  20 years ago they didn't want this.
• 15:57
  People stayed at the same business for life.
• 15:58
  And now that expectation has shifted.
• 16:00
  That expectation to it being a far more two way thing is happening with employees.
• 16:05
  But the same thing is happening within partnerships where people are having a much more, hang on, I understand you might be the big bad vendor, but actually we have a lot of choice to sell now that we didn't have 30 years ago.
• 16:16
  20 years ago there was two or three key players in every key technology stack.
• 16:22
  Now there's hundreds.
• 16:24
  I can sell this product or I can sell this product.
• 16:26
  You both do a broadly similar thing.
• 16:29
  So I'm going to make choices based on our decision making, our partnership capability.
• 16:34
  And so that mindset that I'll be honest, I've seen is very prevalent.
• 16:39
  I can remember one time, and I will leave his name out of it, which he'll be very thankful, given this story.
• 16:45
  He was hired as the new EMEA Channel director for a large channel business.
• 16:52
  And he basically called a meeting with all the top partners in the UK, one by one, and he went, you're not doing enough business for me.
• 16:58
  You need to bring me more leads or we will churn you out.
• 17:02
  And almost unanimously those partners went, seeya, we're not working with you because actually we're very easily able to switch over your product.
• 17:10
  He didn't understand that because he came from a different technology sector where I think he'd come from a more ubiquitous, I understand it's my business.
• 17:17
  And he moved to this sector and he wasn't there three months later.
• 17:20
  Right.
• 17:20
  Because the channel business, the channel basically decided, hang on, you're coming in with this attitude that we work for you?
• 17:28
  No, we don't.
• 17:28
  We work together.
• 17:29
  And that's the whole ideal.
• 17:31
  I think that's a really good way to state it, like we work together.
• 17:34
  Indeed.
• 17:34
  And I think if you look at what happened in the channel the last couple of years or the last two decades, it became more and more democratized, more and more vendors started entering the market.
• 17:44
  There's a lot more competition.
• 17:45
  Partners have more choice.
• 17:45
  Indeed.
• 17:47
  And in that way, the partners really can choose, who do I want to work with?
• 17:51
  And that's the mindset you should always have.
• 17:53
  I need to be so fun to work with, easy to work with, but also make sure that we are successful together, that partners want to work with me.
• 18:00
  Because you can't make partners work with you anymore on your terms.
• 18:05
  You need to do it on a combined terms.
• 18:08
  Absolutely.
• 18:10
  One of the things that I see not very often, but it's really important that people understand this.
• 18:18
  You might catch lightning in a bottle and you might have a technological edge and you might have a product that no one else yet has and it creates an insane amount of demand.
• 18:26
  This does happen.
• 18:28
  Don't piss off your channel because you have the edge.
• 18:31
  Because what happens is when everyone else is catch up, the channel remembers and then they pivot away from you.
• 18:37
  And it's amazing how I've seen businesses rapidly accelerate over a two, three year period.
• 18:42
  And because they've got the only brand that works in this particular area, they think, we're going to screw over the channel.
• 18:48
  Oh, the channel's no good, we're going to keep margin really tight, we're really not going to work on a sort of collaborative mentality.
• 18:55
  And then the second every other vendor catches up, they go, oh, our channel stopped selling our products.
• 19:01
  That's weird.
• 19:01
  And go, yeah, because they didn't enjoy working with you.
• 19:04
  And so make hay while the sun is shining.
• 19:04
  Right.
• 19:06
  If you've got that technological edge, build in and grab your partners around you because they will be loyal for such a long time.
• 19:15
  And don't forget, they're going to speak to your end-users much more often than you are because they don't view them as your end-users, they view them as their end-users.
• 19:25
  And that's a really important dynamic to understand.
• 19:27
  They are speaking to those end-users, not just about your product.
• 19:31
  They might be attachment products, they might be products in different technology stacks, but they have that relationship.
• 19:37
  And so they can very much control deal flow and give advice and they're trusted.
• 19:42
  And you want them to continue saying that your product is the best or best fit or really is a wonderful thing and you need to work together to retain that product.
• 19:51
  You want to keep those on site.
