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062 - Cisco and Microsoft's SMB Play: Decoding the Strategy and why it Matters · Partnerships Unraveled

• 0:07
  Speaker 2: Welcome back to Parking Ships Unraveled, the podcast where we unravel the mysteries of parking ships and channel on a weekly basis.
• 0:14
  Speaker 2: My name is Rick van der Bosch and I'm the CEO and founder at Chennext, and I'm here together with Alex Wittford, vp Revenue at Chennext.
• 0:23
  Speaker 1: Still weird to hear, but yeah, thank you very much.
• 0:25
  Speaker 1: For those who haven't seen my LinkedIn, I recently got promoted to VP of Revenue at Chennext so I run our end-to-end sort of marketplace.
• 0:34
  Speaker 1: So that's partner, customer success, sales marketing and our content team, but it's an absolute pleasure and a privilege to be responsible for that.
• 0:44
  Speaker 2: Big congrats from me and the whole team here at Chennext.
• 0:47
  Speaker 2: We think you're exactly the right guy for this role and also very happy in terms of how you're already building that team.
• 0:54
  Speaker 2: I think it's also, I must say, pretty cool as a partner-driven company that now the VP partner is actually going to lead the whole revenue motion, because we know how important it is to have that really as one go-to-market motion.
• 1:06
  Speaker 1: That was a really slick segue into the podcast.
• 1:08
  Speaker 1: Yes, partnerships always first, and then the revenue motion follows.
• 1:12
  Speaker 1: Yeah, that's a nice touch, excellent mate.
• 1:16
  Speaker 2: Well, I'm actually very excited and we may not say that anymore from our production team but I'm very excited about today's topic because we're going to talk all about SMB market and SMB partners, because I think feasibly that's the hottest topic out there within all enterprise vendors we're speaking with right now.
• 1:32
  Speaker 1: Right, yeah, we spend a lot of time analysing channel markets.
• 1:37
  Speaker 1: It obviously very much helps our business to understand what our large global enterprise customers are looking at, where their priorities are.
• 1:44
  Speaker 1: It helps our product development, helps our sales strategies.
• 1:46
  Speaker 1: But it's been amazing recently we've been speaking to incredibly senior people within some of the largest channel organisations in the world and SMB, smb, smb.
• 1:55
  Speaker 1: It just keeps coming back and I think this is really now a tipping point where we have seen the fight for the CDWs and the becklers of this world.
• 2:04
  Speaker 1: That's what has been happening traditionally and the rest of the market just sorts itself out, whereas now the giants, the real market leaders, are now refocusing on SMB.
• 2:14
  Speaker 1: I heard a stat the other day that I think Cisco value their total addressable market within SMB is $25 billion, which is absolutely insane.
• 2:23
  Speaker 1: It just shows you how the investment, the focus and the strategy is going to be really driven towards SMB space.
• 2:30
  Speaker 2: Yeah, I think there's two companies that you and I keep banging on about within the channel because we think their partner programmes are so good and their whole companies actually geared around partners, which are Cisco and Microsoft, and especially those two have done so many news items lately, so many articles they published editing their partner programme and adjusting it, and SMB is everywhere at the moment, like you see it, everywhere around them.
• 2:55
  Speaker 2: Why do you think, indeed why they are shifting so much towards that focus?
• 3:00
  Speaker 1: Well, I think you have a really good stat in terms of what the valuation just agnosticly what the revenue spend is between SMB.
• 3:06
  Speaker 1: Maybe we can start there and then we can work through why that happens.
• 3:10
  Speaker 2: Yeah, absolutely.
• 3:10
  Speaker 2: I think what I see a lot is actually that the enterprise market is also getting more and more saturated.
• 3:16
  Speaker 2: I think that's where we were completely focused on, as vendors and within channels, to make sure together, indeed, with the CDWs and the Bechtles and the SoftCats and the big GSIs that we get as much a footprint within those big enterprises as possible.
• 3:30
  Speaker 2: But actually, if you look at the whole tech market, 44% of all tech spend is being spent within the SMB market and 80% within that.
• 3:41
  Speaker 2: 44% of the whole market in the SMB is partner driven.
• 3:45
  Speaker 2: So that's where you see, if you want to grow and capture even more and keep the growth rates that we've had in technology in the past, then you need to look at SMB.
