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072 - Wayne Mason of Neat - How to Build a Run Rate Strategy for your Channel · Partnerships Unraveled

• 0:14
  Speaker 1: Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about channel and partnerships on a weekly basis.
• 0:20
  Speaker 1: My name is Alex Whitford and I'm the VP of Revenue here at Channex, and today I'm excited to welcome our special guest Wayne.
• 0:27
  Speaker 1: How are you?
• 0:29
  Speaker 2: doing.
• 0:29
  Speaker 2: Hi, alex, I'm fine, good to see you today.
• 0:32
  Speaker 1: Yeah, and Wayne, look for the uninitiated.
• 0:34
  Speaker 1: It'd be great if you could give us a bit of an introduction.
• 0:36
  Speaker 1: Who are you, where have you come from and why the hell should we be interviewing you today around the channel?
• 0:43
  Speaker 2: Yeah, good question, start with a good one.
• 0:45
  Speaker 2: So yeah, so my current role, I am the distribution lead at NEET, so I had all of distribution for NEET internationally.
• 0:55
  Speaker 2: Neet, if you didn't know, is a manufacturer of video conferencing devices, but we're a fairly new business.
• 1:03
  Speaker 2: We're in our fourth year.
• 1:05
  Speaker 2: My background, though and I know I don't look it so you don't have to say anything, alex, it's fine my background is 28 years in video conferencing, started at Tamberg many, many years ago and then moved into distribution.
• 1:23
  Speaker 2: For many years built a couple of distributors and sold those, and then found my way in back into manufacturing, and before NEET I looked after Logitech in the UK.
• 1:37
  Speaker 2: So there's a very quick potted history of what I've done.
• 1:43
  Speaker 1: And so NEET has gone through tremendous growth.
• 1:47
  Speaker 1: I think four years is slightly understating it.
• 1:50
  Speaker 1: Could you give me a little bit of background around how NEET has transformed it and sort of market share and growth rates that NEET have gone through in the last four years?
• 2:00
  Speaker 2: Yeah, so we launched the Zoomtopia in 2019.
• 2:05
  Speaker 2: And it's quite an interesting story.
• 2:09
  Speaker 2: Our founder was approached by the founder of Zoom to develop product to give an enrich and give people a better collaboration experience and tie that great platform into great quality hardware.
• 2:27
  Speaker 2: So our founder, seaman Tigra, decided, yeah, we can do that and we can be disruptive.
• 2:36
  Speaker 2: So he went away and made some product.
• 2:39
  Speaker 2: We launched, as I say, at Zoomtopia in 2019 with two products and that went down really really well and the difference of the products and the disruptive nature was trying to create a strong connection between the hardware and AI in the system and then come with that kind of disruptive play around, software service around and the kind of features that we've created.
• 3:06
  Speaker 2: That went really well, although it was a strange time to do it, obviously, because no one could foresee that we would then go into a global pandemic and that's always an interesting time starting a new business developing, specifically, room based video conferencing systems when, realistically, no one was in a meeting room.
• 3:25
  Speaker 2: But obviously we navigated that period and I think really what's done, the growth initially was our disruptive approach, that difference, that quality and that disruptive nature of our software and yeah, so here we are four years later, where we've gone through some instrumental changes which I'm sure we're going to talk about in the next half an hour, but that's where we started.
• 3:55
  Speaker 1: I think the piece from my side.
• 3:57
  Speaker 1: Obviously, I used to work at Zoom.
• 3:59
  Speaker 1: I used to run a Zoom distribution strategy I suppose you're my counterpart at Neat and certainly when I was at Zoom, Neat traditionally had a very sort of top of the pyramid strategy when it came to sort of partners.
• 4:13
  Speaker 1: Right, they were focused on a few partners who were doing huge enterprise deals, but, as me and you both know, that's hard to do consistently right, that revenue is very lumpy.