• 19:53
  Yeah, I fully agree there.
• 19:55
  I was just thinking maybe for listeners, like, if somebody is thinking right now, I want to show my partners that I have good intentions.
• 20:04
  At the start of a partnership, could you maybe give three tips or examples where I would say, these are the type of things you can do towards a partner to show them immediately that you have the right intentions and to build trust with them?
• 20:17
  My key tip, we'll give a couple but my key tip, if you want to build a relationship with a partner, ask questions.
• 20:26
  So often I see channel account managers and channel leaders go, this is our strategy.
• 20:31
  When was the last time you asked a partner what their strategy was?
• 20:34
  How do you fit into their go to market?
• 20:36
  What is their three year plan?
• 20:37
  What is their five year plan?
• 20:38
  Who are their ideal customers?
• 20:41
  Once you start from that framework, build your plan into theirs, not the other way around.
• 20:47
  That's how every partnership starts.
• 20:49
  And so often I see vendors just forget that and they just take the blueprint that they have and they drive it into all of their partners and they hope it sticks.
• 20:58
  That is an incredibly stupid way of doing it.
• 21:01
  Start the other way around.
• 21:02
  Understand how you fit into the partner and build from there first.
• 21:07
  Love it, I think.
• 21:08
  Nothing to add there.
• 21:09
  Indeed, if you start asking questions, the rest will work out.
• 21:12
  You get to know them better.
• 21:13
  You are building the relationship and from there on you are really working towards a mutual plan where you go to market together.
• 21:20
  Yeah.
• 21:20
  Intrinsically sales is about asking questions and somehow channel sales and partnership sales doesn't start there for a lot of people, which in my mind is insane.
• 21:31
  Right.
• 21:31
  You start if you're going to close an end-user.
• 21:34
  Can you tell me about your technology today?
• 21:36
  What are your challenges?
• 21:37
  Where are you going. Yet we don't ask those questions in the channel.
• 21:40
  It's insane to me.
• 21:40
  Start.
• 21:43
  It's a sales process, right?
• 21:44
  We want to understand how this partnership can work together for the both of us.
• 21:48
  And the only way for me to understand that is to understand you love it.
• 21:55
  I think that once indeed you found your ideal partner, you have a good view of what your ideal partner profile is.
• 22:02
  You show that you have the right intentions and then it all comes down to the thing you really love setting goals, making a plan, etc.
• 22:09
  But I think that's the thing that we both see a lot where things go sideways is misalignment.
• 22:15
  Could you maybe take us along a little bit in that specific type?
• 22:20
  Like what type of misalignment do we see in the channel and why does that have a negative effect on the success of a partnerships?
• 22:27
  The number one misalignment problem that I see within the channel is partners are recruited to churn existing end-users which they are not interested in.
• 22:38
  So for example, if a partner has 20 existing customers and they are all selling this same product, a competitive vendor will come to that partner and go brilliant, we want to work together, we want to grow your business, we want to grow ours.
• 22:52
  They'll save their plan, they'll save their blueprint.
• 22:54
  What they actually mean is any chance you can churn out those existing contracts and introduce us instead? And the partners, unless the partner has a really good reason they don't believe in the existing product, they're going to make more money.
• 23:06
  Which then there's not a misalignment.
• 23:08
  But that almost never is the case because they've done a good job with those end-users, they have a good relationship with that vendor and they're not going to switch sell existing business.
• 23:18
  They want to grow their book of revenue as well.
• 23:21
  And that means that new acquisition or partnerships, how do we get into new customers together?
• 23:26
  And that is the biggest misalignment problem because it's almost coming from a place of lying, right?
• 23:32
  Which is the only value I see in you is your existing customers because that would be really quick.
• 23:38
  Well, that's not a partnership that's built for the long term.
• 23:40
  It's how are we going to win within the first quarter but also in the next twelve quarters, right.
• 23:46
  How are we going to win over a long period of time?
• 23:48
  And we do that by building a proper sale strategy.
• 23:52
  Where would you start with creating that plan?
• 23:54
  So how do you, I think actually found like that we actually ended the last topic, I think with exactly what's super important for the misalignment piece.