• 3:52
  Speaker 2: It's the only possible reason.
• 3:54
  Speaker 1: Yeah, and I think if you talk about Microsoft and Cisco, right, no one is arguing that Microsoft and Cisco don't have an absolute stranglehold on the biggest businesses in the world.
• 4:03
  Speaker 1: They absolutely do.
• 4:04
  Speaker 1: They're also the biggest channels in the world.
• 4:06
  Speaker 1: So to me, it's the very logical conclusion.
• 4:09
  Speaker 1: Right, you want to go and get the biggest deals 80% of your revenue comes from 20% of your customers but once you've done that, then where do you grow?
• 4:16
  Speaker 1: And you've got to start to work out to flatten that 80-20 rule.
• 4:19
  Speaker 1: And that means you've got to go and get millions of end users.
• 4:23
  Speaker 1: And the SMB space is the place to do that, and partnerships first, channel first, is the mechanism to do that.
• 4:29
  Speaker 1: So to me, it's just absolutely clear.
• 4:31
  Speaker 1: We're now at this, this tipping point, where we're going.
• 4:34
  Speaker 1: Cool, how do we capture the SMB space?
• 4:36
  Speaker 1: Because it's less competitive, there's loads of opportunity, it's partnerships led, its channel led.
• 4:41
  Speaker 1: Now we've got to go and really just dominate in that area and that's going to be the absolute catalyst to drive significant growth.
• 4:49
  Speaker 2: Yeah, and I think if you look at those two companies specifically, it's not just words that they put out there, but the deeds are very strong, like, if you only look at Cisco, they just acquired Splunk For 25 plus billion and it's such a big acquisition.
• 5:03
  Speaker 2: And why did they acquire Splunk?
• 5:04
  Speaker 2: Because Splunk is so strong in SMB as well and that's where they really want to drive and they have good product Overlap, of course, and that there you see, they are actually investing a lot of money in going all in on that SMB approach.
• 5:18
  Speaker 1: Yeah, and the other one that was a few years ago, which just shows you a continuation of the Cisco strategy.
• 5:22
  Speaker 1: Cisco bought a company called Broadsoft, an agnostic telephony provider, and Broadsoft customer base is the super SMB, right, it's the really small, like estate agents, right.
• 5:33
  Speaker 1: And so they sell these huge PBX's to partners like Gamma, who then really saturate the market in that very low end.
• 5:40
  Speaker 1: And you just see this continual development from Cisco to go we've got the Nestle is, we've got the Pepsi Co's, we've got the biggest companies in the world.
• 5:47
  Speaker 1: Now what is like?
• 5:49
  Speaker 1: Well, there aren't bigger companies than that, so we need to start going down the value stack and capture lots more customers.
• 5:56
  Speaker 1: And they're really exciting thing is that's a different type of channel play and I really think we're going to see the likes of a Cisco and Microsoft drag the rest of the channel into focusing on the SMB.
• 6:07
  Speaker 2: And that's what we've seen historically always.
• 6:09
  Speaker 2: Like everyone always takes Cisco and Microsoft as an example, their partner programs, their way of going to market, and so trend that will happen again.
• 6:16
  Speaker 2: But I think indeed, if you look at the situation right now, there's actually a lot of other vendors that we also hear that they want to do something with SMB, but they don't know how to approach it and it's actually not happening.
• 6:26
  Speaker 2: What do you think is the reason why it's not happening for a lot of companies to actually shift gears towards it, as and be, while we've clearly seen from the market stats how big that market is?
• 6:37
  Speaker 1: Yeah, the first is real, really easy.
• 6:40
  Speaker 1: If you've got a small sales team, you're whale hunting right.
• 6:43
  Speaker 1: That's the best allocation of resource you can get.
• 6:45
  Speaker 1: If I've got one sales guy, I can either get him to close loads of small deals or one big deal and hit the number well, just from an allocation split it's much easier to focus on a few partners and a few customers and get to the number.
• 6:58
  Speaker 1: That way, when you look at a likes of a Microsoft and a Cisco, they've got the resource to spend the people, the platforms to be able to scale really deep and wide simultaneously.
• 7:11
  Speaker 1: We've talked about this a lot.
• 7:12
  Speaker 1: If I'm building a channel from the outset, I'm not going for breadth, I'm going for depth first.