• 4:24
  Speaker 1: You can, it's amazing you close an enormous deal, hit your entire quarter with one deal, one partner, but then where's the next deal coming from To build a sustainable business unit?
• 4:33
  Speaker 1: You're looking at how do we develop a run rate strategy, and that's something, Wayne, that you've been pioneering Neat.
• 4:39
  Speaker 1: Can you talk me through?
• 4:40
  Speaker 1: How do you build a run rate strategy?
• 4:42
  Speaker 1: How does distribution player role in doing that?
• 4:45
  Speaker 2: So, just checking, we've got half an hour here, yeah, exactly.
• 4:49
  Speaker 2: So, yeah, I think the whole business realized that.
• 4:54
  Speaker 2: You know, when we came out of that pandemic, we saw obviously a growth cycle develop and really the model we had selling directly online was a great model in its inception, but actually it was never going to create the scale and the sustainable growth and the control growth that you really needed.
• 5:21
  Speaker 2: And also, dare I say, that the market was offering.
• 5:23
  Speaker 2: Yeah, because I often think, depending on the strategy, or the strategy you employ is very dependent on where you are in the lifecycle of what you're offering.
• 5:32
  Speaker 2: There's a product or a service or you know how mature that market is.
• 5:36
  Speaker 2: So video conferencing is one of those strange markets where every year somebody says this year is the year of video conferencing and you know, people like me have been saying that for 28 years.
• 5:47
  Speaker 2: But you know, it really really did take something like a global pandemic, unfortunately, to make people look at the way they were working.
• 5:58
  Speaker 2: And so for us it became very clear selling in that direct fashion, then kind of starting to work with a few partners, because they came to us Almost we had to pull on our big boy pants and say, hey, how do we scale this business?
• 6:16
  Speaker 2: And you've already alluded to it that the only way you can scale in that accelerated fashion is by adopting a distribution led model.
• 6:28
  Speaker 2: But it's an interesting almost dichotomy about what you do as a strategy when you start.
• 6:33
  Speaker 2: Do you start with a scale down market strategy that drives a room rate, or do you go for that kind of enterprise, top performing, partner led kind of model?
• 6:50
  Speaker 2: Well, I actually think it's both, and the reason for that is the two sides of the same coin.
• 6:58
  Speaker 2: So to drive distribution anyone who thinks that signing distribution is the answer to all prayers as a distribution guy is wrong.
• 7:08
  Speaker 2: Because you've got to educate them, you've got to mobilize them, you've got to incentivize the commercial offerings got to be correct.
• 7:16
  Speaker 2: The product has to be correct and you're trying to create almost a perfect storm that you can go to market with.
• 7:23
  Speaker 2: But to do that and to get those distributors to believe that story, you have to have the odd big hits are in market to go.
• 7:32
  Speaker 2: I'm a big partner, I believe in this brand, but you also don't want to lose that connection with those big partners.
• 7:39
  Speaker 2: So right from its inception at Neat, when we were, when I was a devising the distribution strategy.
• 7:45
  Speaker 2: It was all about driving down market and driving net new partner adoption, because that's what we needed obviously is a new brand with, to be honest, very little brand credibility, not really known in the market.
• 8:01
  Speaker 2: But to keep the, to keep you pay the bills while you're building that down market strategy, you need that kind of Key End User Development and Large Partner and Development.
• 8:14
  Speaker 2: And the way I kind of fundamentally look at it, I suppose, is, you know, the long down market strategy gives us that diversification, it gives us a stable revenue, you know, and in a kind of expanded market coverage that we needed, but ultimately the partner level and that and we still obviously have that today strategic partners, that just gives you that focus that you need and it gives you the control and that real sense of partnership, of working with a partner to bring them on board with you.
• 8:47
  Speaker 2: So for me it's not a case of either or it's a case of what percentage are you going to go one side and what percentage are you going to do the other side and making sure you get the fine balance that suits your market that you're about to enter into.
• 9:06
  Speaker 1: Yeah, I think from my side when I've built distribution strategy, to me distribution is the ultimate scale.