• 24:03
  Ask questions.
• 24:04
  If you ask questions to the partners, you get to know what their plans and goals actually is and then you can start aligning that with your own plans and goals where you really get to a mutual agreement and a mutual plan to actually work toward success together.
• 24:19
  Yeah.
• 24:20
  And to be clear, right, I've significantly overachieved some quarters based on a switch-sell philosophy where I saw something happening in the market where maybe a vendor wasn't treating partners particularly well or their product wasn't going down very well at end-users.
• 24:36
  And so I called all of their tier one partners and I said, hey, quick question.
• 24:40
  How is it going with X vendor?
• 24:43
  And some of them said, yeah, brilliantly.
• 24:43
  Perfect.
• 24:45
  Don't need to speak to you.
• 24:45
  And some of them said, no, it's terrible.
• 24:47
  And it was like, brilliant.
• 24:49
  Would you like to discuss how we could work on a switch-sell program so that you're protecting your base of end-users?
• 24:55
  Notice how I didn't say, so I can make money.
• 24:57
  It's so you can protect your base of end-users.
• 25:00
  I'm coming from the position of how do I protect your business?
• 25:05
  That's a much better proposition.
• 25:07
  And we just need to take the arrogance out of partnerships, right?
• 25:11
  Because that's not what partnerships are about, is how do we both win together?
• 25:15
  And another thing I notice is you started with a question.
• 25:18
  I think that's the big difference.
• 25:19
  Usually we approach partners, hey, I see you're working with this vendor.
• 25:22
  We have a product that's much better.
• 25:24
  This is the advantages of switching.
• 25:26
  And immediately it's all about yourself.
• 25:28
  But if you turn it around and you start asking, how are you experiencing this currently?
• 25:32
  And from there on, you start building in the other things that you want to say through your questions, that's a much better way to start because indeed, there is a big advantage within channel.
• 25:43
  They have an existing customer base that's probably working with one of your competitors at the moment.
• 25:51
  So it's an excellent way to get in there because they do want such a product.
• 25:55
  They do want such a solution.
• 25:56
  But it's like, from what angle do you start that's super crucial together with your partners?
• 26:02
  Yeah.
• 26:03
  You need to treat your channel meeting like a first date.
• 26:07
  You don't run in and go, this is what I do.
• 26:08
  This is who I am.
• 26:08
  Look how great I am.
• 26:11
  No, we find out if we are a good fit for each other, right?
• 26:13
  And you do that by asking questions.
• 26:15
  And too often I see people say, Hang on, we've seen this blueprint work with 400 partners globally.
• 26:20
  So you need to be 401.
• 26:22
  It's not a very good way of doing it.
• 26:24
  And by the way, it's not working with 400 partners globally because market averages will tell you 80% of partners will churn within the first two years.
• 26:31
  And that's because of that misalignment.
• 26:33
  And when we talk about the cost of that misalignment, it's significant.
• 26:38
  Right.
• 26:38
  Not only is there a drop off in revenue, but the operational lag of onboarding recruiting and enabling partners and then churning out is significant.
• 26:47
  Having the proper plan and strategy means you can recruit less partners, deliver more value with less partners, which means you don't need to hire as many channel account managers.
• 26:56
  You can then deliver more value through those partners to recruit end-users and cross-sell more effectively.
• 27:01
  So the profit per channel account manager drives up significantly, meaning that if you want to recruit more channel account managers, you're going to drive a much more significant breadth play.
• 27:13
  And that's the sort of level of coordination that to be blunt, most channel leaders I think, are failing at and can do a far better job of being far more focused on not 80/20, this is how the world works.
• 27:25
  No, it doesn't need to work like that.
• 27:27
  If you're far more deliberate, you can flatten that curve and deliver much more success and penetration.
• 27:32
  Yeah, and that's flattening the curve is so crucial because we are so dependent on those top partners.
• 27:38
  What if a couple of your top partners would all of a sudden decide, hey, there's a lot more traction with that other vendor, I'm going to switch.
• 27:44
  Then you would have a massive problem.
• 27:46
  Your revenue would take a massive hit.