• 7:17
  Speaker 1: Now that Microsoft and Cisco have sold for depth, now they can start to add breadth.
• 7:21
  Speaker 1: But a real key reason why I see so many people is because we're talking about people and when you allocate people, you allocate them on a few accounts or a few end users, because that's the best way to get that one to one relationship flowing.
• 7:33
  Speaker 1: And that's the biggest prohibitor to scaling wide is we're focusing on the challenge by people, not by tooling.
• 7:42
  Speaker 2: Yeah, I think that's correct and I also think I think there's a lot of fear within a lot of vendors because indeed, now they have a channel channel team, they're very focused on the big partners, the CDW, such as, et cetera, of this world.
• 7:52
  Speaker 2: They think I need to spend all my time there continuously or I'll lose market share there.
• 7:56
  Speaker 2: But we really need to rethink how we go to market with our channel team if we want to involve S&B as well, because in the past, we've always been very relying on our distributors for that.
• 8:07
  Speaker 2: But your distributors also have many vendors that they have to juggle and also have a lack of time and resources.
• 8:12
  Speaker 2: So we really need to rethink the strategy in terms of how we approach that S&B market.
• 8:16
  Speaker 1: Yeah, and you just see Cisco doing it in the right way, as Cisco very liable to do right where they're not going.
• 8:22
  Speaker 1: Cool.
• 8:23
  Speaker 1: Let's just now speak to our distributors and hope that they do more work in the S&B.
• 8:27
  Speaker 1: It's like they are making acquisitions, they are investing in people and tooling to ensure they can actually wade into the market and really change behavior.
• 8:35
  Speaker 1: It's not something you just organically develop right.
• 8:38
  Speaker 1: There has to be real strategy broken down into the actual tactics and then deep into the execution model.
• 8:44
  Speaker 1: That is really hard to construct organically, in fact, I would argue impossible.
• 8:49
  Speaker 1: Instead, what you need to be doing is designing a go to market motion which is going to drive you forward.
• 8:53
  Speaker 1: Yeah, 100%.
• 8:56
  Speaker 2: I think.
• 8:56
  Speaker 2: If we take Cisco as an example, they have actually decided to not completely rely on distribution anymore for the long tail for the S&B, and they are actually building a whole team of virtual partner account managers that's what they call them and in every region they have such a person, who's not then just managing 10 or 20 partners, but they manage hundreds.
• 9:15
  Speaker 2: And they all do that in a virtual way and therefore you already got so many more touch points, but I think even their Cisco is stronger than the S&B.
• 9:23
  Speaker 2: I'm struggling actually at the moment in terms of how do you skill that?
• 9:25
  Speaker 2: Because, also, that one person can talk to 500 partners in that region on a monthly basis.
• 9:31
  Speaker 1: Yeah, to me this is almost.
• 9:32
  Speaker 1: You can wind it back to go what's the difference between sales and marketing?
• 9:35
  Speaker 1: Right, sales is your one to one approach it's the same message and marketing is a one to many approach, and so you almost want to target your S&B strategy in the same way.
• 9:44
  Speaker 1: You'd pivot from sales to marketing.
• 9:46
  Speaker 1: There's got to be a way that you digitally drive behavior, have a conversation one to many and pull the right resources in.
• 9:53
  Speaker 1: That's a completely different strategic vision to how you organize a channel, and so that's why this top down approach needs to happen.
• 10:02
  Speaker 1: Where you're going excellent, we understand, and I think Cisco are doing an amazing job.
• 10:06
  Speaker 1: Right, they're tackling the problem in stages.
• 10:08
  Speaker 1: But you've got to be looking at parallel channel strategies your channel strategy for how you acquire multi billion or multi million dollar deals versus how you acquire hundreds of thousands of people, thousands of small value deals.
• 10:21
  Speaker 1: They are two different channels.
• 10:22
  Speaker 1: They require two different strategies, as does sales and marketing.
• 10:26
  Speaker 1: Right, you wouldn't have a salesperson run your marketing strategy.
• 10:29
  Speaker 1: You wouldn't have a marketing person run your sales strategy.
• 10:31
  Speaker 1: It's got to be broken down into its composite ponies so the business wins.
• 10:36
  Speaker 2: Yeah, and really driving that marketing with a very commercial way, but indeed that's the only way to do it, I agree, to actually make sure that you activate your long tail and your SMB partners there.