• 9:14
  Speaker 1: But with scale comes dilution of control, right, and so what you're trying to build is a diluted version of the value that you provide for the very top partners.
• 9:23
  Speaker 1: And so if you've got it right with a few top partners and you really understand that mechanism deeply, then you can sort of repurpose and cookie cut to that process and accept that, yes, there is some dilution of process because you're not touching it directly.
• 9:36
  Speaker 1: But the flip side of that is what scale is right?
• 9:38
  Speaker 1: At some point you're dissolving yourself of the responsibility of controlling every minor part and accepting that distribution is going to take some of that on an offer, that real scale which to me, when I put my CFO hat on a strategic vision, it's like how do we monetize this more effectively and how do we have consistent revenue that your top partner that's trying to close Nestle isn't going to be able to provide?
• 10:00
  Speaker 1: The upside is, when they close Nestle, hey, we're all really happy, right, because that's an enormous deal.
• 10:05
  Speaker 1: And so the balancing act of building a channel is how do you get the best of both worlds?
• 10:10
  Speaker 1: And you've got to build a divested strategy to achieve both those things.
• 10:15
  Speaker 2: You do.
• 10:15
  Speaker 2: I agree with you.
• 10:16
  Speaker 2: I think one of the key things as well is really understanding the type of partner that you're working with, but also how you facilitate those partners and their go to market.
• 10:29
  Speaker 2: And what I've been by that is, I'm a big believer is we're only as good and as successful as our partners, be that those focused partners or that long tail of partners, and every partner that transacts with me is valued and I'm very mindful and the culture we have in the is one of value and always really banging that drum about be humble, be appreciative of any partner that wants to talk to you about your product, and the thing that we have to do as a manufacturer is keep the integrity of a commercial offer.
• 11:06
  Speaker 2: Yeah, be transparent about what we do, and I'm talking specifically about street price and list price, because a big thing for me about protecting that, that protects the margin of your channel and your partners and distribution.
• 11:24
  Speaker 2: The moment, for example, you rush that accelerated process to online, for example, and start selling via e-tailers too quickly, they have their place in the market, absolutely yeah, and they can give you a credible scale, but that's in a particular type of market.
• 11:43
  Speaker 2: Now, in our market, you know in where we are in our life cycle, I have to make sure that we're protecting that list price for our partners.
• 11:52
  Speaker 2: Now, often when you go online, there's a degradation and erosion of that this price and you find there's a street price and then there's a delta between that list price and street price.
• 12:04
  Speaker 2: And that's one of the key things that I think a lot of people miss.
• 12:08
  Speaker 2: When they go out, they see the scale opportunity, but you're kind of selling your soul almost depending on where you are in your life cycle, because what it does is it creates that delta and that, fundamentally, is eroding the margin of your commercial offer and reducing the value that your potential partners or the next new big partner is going to see in your brand.
• 12:33
  Speaker 2: So we focused very heavily on protecting that marketplace for us.
• 12:38
  Speaker 2: You know, one of the key things we did when we started was making sure our deal registration program, yeah, was very heavily weighted, and so we offer 10% in our deal registration program and that creates a real advantage to the partner.
• 12:57
  Speaker 2: That brings that opportunity for that, because we value that partner, and it also creates a transparency.
• 13:03
  Speaker 2: So I think, yeah, in a kind of roundabout way, that was one of the key things that I looked at first was how do you protect the commercial integrity.
• 13:13
  Speaker 2: If you crack that, you've got a very good story then to take to both those types, your big partner.
• 13:21
  Speaker 2: You want to kind of really work with and grow those homiths that you know we all know who they are that add value, yes, but all that long tail, the smaller businesses or the guys that are adding value but they've just not got the size of revenue.
• 13:35
  Speaker 2: We need to protect them as well because they switch off very, very quickly.