• 27:48
  Or if you have more breath or more width among the channel and more spread there, then you have a lot more revenue security as well.
• 27:58
  Yeah, I've seen it time and time again.
• 28:01
  I hate working with this vendor, but my end-user keeps asking me for it.
• 28:06
  Okay, what happens when the end-user stops asking and it does happen consistently.
• 28:11
  There's always a rapid acceleration stage for most good product.
• 28:17
  And then once the market catches up, or once the end-user shifts focus, or once market saturation's happened, if those partners don't like working with you, they will stop positioning you the second the end-users stop asking for it.
• 28:30
  Which again, that's why we see we see enterprise vendors being acquired by other enterprise vendors because they've hit that acceleration, they've grown their value and suddenly it starts to taper off.
• 28:40
  Suddenly the market's not very happy with them and then hang on, they start to really jump off the edge of a cliff.
• 28:46
  So building that partnership is not just crucial for the short term, it's how you drive long term sustainability.
• 28:53
  So I think we learned now that to prevent misalignment, the most important thing is to always start with asking questions and then from there and work towards a mutual plan.
• 29:02
  But what can you do once the partnerships is rolling when you're actually in the partnership to make sure you keep alignment with the partner?
• 29:11
  Like what kind of communication?
• 29:12
  Cadence or maybe meeting cadence.
• 29:14
  Like, what have you seen there in best practices?
• 29:17
  Yes.
• 29:18
  For me, there's a couple of things.
• 29:19
  Keep asking questions, obviously.
• 29:21
  Number one, how do you feel this relationship is going?
• 29:23
  How do you feel this partnership is going?
• 29:25
  Are we where we thought we should be?
• 29:25
  Right.
• 29:27
  So setting gated goals is super important.
• 29:31
  I hate when I see a plan and I go, yeah, we're going to work.
• 29:34
  And it's like, okay, how much?
• 29:34
  I don't know.
• 29:38
  I'm just hoping they're going to do a load of deal regs, which you'll be surprised how often you hear.
• 29:42
  And it's like, well, who are the customers that you're working on?
• 29:45
  Where's the tangible plan?
• 29:46
  Where are you expecting to be after three months, six months, nine months, twelve months?
• 29:49
  Are you trending ahead?
• 29:49
  Are you trending behind?
• 29:51
  What actions are you doing?
• 29:53
  Because if you set a twelve month rolling plan and have a QBR every quarter and then you can analyze are we trending ahead or behind?
• 30:02
  And what's your gut feel?
• 30:04
  Ask the partner, how do you think we're doing?
• 30:06
  Well, actually, even though we're trending ahead, I actually think we're not doing a great job.
• 30:10
  We could be doing more if we had X resource, if we had this in MDF, we could do this.
• 30:15
  We should run this campaign, having those outcome-orientated discussions.
• 30:19
  But it has to start with how is the partnership going?
• 30:23
  And so often oh, here it's great.
• 30:26
  Numbers are up 40%.
• 30:28
  Have you asked the partner if they're happy?
• 30:30
  No.
• 30:31
  Okay, that's a risk because your number might be up 40%, but they might hate working with you and they might be looking at all of your end-users going, I think we can switch though this is to a vendor I much prefer working with.
• 30:42
  Yeah, fully agree there.
• 30:43
  And I think data also plays a crucial role in making sure that you keep aligned with your partners.
• 30:49
  Because if you only meet with them once a quarter and you only look at the revenue, you have little contact or little feeling that throughout the quarter, on a daily or weekly basis, like how engaged is the partner?
• 31:01
  How well are they participating in everything we are enrolling and not just looking at the lagging metric, which is the revenue.
• 31:09
  I think from that perspective, if you measure that on a weekly basis, like you set the plan you created for twelve months, then you finalize it to make it towards a quarterly plan, but then make sure that you know which metrics to measure and measure them on a weekly basis so you keep pulse of where that partnership is heading.
• 31:28
  Then you have so much more time within the quarter to actually make sure you are achieving the results you both want, you and your partner.
• 31:36
  Because if you don't do that, if you only look at it at the end of the quarter, it's already too late to fix it.