• 10:46
  Speaker 2: I think actually one of the struggles that I hear from a lot of vendors is that their database is just not complete, like and just.
• 10:54
  Speaker 2: They don't have the right data about their partners, which starts with the right contact person.
• 10:58
  Speaker 2: So the partner has signed up for your partner portal five years ago.
• 11:01
  Speaker 2: It was someone who already left the company three years ago.
• 11:05
  Speaker 2: You try to contact them, you try to send them emails or whatever, but it's simply not working because they are not receiving it.
• 11:12
  Speaker 2: But also not just that from the people they do still have the right contact details from, they actually don't have the right segmentation within that partner base.
• 11:19
  Speaker 2: So via which distributors do they work?
• 11:21
  Speaker 2: What product categories do they sell from the whole suite?
• 11:23
  Speaker 2: So we're just bombarding the partners with a lot of information and, let's be clear, especially the SMB partners are the ones who lack the most time and resources.
• 11:33
  Speaker 2: So that's why it's so crucial there that you get that right, and I think that's where a lot of vendors actually should invest time and money actually where they really going to go deep into.
• 11:41
  Speaker 2: Ok, we want to get our partner database to the right level.
• 11:44
  Speaker 2: We want to have the right people within the partner.
• 11:46
  Speaker 2: We want to know exactly what their go to market strategy is.
• 11:49
  Speaker 2: Where are they at in our partner program so we can actually provide them with the right information and the right automation in terms of marketing, for example, to make sure we get them to the right end user.
• 12:01
  Speaker 1: I completely agree.
• 12:02
  Speaker 1: I think what we need to be talking about is really well defined channel architecture.
• 12:07
  Speaker 1: To begin with, right, internally, who are the types of people, processes and culture that we need to build so that we can scale an SMB channel?
• 12:14
  Speaker 1: Then to look at what do we need in terms of the types of partners, the volume of partners in the tooling to be able to make those partners work well and I really, really stress tooling, because you're not going to get there with people, right?
• 12:28
  Speaker 1: I just think the unit economics don't work out right.
• 12:30
  Speaker 1: So if we take a virtual partner account manager, they can't speak to 5,000 partners, but they might need, you know, 500 partners to break even, right, and this is the complexity of throwing people at an automation problem.
• 12:44
  Speaker 1: And so I would be building your go to market motion very, very specifically looking at what tooling is going to give you the competitive edge so that you can acquire, enable, generate opportunities and close revenue consistently at scale, to a scale that we've never seen before, right?
• 13:04
  Speaker 1: This is the real complexity around the channel.
• 13:06
  Speaker 1: Channel is the hyperscaling motion, but there's hyperscale when we're talking about 100 or 1,000 partners, and then there's hyperscale when we're talking about 10,000, 50,000, 100,000 partners, and when we're talking about SMB, we're talking about Group 2, right, we're really talking about, oh, we might need across Europe, a new set of 50,000 partners to go and acquire, you know, another $3 billion in revenue.
• 13:30
  Speaker 1: Yeah, it's great.
• 13:31
  Speaker 1: How the hell do we do that?
• 13:33
  Speaker 1: You're not looking at people.
• 13:34
  Speaker 1: You're looking at processes and tooling.
• 13:36
  Speaker 2: Yeah, 100%.
• 13:37
  Speaker 2: I think you really need to think, like you said, in those 100,000s of partners, because if you want to chase that SMB market which, mind you, is more than $1.5 trillion worldwide, then you need to really have a lot of partners and really go to market in a very big way to actually do that yeah to me, building a top-ended channel right where you're leveraging MDF and you've got one-to-one relationships with a few partners.
• 14:07
  Speaker 1: It's fairly simple in terms of design Going how do we acquire 100,000 partners, make them successful automatically, create opportunities and close those opportunities at scale so that we can unlock billions in revenue?
• 14:22
  Speaker 1: That's really complicated to design, but with the right people to design the program and the right tooling you really can make a huge difference.
• 14:32
  Speaker 1: Because one of the biggest pieces of upside that we've not touched on the lack of competition right when we talk about that level of complexity.
• 14:39
  Speaker 1: That's your moat, because it's really hard for anyone else to do exactly why Cisco and Microsoft are so focused on capturing that market space.