• 13:40
  Speaker 2: So protecting that long tail and making sure the pace of growth in your long tail is as big in your performing top part For me is a critical success factor in the channel.
• 13:53
  Speaker 1: Yeah, and I think you're talking a lot about channel integrity.
• 13:57
  Speaker 1: When we start to hit that true scale and you're not speaking to partners on a daily basis or a weekly basis, and if you're not speaking to them at all directly because you're leveraging distribution to have those conversations, a good reputation will take you very far, but a bad reputation will take you nowhere.
• 14:13
  Speaker 1: And I think this is why having that critical protection in there is because you'll just burn your entire strategy right Once you get labeled.
• 14:21
  Speaker 1: It's almost game over at that point.
• 14:25
  Speaker 2: True or not, never spoken, really, really.
• 14:29
  Speaker 1: You can see we both I'm trying to protect brand image.
• 14:32
  Speaker 2: Absolutely so.
• 14:34
  Speaker 2: One of the things that I actually did at Logitech and I brought that concept into me because it works so well it's caused to exactly what you've just said.
• 14:46
  Speaker 2: Now I'm sure other people do it.
• 14:48
  Speaker 2: I call it channel assist and dub it channel assist.
• 14:51
  Speaker 2: But the whole idea around channel assist is essentially you have a range of high-top sales people that are out there talking to end users as a vendor.
• 15:04
  Speaker 2: Many vendors have that model where they have those high touch, but our high-touch sales people are also all responsible for the sales with certain key partners.
• 15:16
  Speaker 2: So what that enables us to do is spread our love if you want for better word across 70 partners and those 70 partners engage with those at multi-level.
• 15:33
  Speaker 2: So we're always looking at those contact points because we know contact points create these compelling events.
• 15:40
  Speaker 2: So if we've got our sales guys focused on end users but also then focused on servicing our channel partners, when those channel partners bring those opportunities or we have out there in the market, we hear that, I don't know, barclays is looking to get certain channel partner we can then go to that channel partner and engage.
• 15:59
  Speaker 2: I think that's really important, that that's not a bottleneck, and I think that's really important from a channel service proposition.
• 16:07
  Speaker 2: We're agile, so deal registrations, reacting to people's requests for quotes, whatever it may be a question about a product.
• 16:19
  Speaker 2: Everything we've done is creating a mechanism that's agile and responds quickly, because your partner shouldn't have to wait 24 hours for an answer, and so that's worked exceptionally well in creating that trust in the market but also removing that bottleneck.
• 16:39
  Speaker 2: So maintaining our agility, and we've had a good response to that kind of strategy from the channel.
• 16:49
  Speaker 1: That's excellent.
• 16:49
  Speaker 1: There's a lot about sort of channel architecture and sort of commercial design there to help neat and neat win from a sales perspective.
• 16:57
  Speaker 1: I want to pivot slightly and understand from your perspective how does marketing contribute to driving a long tail strategy?
• 17:05
  Speaker 2: So I can almost so our marketing director.
• 17:08
  Speaker 2: We've got two in international, we've got one for Amir and one for APAC, clara and Christina I can almost feel them on each shoulder now, you know.
• 17:17
  Speaker 2: So it's the most important, absolutely yeah, for me, marketing is a pivotal in that long tail because it keeps the communication.
• 17:29
  Speaker 2: You know it's a vehicle for increasing awareness within that partner community.
• 17:36
  Speaker 2: Different, very different messages.
• 17:38
  Speaker 2: You know there's different mediums.
• 17:40
  Speaker 2: That you know.
• 17:41
  Speaker 2: You know too well whether it be digital, integrated fire events, old school kind of.
• 17:48
  Speaker 2: You know, more, more direct, mainly even personal invites, personalization.
• 17:53
  Speaker 2: I think for us it's about, yes, it's marketing allows us to raise and increase awareness.
• 17:59
  Speaker 2: It allows us to educate those customers and keep engaging those customers.