• 31:42
  Yes, absolutely.
• 31:43
  I think to all the channel account managers, here is the blueprint for how you run a successful relationship and build a twelve month rolling plan which has gated data so you understand here's the deal regs that we expect to do.
• 31:58
  Here's the outbound call volume.
• 31:59
  However, you send a report every two weeks to the key stakeholders of that plan so you can track whether you're trending ahead or behind.
• 32:06
  You have a small meeting once a month with just the key stakeholders and then you run a QBR with the wider group, ideally with MDs, sales directors so that everyone is bought into that sales strategy.
• 32:20
  That's critical.
• 32:22
  Do that every quarter and you will never be surprised.
• 32:25
  As long as you're asking the right questions and delivering the right cadence, structure and reporting, you will run that relationship very tightly and there will be almost no deviation.
• 32:34
  And then what's super important, you will hear the feedback, hopefully quick enough that you can pivot.
• 32:41
  So, so often I'll hear, they stopped selling anything first quarter of the year and we didn't notice until the end of the financial year because the number was behind.
• 32:48
  So you didn't notice for six months is what you're saying.
• 32:51
  Yeah, okay.
• 32:53
  You should have noticed within three weeks because you should have been asking the partner after every report that you sent, how's it going?
• 32:59
  Is that where you needed to be?
• 33:00
  Is that where we need to be?
• 33:01
  If it's not, what are we doing?
• 33:03
  And that is the structure that will make sure that channel account managers are forever in the loop and if things are going well, forever successful.
• 33:11
  Ask the questions.
• 33:13
  I think that's the thing that keeps popping back in my mind while we're talking about it.
• 33:17
  Really good.
• 33:19
  Then I think you found your ideal partner profile.
• 33:22
  You shown good intentions, you have a mutual plan, but still we see it often times happening that partnerships are not becoming a success, that still a lot of partners are dropping out.
• 33:35
  And I think one of the things I see a lot there is that there's a lack of attention from the vendor perspective towards the partners and not because vendors don't want it, but because they don't have the resources.
• 33:47
  So we always used to call it the partner engagement gap.
• 33:50
  So we are recruiting a lot of partnerships.
• 33:51
  We are getting the partners in, even if it's the right partners and we've shown good intention, there is a plan, but we simply don't have the resources to enable the partners in the right way and to make sure that we continuously improve their go-to-market, their technical capabilities, etc.
• 34:07
  And in that way we are recruiting them.
• 34:09
  But then in the onboarding phase, some partners are dropping out in the comarketing phase, some partnerships are dropping out in the co-selling phase, etc.
• 34:17
  Well, you want to get that partner towards the revenue and if you don't get them there, partners will lose attention eventually and churn out.
• 34:24
  And that's the partner engagement gap.
• 34:27
  Yeah, you're just highlighting churn cost, right?
• 34:30
  We talk a lot.
• 34:31
  It's not I didn't have enough time, it's, I didn't have the right priorities.
• 34:35
  There is always enough time if you've got the right prioritization and if you sit there and go, we need to recruit 100 partners and 80% of them churned out?
• 34:45
  Well, what if you just recruited 20 partners and you kept 100% of them because you just had the right level of focus and impact?
• 34:52
  Oh, yeah.
• 34:52
  Suddenly we would have had enough resources because we had enough resources to badly recruit 100.
• 34:58
  We had the right level of resources to actively recruit 30.
• 35:02
  So that's where your growth is.
• 35:04
  So that's why just throwing everything in the wall and hoping it sticks isn't the right way to do it.
• 35:11
  Yeah, that's the thing where I would really like to challenge channel leaders.
• 35:14
  Think about how much of your resources is going to partner recruitment versus how much of your resources is going towards partner success.
• 35:23
  And that's such a crucial thing to think about.
• 35:25
  Like if you reiterate there and make sure you shift some of those resources from partner recruitment to partner success, I am so sure that you will get that 80% partner churn to a much lower percentage where you get a lot more impact with the partners that you have, better relationships with your partners and more success together while executing that mutual plan.
• 35:48
  That's the thing that's crucial, in my opinion.