• 14:49
  Speaker 1: Because they know once they've captured, it's going to take a lot of time and money for other people to catch up, right.
• 14:55
  Speaker 1: My favorite example of a business moat where you can really defend your, your value add is when we talk about Amazon as a distribution company.
• 15:01
  Speaker 1: Next day delivery is almost impossible to organize.
• 15:05
  Speaker 1: Just think through the logistics of making that happen.
• 15:07
  Speaker 1: The reason they work so hard to do that is because they're the only company in the world that can do that, and so then you're defended.
• 15:14
  Speaker 1: It's exactly why Microsoft and Cisco are going after the SMB space, because once they've captured the partners, it's almost game over for the rest of the market, unless you move fast.
• 15:23
  Speaker 2: Yeah, and I think, though, what's also definitely very difficult in the SMB is around attribution.
• 15:29
  Speaker 2: That's also where I see a lot of channel team struggling with the initiatives they do launch, smb, etc.
• 15:34
  Speaker 2: Like, how do we show internally the success of that?
• 15:36
  Speaker 2: For example, you just mentioned MDF.
• 15:39
  Speaker 2: If there's one thing I can promise to our listeners, mdf is really hard to execute in SMB, especially because you need to have to like the full process that they, that they do something with the MDF, but then also that they upload leads, follow up on leads to the full pipeline management, etc.
• 15:55
  Speaker 2: I have never seen it work successfully and I've seen a lot of campaigns like hundreds of campaigns in the channel by now, where actually SMB partners are constantly following up on leads, giving that feedback back to to the vendor.
• 16:08
  Speaker 2: Where are we in the pipeline?
• 16:11
  Speaker 2: Even deal registration as an example, a lot of the deals that SMB partners do are too small to even be allowed with the large vendors to be a deal registration, etc.
• 16:19
  Speaker 2: So that's another thing we need to completely rethink.
• 16:23
  Speaker 2: Are we measuring the success of our activities that we enroll for the SMB partners?
• 16:29
  Speaker 1: I think I'll say it slightly harder for SMB.
• 16:32
  Speaker 1: Don't even bother with MDF, it's a complete waste of time.
• 16:35
  Speaker 1: You need to be, and this is why I'm talking about two parallel channels.
• 16:37
  Speaker 1: Your channel strategy that works for top end of partners does not work at the bottom of the pyramid, and so you need to be ensuring that you've got money to drive performance, but not looking to use that money in the same way that you would with a CDW.
• 16:51
  Speaker 1: We're not talking in the same sphere, and so it's just an entirely different channel.
• 16:56
  Speaker 1: So instead we're working back from the problem that we're trying to deliver, which is how do we create opportunities within partners, how do we prove our a Y of our spend, and what metrics do we need to report internally that are going to be different from the other side of the business, and that's really important.
• 17:13
  Speaker 1: If you try and go and build the same ROI analytics for your top end of the business is your bottom.
• 17:18
  Speaker 1: It will just fail because you cannot report the same things.
• 17:23
  Speaker 1: It's the same as sales and marketing, right?
• 17:25
  Speaker 1: I don't benchmark my marketing a marketing.
• 17:27
  Speaker 1: I don't benchmark my new marketing team on how many calls they made.
• 17:30
  Speaker 1: It would be a waste of time.
• 17:32
  Speaker 1: And so why would we create the same set of analytics and measurement processes for the top of my pyramid as the bottom?
• 17:37
  Speaker 1: It's crazy.
• 17:39
  Speaker 1: So instead we need to define a new set of benchmarks that we are going to measure the bottom end of the channel on drive performance that way.
• 17:46
  Speaker 1: But it's a completely holistic strategy that we're building as two separate identities Cisco, microsoft.
• 17:53
  Speaker 1: They're going to have wildly different expectations on the people and the partners at the top end versus the bottom.
• 18:00
  Speaker 2: Yeah, question that just popped in my mind.
• 18:01
  Speaker 2: Let's say one of our listeners is now really thinking about SMB partners or wanting to go all in on SMB partners.
• 18:07
  Speaker 2: Like, what are the key pillars they need to think about when designing a program for SMB partners and in what order should they work on that?
• 18:15
  Speaker 1: Sure.
• 18:15
  Speaker 1: So you've always got to work back from the problem, right?