• 18:04
  Speaker 2: When I talk about customers, that's very much a case of, yes, end user, but very much also our partner community.
• 18:12
  Speaker 2: Okay, you know we've got the promoting products and things like this that we need to do and that evangelization and it's how you do that.
• 18:21
  Speaker 2: So one of the things you know that we started last year that's been really successful so far and still in its inception, is the emergence of our own portal that we developed and we're using that to drive customer or partner engagement.
• 18:39
  Speaker 2: So, be it whether or not they're registering their deals, they can go and then see what deals are registered.
• 18:45
  Speaker 2: Where are they in the scope?
• 18:46
  Speaker 2: How did they get resources?
• 18:47
  Speaker 2: How did they get support for those deals and information?
• 18:50
  Speaker 2: How did they maximize the opportunity with Neat?
• 18:53
  Speaker 2: And that all stems from marketing.
• 18:58
  Speaker 2: I mean, obviously we've just come off the back of ISC and I'll be honest with ISC, you know our position.
• 19:06
  Speaker 2: We joked about where we were at ISC because we weren't in a hall too where all our brethren and competition were.
• 19:13
  Speaker 2: We were in kind of the far reaches of almost Madrid, not Barcelona.
• 19:18
  Speaker 2: We were in hall four.
• 19:21
  Speaker 2: But the one thing that really really pleased me was the fact that marketing did such a good job at making people aware and gamifying, coming to our stand, that the people that did come to our stand we knew they'd searched us out because that was the only option, but we were overrun.
• 19:43
  Speaker 2: It was just an exceptional experience, the best year at ISC.
• 19:47
  Speaker 2: So, yes, we booked for next year.
• 19:49
  Speaker 2: Funnily enough, we haven't booked all four, we have booked all two.
• 19:52
  Speaker 2: But it was just that fact that all that stems from an engaged marketing strategy that complements what we're doing as a channel strategy.
• 20:01
  Speaker 2: I'm really calling out.
• 20:03
  Speaker 2: There's no good if you've got a channel strategy we have and marketing then wants to do everything by e-tailers.
• 20:11
  Speaker 2: It's not going to work.
• 20:13
  Speaker 2: So marketing has a big role to play.
• 20:18
  Speaker 1: Yes, certainly my belief.
• 20:19
  Speaker 1: When you're running a direct organization, you can have an outbound function and an inbound function.
• 20:25
  Speaker 1: When you start to hit true scale, you'll see that you're inbound function wildly overtakes your outbound function Because it scales far better.
• 20:32
  Speaker 1: It's why I'm such a strong proponent for the channel, because it scales much better once you hit that critical mass.
• 20:38
  Speaker 1: The thing that makes me really interested about how marketing and channel should coexist is it scale over scale.
• 20:46
  Speaker 1: One of the things that I really see happening in the market now is marketing being used to reinforce long-tail partners opportunity creation.
• 20:55
  Speaker 1: I think that's the lifeblood of how you keep a channel going at a very, very high velocity is you know what keeps partners interested?
• 21:02
  Speaker 1: New deals, new deals constantly coming and yes, this is coming from the guy who was at Zoom through a global pandemic.
• 21:09
  Speaker 1: So you do get to eat for free at some point and I'm not suggesting we start a pandemic for us to keep scaling revenue, but marketing plays an enormous role in driving that deal velocity and deal creation through partners.
• 21:22
  Speaker 1: What's your view in terms of how marketing can help partners source and find and close new opportunities consistently?
• 21:32
  Speaker 2: Well, I think it's interesting because if you go by, I mean, you know my background in terms of you know we were a very successful distributor in Margo in the UK that we obviously eventually were sold.
• 21:45
  Speaker 2: But I used to talk often then, just like you did then, about opportunities being, you know, leads, if you like, being the currency that we have to deal in.
• 21:57
  Speaker 2: Because even as a distributor going out to the partner community, you know to win over that partner community you have to engage marketing plan that creates opportunities that you can take, because that's the currency that your customers, partners, understand.