• 35:51
  Yeah.
• 35:51
  If channel leaders approached channel management in the same way high touch approach customer success, we'd have a much tighter channel.
• 36:00
  Right.
• 36:00
  High touch, customer success run, especially in enterprise accounts.
• 36:04
  What's your NPS score?
• 36:06
  Where are we against all plans?
• 36:07
  What's your gut feel?
• 36:08
  How are we tracking?
• 36:08
  Where's the data?
• 36:10
  Where's the usage?
• 36:10
  Where's all the metrics?
• 36:13
  We don't do that at partner level.
• 36:14
  It's insane.
• 36:16
  And to be clear, the channel account managers who do do that, one are rare, so hire them.
• 36:21
  But two, they are the ones that are winning consistently.
• 36:25
  My favorite buzzword, this is how Microsoft run their channel.
• 36:28
  And they do that because they're able to track their data through the portals more effectively.
• 36:32
  And so they, at a macro level, can start to track this data and then an individual level.
• 36:38
  You're always somewhat reliant on talent, but I've met some incredibly talented channel account managers and really, they could have a job in customer success.
• 36:45
  Right?
• 36:45
  Because they've got that same mentality around delivering excellence consistently.
• 36:50
  And it's a partnership.
• 36:50
  Right.
• 36:51
  That's how customer success review their relationship with the end-user.
• 36:55
  They are not a customer.
• 36:56
  We are partners, and we are working together to ensure you are receiving full ROI on our product.
• 37:03
  Why can't we receive full ROI on our partnership?
• 37:06
  It's the same principle and we need to drive it into channel better.
• 37:10
  Yeah, I fully agree there.
• 37:12
  I think if I would have to summarize, like, how do you fix the partner engagement gap?
• 37:15
  How do you fix that problem?
• 37:17
  You need high quality content.
• 37:19
  So put your resources there to make sure you have the right training enablement content, the right co-marketing content, the right co-selling materials.
• 37:26
  From there on, you want to automate the process of bringing the right content to the right partners at the right time.
• 37:33
  So make sure you can do that at scale, where every partner who's on boarded and recruited that they get delivered the right type of content with the right type of quality there.
• 37:43
  And from there on, make sure you measure everything so you see what the interaction is, which partners are engaging, which partners are not engaging because that's where you want to know where do I need to put my energy?
• 37:55
  And if you know that from your partner so where's the engagement?
• 37:58
  Where's the high engagement?
• 37:59
  So I go all in there or which partner I know is important because they fit so perfectly in my partner strategy but I see a low engagement.
• 38:08
  So that's where you want to reach out to to actually make sure that they do start engaging.
• 38:12
  I think if you work on those three things so make sure you have the right content, automate the process with software and track everything.
• 38:19
  That's how you really fix that lack of attention and the partner engagement gap.
• 38:24
  Yeah, absolutely.
• 38:25
  And I think a lot of this stuff is relatively quick to implement fixes and I think channel leaders will be very, very surprised at the massive improvement.
• 38:37
  They should see one in the cleanliness of their channel, right?
• 38:40
  And we talk about Salesforce clean up all the time at an end-user level.
• 38:45
  Same thing needs to happen at a partner level.
• 38:46
  How many of our partners are actively engaged?
• 38:49
  Like, ask yourself that as a channel leader and not just buying monthly because I hear that all the time.
• 38:54
  Or active partners they bought last quarter.
• 38:57
  No, engaged.
• 38:58
  How many are proactively selling?
• 39:00
  You can't tell me but that's because you haven't got the right data metrics and coordination in place so that you're just tracking lag measures.
• 39:07
  Problem is it's too late.
• 39:09
  If you just track the lag, you'll always be three months, six months, maybe a year out of date.
• 39:15
  Whereas your competitor down the road, if they're coordinating better than you, they will win because they will understand actually this is the partner's priorities.
• 39:23
  We said we were going to be there by week three, month three, and we're not.
• 39:27
  So what are we doing?
• 39:28
  And they're on top of it, they're being more aggressive, they're being more proactive and it's time we move on from leaving that responsibility down to individual talent and get much better, much stricter processes, technology in place to support channel account managers to do a great job.