• 18:18
  Speaker 1: So the problem is the amount of money that you want to generate from SMB and in what timeframe.
• 18:22
  Speaker 1: That's going to tell you very quickly what the level of investment that you need to put into that, and then you need to work out average spend per partner.
• 18:29
  Speaker 1: Therefore, how many partners do we need to do and what's the process to onboard and drive performance from those partners?
• 18:36
  Speaker 1: It's a different conversation if you already have those partners versus we have some of those partners, versus this is completely new market for us and we need to capture those partners.
• 18:46
  Speaker 1: Then I'm working back from the problem of how do we capture those partners?
• 18:49
  Speaker 1: What's the tooling, what's the process?
• 18:50
  Speaker 1: Do I need distribution?
• 18:51
  Speaker 1: How is that going to work?
• 18:52
  Speaker 1: And you just got to keep walking back that process.
• 18:56
  Speaker 1: While I don't think there's a one size fits all strategy, broadly speaking you need to understand how many partners in what territory and how much ACV are we going to generate per partner so that we can really drive performance that way.
• 19:09
  Speaker 1: Because if you try and think of it in, how do we acquire $25 billion of opportunity?
• 19:13
  Speaker 1: It's never going to work.
• 19:14
  Speaker 1: We need to break that number down into smaller and smaller actions and then distribute that into the organization internally so that partner team understands what they're doing.
• 19:22
  Speaker 1: The marketing team understands what they're doing so that we can break it down into its composite parts.
• 19:27
  Speaker 2: Yeah, and then I think on top of that really have a very specific SMB onboarding flow, like that's wildly different than you'll have with your big partners, but you really want to make that as scalable as possible where you can quickly onboard your partners, get a very clear view of who are the right stakeholders within that partner, make sure they sign up for your program, but also what kind of go-to-market preferences do they have?
• 19:49
  Speaker 2: So very clearly understand where are they located, what sort of region do they serve, which distributors do they buy via, what product categories do they sell, what type of partner tier are they, etc.
• 20:01
  Speaker 2: So you can give them the right information at the right time and then make sure you help them start generating demand as quickly as possible.
• 20:08
  Speaker 2: Because those partners SMB partners they're usually a lot smaller and therefore they are even more following the demand generation.
• 20:15
  Speaker 2: So as soon as companies come to them with a specific ask, they will service that Well.
• 20:20
  Speaker 2: Maybe within your bigger partners you can really build like a program where you're going to do outbound to certain companies etc.
• 20:27
  Speaker 2: Where you more like build the demand generation from a sales perspective, and I think that's really important that you show your partner, your SMB partner, very quickly that they can earn a lot of money and business with you.
• 20:37
  Speaker 1: Yeah, time to value within the SMB is actually more important than the top end.
• 20:41
  Speaker 1: The reason being is those partners are the most fickle.
• 20:45
  Speaker 1: They're going to change their mind very, very quickly and because you can't spend a lot of time nurturing them in fact, I would argue you can spend zero time on a one-to-one basis nurturing them you need to ensure that they get value from your brand as quickly as possible, because then that will keep them engaged.
• 21:01
  Speaker 1: We always talk about revenue drives engagement and engagement drives revenue.
• 21:05
  Speaker 1: How do you do that fully digitally through thousands of partners simultaneously?
• 21:10
  Speaker 1: That has to be your approach.
• 21:12
  Speaker 1: Again, we're almost talking marketing versus sales.
• 21:14
  Speaker 1: How do I have a one-to-many, one-to-thousands, one-to-hundredthousands approach as opposed to a one-to-one approach, and how do we construct it to set our partners up for success?
• 21:24
  Speaker 1: And again, this is so programed, design-y, I don't think there's a one-tie fits all.
• 21:30
  Speaker 1: I think there are broad components that you need to touch on, but if anyone has any specific questions about their channel, certainly reach out to me and Rick, we'd love to get into a discussion around how we can help your channel directly.
• 21:41
  Speaker 2: Yeah, absolutely.
• 21:41
  Speaker 2: I think with the marketing for sales, you're actually touching upon something interesting, which is who should own this program within the company Like.
• 21:51
  Speaker 2: You have the partner program designing the program, of course, the partner program manager, but then it needs to scale throughout the regions and you need to collaborate with distributors, with your long-tail partners.