• 22:15
  Speaker 2: Now I think often vendors kind of do this I've signed a DISTE off you go.
• 22:21
  Speaker 2: Well, no, I'm afraid not, mr Vendor.
• 22:24
  Speaker 2: We have a vital role to play in making sure and I think you know from what we've done in the last few years the last two, three, three years is that's one of the things that set us aside as well is our engagement at that distribution level and partner level, but the fact that we're bringing opportunities all the time.
• 22:46
  Speaker 2: And if we're not bringing opportunities and we hear about the opportunities, we then work with those partners to close and distribute it, to close that opportunity, because together we increase the value and we decrease the sales cycle in terms of time.
• 23:03
  Speaker 2: So we're much more efficient when we're working together to do that.
• 23:08
  Speaker 2: And how we get those opportunities is through a number of vehicles.
• 23:12
  Speaker 2: I mean marketing.
• 23:13
  Speaker 2: You know it's a classic seven touch rule within marketing and making sure we have a proper nurture program.
• 23:19
  Speaker 2: So, for example, in our sales guys, our sales guys will have named end user accounts that are classified into three buckets and we have separate nurture campaigns for each bucket because they need different messages.
• 23:36
  Speaker 2: So a bucket one might be, you know, a bucket one would be live opportunities today that you're working with.
• 23:42
  Speaker 2: Okay, well, are we maximizing the opportunity that two system deal?
• 23:46
  Speaker 2: Can that be a four system deal?
• 23:48
  Speaker 2: Have they got wraparound services, that kind of stuff?
• 23:51
  Speaker 2: The second bucket is where they've been spending customers in the past and bought neat, but they currently haven't got anything live.
• 24:01
  Speaker 2: Well, why?
• 24:02
  Speaker 2: Why is that?
• 24:03
  Speaker 2: Do they need help with adoption services?
• 24:05
  Speaker 2: Are they utilizing the hardware to its best ability?
• 24:09
  Speaker 2: What's the platforms they're providing?
• 24:12
  Speaker 2: Because the Microsoft world and the Zoom world and the other guys all have a part to play in that.
• 24:18
  Speaker 2: And then the third bucket is kind of net new stuff that needs the proper seven touch, nurture, building brand credibility in there and making sure that our message are articulated correctly.
• 24:31
  Speaker 2: As far as geographical coverage, market expansion, disruptive, do they understand?
• 24:36
  Speaker 2: You know what our messaging is really?
• 24:39
  Speaker 2: So I think, yeah, I mean, that's how we go to market and we push all that through as a say.
• 24:46
  Speaker 2: It starts at the top of the apex with distribution and that's fed out into the partner community and so over the last, you know, internationally I always mentioned internationally as well, obviously, because our USA businesses ran as its own and then we look after international.
• 25:04
  Speaker 2: But you know, if I look at the number of partners, in the last two years we've gone from almost zero to two, just over 2000,.
• 25:12
  Speaker 2: Across what was three, four countries to now 76 countries.
• 25:18
  Speaker 2: So you know that that that scale can only be delivered if you're really engaged with your distribution partners and focusing them in the right areas of that down market, adding partners, adopting partners and then also picking those partners up and bringing them on those that are accelerating.
• 25:41
  Speaker 2: That's where your top performing partner strategy comes into play.
• 25:46
  Speaker 1: The piece for me and I've seen this happen time and time again with different brands.
• 25:50
  Speaker 1: Your partner program is sort of multifaceted, right.
• 25:53
  Speaker 1: You can have a sales strategy, your program design, your architecture, whatever policies you have around payments, and all of it is your multifaceted strategy and some of those bits will work really well and some of those will be okay.
• 26:06
  Speaker 1: It's always a place where are you gonna bet your chips right, and I've seen programs with amazing enablement strategies, amazing escalation protocols, the opportunities just on that right partners.