• 39:46
  Yeah, absolutely.
• 39:47
  I think from that perspective in it if we look at that, I think we touched on four topics on now.
• 39:52
  So you need to look at your who's my ideal partner?
• 39:56
  Make sure you get the right partners in, make sure you have the right intentions from there on.
• 40:02
  Also make sure that you have a mutual plan and execute on it properly by giving the attention to the right partners and the attention that they deserve.
• 40:10
  But still there is one thing you can do if you do all those things right, that can completely blow up a partnership and that's breaking trust.
• 40:19
  I think the thing you just said, like the channel never forgets it's so true.
• 40:23
  Like everybody stays in channel forever, whether they are on the partner side, on the vendor side.
• 40:28
  That's the thing that I noticed in the years that I've been active here.
• 40:31
  Like they hop to other companies maybe, but they always stay in the IT sector in the channel.
• 40:36
  And if you break the trust once, then it might be gone forever.
• 40:40
  And I think from there maybe.
• 40:41
  Alex, do you have some examples, like from what you've seen, like what are the things you really should not do towards a partner to break the trust?
• 40:51
  I can feel some people in their seats sweating, hearing this, worrying that I'm going to call them out by name.
• 40:55
  Don't worry, I'm not.
• 40:55
  But yeah, 100%.
• 40:58
  I see breaking trust happen in two ways.
• 41:00
  One, when a vendor makes a difficult decision to, let's say, move a deal from one partner to another, or even worse, take a deal direct, two things happen.
• 41:11
  One, the partner, if they don't understand the reasoning behind it, if it's happened so that the vendor can make more money, which does happen, unfortunately, that relationship is gone.
• 41:22
  It might not be gone that day, it might not be gone that week, but that relationship will never work again.
• 41:27
  They will never proactively sell your product, not with the same level of focus that they're selling a different one.
• 41:32
  So that relationship is burnt.
• 41:34
  Second thing that happens, that channel account manager understands that their own relationship is at stake.
• 41:40
  And like you say, I would say the channel is a incestuous family.
• 41:43
  Never piss anyone off because you might be working for them or they might be working for you one day.
• 41:48
  And that channel account manager is furious at their own company because their name is on that decision.
• 41:55
  And so they will build a relationship with the partner and say, look, I'm really sorry, it was taken out of my hands, but they're annoyed at the company.
• 42:01
  So two things happen, you've annoyed your partner and you've annoyed your channel account manager.
• 42:05
  And I've seen channel account managers leave businesses at scale because of this, because they're saying I can't hit my targets because deals have been taken directly.
• 42:16
  It's not being put in my quota and I'm not putting my name on this.
• 42:20
  Like,§ I might have to work with that partner in six months'time, in a year's time, in three years time, in ten years time, when I work for a different organization.
• 42:27
  And if they hate me because they think I'm stealing their business, I'm not accepting that.
• 42:31
  And especially in we know what the market is like at the moment, right?
• 42:34
  It's unbelievably competitive to get the right talent in vendors have to do a far, far better job around protecting their own talent by making smart decisions.
• 42:44
  Yeah, I think you touched upon the number one reason indeed in general where trust is really broken, like getting it away from a partner.
• 42:53
  And there's always that thing that they are worried about when the vendors also have a direct sales team, like what's happening, do I want to share my lead, do I want to share my contact?
• 43:02
  Because I don't know where it's going and the line is so thin there.
• 43:07
  So you need to make sure that you are super transparent, like super transparent.
• 43:11
  What are you doing with it?
• 43:12
  Where can you register the deal, how is it tracked, etc.
• 43:15
  , and never give it to someone else?
• 43:15
  Like never.
• 43:18
  It's just as simple.
• 43:19
  As simple as that?
• 43:19
  Yeah.
• 43:20
  And look, I agree, right?
• 43:22
  I think in a perfect world, all businesses should be 100% channel.
• 43:26
  All deals should never move away from one partner to another or from partner to direct.
• 43:30
  Now, in a real world, it can happen and does happen.