• 22:00
  Speaker 2: You need to scale with like who should be the owner of a program like this for the SMB market?
• 22:05
  Speaker 1: Yeah, so if we take one of the largest channels in the world, microsoft and Cisco I don't know this, but I would be guessing that they are going to build a parallel organization, right?
• 22:15
  Speaker 1: So you might have your global channel leader into regional channel leaders, say an AMIA channel leader, but then they will have a mid-market or SMB space and they'll have their enterprise channel and those will exist in parallel.
• 22:30
  Speaker 1: I think that the program design, the people, the resourcing is wildly different between the two, and so I can't imagine the perfect structure would have one reporting to another.
• 22:39
  Speaker 1: You'd almost want to break those out like business units.
• 22:43
  Speaker 2: Yeah, I agree there.
• 22:44
  Speaker 2: I think, if I look at a lot of organizations where they are doing something similar, every channel team is always built around the region.
• 22:51
  Speaker 2: But then you see cross alignment between, for example, let's take the virtual parking account manager of Cisco cross alignment between all the countries, because they are doing the same type of job that you want exchange, learnings, improvements, etc.
• 23:04
  Speaker 2: And I think that's the way to go.
• 23:05
  Speaker 1: Yeah, to me that is the better methodology because, again, we're talking such different performance metrics and if you benchmark the top of your pyramid, the metrics at the bottom or vice versa, it's just not going to work.
• 23:18
  Speaker 1: So instead I would be building sort of shadow organizations and then have those either dotted line or hard lined into the regions.
• 23:26
  Speaker 1: But you need that cross-pollination of ideas and metrics because that's how you're going to learn and iterate.
• 23:31
  Speaker 1: Let's be really clear it doesn't matter if it's me or the world's greatest program designer in the world.
• 23:36
  Speaker 1: You're not going to get it right the first time.
• 23:37
  Speaker 1: This is going to take iteration and improvement, iteration and improvement, and so creating that feedback loop is going to be critical to long term.
• 23:45
  Speaker 2: Yeah, and another role that I think is really critical in a program like this is the content or the marketing role, because if you want to fuel that one too many all the time, the only way you're going to do that in the right way is by having continuous content that provides value, and every type of touch point you have with the parking is, what we like to call it, moments that matter, and that's, I think, really where you bring the right value to the right partner at the right time, and that's what the program should be geared around, because that's the only way you can scale it if you are thinking from 100,000s of partner perspective.
• 24:16
  Speaker 1: Yeah, so there'll be.
• 24:16
  Speaker 1: If I, broadly speaking, there'll be two marketing strategies that would be wildly focused on for SMB.
• 24:22
  Speaker 1: And one is direct to end user and using those leads to seed those into the SMB market to capture attention and hopefully to bring back more leads.
• 24:31
  Speaker 1: And there should be tomorrow.
• 24:33
  Speaker 1: I analysis, right, if we feed a partner a lead within the first three weeks of them signing, there's X percent likelihood that they generate another deal and I'd be looking at that data very, very specifically and there'll be through partner marketing, right.
• 24:46
  Speaker 1: What am I doing to enable my partners to market consistently so that they get their own leads coming in from their end users?
• 24:54
  Speaker 1: And then all of that working together is how you're going to digitally drive performance.
• 24:58
  Speaker 1: That, to me, is the critical step for making SMB work.
• 25:02
  Speaker 1: It doesn't matter if you're on boarding it's not perfect, it doesn't matter if your training is not perfect.
• 25:06
  Speaker 1: If they are creating and closing opportunities, they will stay engaged.
• 25:11
  Speaker 2: Yeah, revenue drives engagement and engagement drives revenue.
• 25:14
  Speaker 1: Yeah, I only know three words, so that's why I like that statement.
• 25:18
  Speaker 2: Excellent, that may be.
• 25:19
  Speaker 2: Finally on this topic, then, metrics and ROI.
• 25:23
  Speaker 2: Indeed, we've already touched upon it a little bit.
• 25:25
  Speaker 2: If you look at SMB partners, you need to measure in a different way, you need to evangelize that internally in a different way.
• 25:32
  Speaker 2: What type of metrics are crucial?
• 25:34
  Speaker 2: And maybe a separate question what is the first success you could show internally when you're building a program like this?