• 43:33
  Relationships break down between the partner and the end-user and the end-user makes a formal request to switch and that might be a relationship reason, that might be a specialization reason and it can happen.
• 43:44
  But dealing with that with clarity is critical.
• 43:49
  If there has to be a difficult conversation between the partner and the end-user and the vendor have it together, right?
• 43:57
  The end-user needs to communicate via the partner to say, look, here's the reasons we want to move away.
• 44:05
  Not the vendor says, sorry, we moved a deal, right?
• 44:09
  That has to be coordinated better and it is incumbent on the channel account manager, however uncomfortable, to ensure that that conversation happens over the table.
• 44:18
  Yeah, I think maybe I need to clarify a little bit more.
• 44:21
  I think there's a big difference, I think in the world where we're living in right now, it's a utopia where we think this customer, this end-user is a property of this partner or is my end-user or something like that.
• 44:34
  We are in a free market.
• 44:36
  Everybody may go wherever they want.
• 44:38
  So I think that's crucial to remember also towards a partner, like when they get angry or they start communicating in a certain way to you, but like, hey, I used to work for that end-user, but now it's gone to that partner, now it's gone to a different vendor, etc.
• 44:51
  That's always a possibility.
• 44:52
  So you need to be open to that.
• 44:54
  You need to clearly communicate.
• 44:55
  But as soon as you start working on such an engine together, like your partner tells you I want to work on this deal, or I'm working on it, etc.
• 45:04
  Then you should be very deliberate, okay, I'm working on it with that partner and not take it direct because I can get more margin or I have more control over the sales cycle etc,, but really embrace it and do that in the right way.
• 45:16
  Yeah, you're reminded me of a story.
• 45:19
  As you know, I've got a consultancy practice on the side, and one of the things I do is help especially SaaS organizations out of the US.
• 45:26
  Desig channels for Europe and for EMEA.
• 45:30
  And I was speaking to one of the sort of senior program directors, and I was saying, yeah, you gotta be careful because end-users may choose that they want a new partner.
• 45:39
  And they're like, no, no, we don't allow that within the partner program.
• 45:41
  I was like, what you're saying is illegal in the EU.
• 45:44
  You have to be able to allow that.
• 45:46
  And suddenly I saw this white face and they're like, oh my God, I don't think our products can even do it.
• 45:51
  And so suddenly, partner programs calling tech, and they had to suddenly build this facility in because, yeah, it's absolute.
• 45:57
  One, it's legally required, but two, it's important that we put the onus at the end-user level because end-users decide to move.
• 46:06
  Right.
• 46:06
  It happens.
• 46:07
  People change companies.
• 46:08
  That's one of the classic reasons.
• 46:08
  I used to work here.
• 46:11
  Now I've worked here, I've moved my customer with me.
• 46:14
  Happens all the time.
• 46:15
  And so we need to understand that that is an end-user decision and it's the only way to make that painful break acceptable.
• 46:24
  Yeah, absolutely.
• 46:25
  There, I think to touch upon that one more time from that perspective.
• 46:32
  Completely lost where I was going.
• 46:34
  Cut.
• 46:37
  Yeah, I think that was what I wanted to do.
• 46:40
  Where did you end with your loss?
• 46:43
  Changed the technology and implemented the change and we're good to go.
• 46:47
  Okay, perfect.
• 46:47
  Yeah.
• 46:49
  Okay.
• 46:50
  So I think indeed, to summarize, we've touched upon why do partnerships fail?
• 46:56
  So we touched upon the reasons why those partnerships fail, but I think we also touch very precisely and practically on how do you prevent them from failing.
• 47:04
  So, to summarize there, make sure you recruit the ideal partner, come with the right intentions, have a mutual success plan, execute on it properly and give it the right attention by actually putting your resources to partner success and make sure you never break the trust.
• 47:21
  Do those five things and your partnerships will become successful, I think.
• 47:26
  Thank you for today, Alex.
• 47:27
  I really enjoyed it again.
• 47:28
  And also our listeners, if you've you enjoyed it, share it with your colleagues on social media, send us a DM or anything like that.
• 47:35
  We'd love to hear your feedback as well.
• 47:37
  And hope to see you next week.