• 25:41
  Speaker 1: Yeah.
• 25:42
  Speaker 1: So you want to start right at the beginning of your funnel, which is do we have the right amount, type, volume, velocity of partners, right, that's where you're going to start.
• 25:50
  Speaker 1: And then what is the conversion between partner on boarding first to time to value, to repeatable value?
• 25:56
  Speaker 1: You want to understand that funnel very, very tightly.
• 25:58
  Speaker 1: You're driving as many partners to self-sustainable revenue We've spoken about this before, but self-sustainable revenue as partners that can find open, closed, renew and upsell opportunities.
• 26:08
  Speaker 1: Those are the five key metrics of any channel.
• 26:11
  Speaker 1: The difficulty within SMB is we're not talking about doing this for 10 or for hundreds, we're talking to do this potentially for hundreds of thousands, right.
• 26:18
  Speaker 1: And so then I want to understand how many partners do we need to onboard?
• 26:22
  Speaker 1: That's going to be your leading indicator, because if you know how many partners you need to onboard, what the time to value is and what the time to self-sustainable revenue is, if you've got those three metrics and the conversion percentage is about right, becomes a velocity in a volume game at that point.
• 26:39
  Speaker 1: And so I'm looking at this very, very scientifically to understand all of my above funnel activity all the way through to direct conversion, if you can get those metrics dialed in really, really efficiently.
• 26:51
  Speaker 1: That's how you, that's how a Cisco goes and acquires 25 billion dollars of extra revenue.
• 26:56
  Speaker 1: Right, they want to make this a sweet, sweet science.
• 27:00
  Speaker 2: If I think about it from a data perspective.
• 27:02
  Speaker 2: Indeed, what's harder in SMB is to look at things on the micro level, because you can't go into the nitty gritty details of where your pipeline is exactly and how deals are progressing, etc.
• 27:11
  Speaker 2: As you could do with your top level partners.
• 27:13
  Speaker 2: But the big benefit is you're going to collect so much more data, if you do it properly, that you can really look at it from a macro level and therefore really build it as a science.
• 27:24
  Speaker 2: Indeed, where you might not go into okay, what, how much pipe do we have with this specific partner, or how are we progressing that, etc.
• 27:30
  Speaker 2: But you're really going to look at your full partner funnel, just like you described it, all the way from recruit to onboard, to certification, to marketing, to sales, and take all that data together and then see how are we driving those partners to revenue?
• 27:45
  Speaker 2: And therefore, if you really find out, what type of behavior do we want to drive on a macro level to grow the revenue?
• 27:51
  Speaker 2: That's where you will really find the sweet spot within SMB and drive everything towards the the end goal.
• 27:57
  Speaker 1: Yeah, it's again.
• 27:58
  Speaker 1: It's just correlation between what with my sales approach and my marketing approach.
• 28:01
  Speaker 1: Be right for a sales for a deal.
• 28:03
  Speaker 1: I've got loads of information.
• 28:05
  Speaker 1: I can go meet my sales rep.
• 28:07
  Speaker 1: I can see the meeting notes.
• 28:08
  Speaker 1: I've got all the follow up.
• 28:09
  Speaker 1: There's loads of granular detail, but I'm sort of living and dying by how good that individual sales rep is.
• 28:17
  Speaker 1: With a marketing approach, I look at a completely different set of data, right, and then I have far less individual information, but I can build a much more scalable strategy, and so that's really my guidance to anyone out there who's looking to move from top of the market through to the SMB space is you've got to put a completely different hat on measure, completely different performance metrics, and you're thinking about one word as much as possible, and that scale 100%, I think.
• 28:47
  Speaker 2: I think the message is clear if you want to keep growing your channel at the pace as you've done in the last years, the only way to go there is by really looking at SMB and really doing that in a very scalable way, because that's where the biggest time is for a lot of companies and vendors at the moment, especially in the enterprise level.
• 29:04
  Speaker 1: Yeah, I think it's really clear SMB has to be the mechanism for you to continue that rapid pace of growth.
• 29:10
  Speaker 1: The market leaders are making their bets there and, guess what, they're usually right, while there are some very tactical changes that you're going to need to make to execute your strategy, for me it's where the real opportunity over the next few years, so I'd be doubling down there as aggressively as I can.
• 29:28
  Speaker 2: Thank you.