• 26:17
  Speaker 1: And I've also seen the reverse, where programs have been, let's say, not well designed, the enablement strategies not as good as it should be.
• 26:23
  Speaker 1: There's opportunities coming out of the partners is I know which program works best?
• 26:28
  Speaker 1: Right, and it's the one where the partners got okay.
• 26:30
  Speaker 1: They're a bit of a pain in the ass deal with.
• 26:31
  Speaker 1: However, the demand is high and when I need something they are there, and so I consistently think the programs that's where it's easy to solve for, like an enablement programs, fairly binary, right, we upload a lms platform into our partner portal.
• 26:47
  Speaker 1: They can do certification.
• 26:48
  Speaker 1: It is what it is.
• 26:49
  Speaker 1: It is obviously valuable and it works.
• 26:51
  Speaker 1: This directly within our control.
• 26:54
  Speaker 1: The pit is more complicated is how do you consistently generate opportunities into the scale that you just mentioned?
• 26:59
  Speaker 1: How do you consistently generate opportunities for 2000 new partners In 70 new countries?
• 27:05
  Speaker 1: Right, that's a challenge, is the talent is I imagine your colleagues have spent a lot of time spending a lot of time on, and I think where it gets really interesting in this market Is the times are changing right.
• 27:17
  Speaker 1: I think covid's been instrumental in changing how we do business and I know from my side I see a lot less events.
• 27:24
  Speaker 1: I think more and more are going digital.
• 27:26
  Speaker 1: I think there's great data out there.
• 27:28
  Speaker 1: I think the staff that flies around constantly is Fifty four percent of B2B buying decisions start on LinkedIn.
• 27:33
  Speaker 1: Right, and for me, if you understand that, the brands that are winning other ones that going.
• 27:39
  Speaker 1: So where do we go?
• 27:40
  Speaker 1: Where the customer is at true scale, and if you get those two pieces working together, that's how you like the fire, keep 2000 new partners in 70 countries excited and maybe that becomes 4000 partners.
• 27:56
  Speaker 2: I think, yeah, I, it's kind of the magic recipe really, because the thing is as well, when you're dealing across such a large geographical area, you have distinct cultural differences that you have to be very, very aware of and in certain cultural differences, actually the webinar has switched people off.
• 28:16
  Speaker 2: You know, in certain areas people crave coming together to an event.
• 28:21
  Speaker 2: So funny, in Southeast Asia we do an awful lot of physical events Coming together and that allows us to touch people and say hi, here, we're visible, we're in, you know we're here.
• 28:37
  Speaker 2: But we can only do that with that partner or, dare I say, with that distribution support.
• 28:44
  Speaker 2: So for us it's about understanding the market, understanding how to build scale there and also what the potential return is, because there's no, no point investing that time, energy and money, dare I say, into a market where you've got three great partners selling but actually the market itself probably only has five or six great partners in there.
• 29:13
  Speaker 2: So you can spend an awful lot of time trying to develop when actually you probably don't need to develop a partner strategy.
• 29:22
  Speaker 2: You need to develop an end user engagement strategy through your partner.
• 29:26
  Speaker 2: So I think, I think for us it's been a learning curve of understanding because, again, all these 70 countries, 70 plus countries, are in slightly different stages of their growth.
• 29:38
  Speaker 2: For one of the bare word, yeah.
• 29:40
  Speaker 2: So the UK, for us wearing my other hat that I wear, looking after the UK for me that's a mature market or getting to a mature market space.
• 29:50
  Speaker 2: Okay, you know, we have a quite a large team now in the UK, whereas if I look at some of our new areas India for example India is a really interesting region yeah, sorry, country with many different regions and we've invested a number of people there.
• 30:13
  Speaker 2: But every region has its own slightly different culture and kind of market.
• 30:17
  Speaker 2: So we have some that are very finance driven, some that are very manufacturing driven.
• 30:23
  Speaker 2: Partners have developed over the years in that space.
• 30:27
  Speaker 2: Okay, so how do we?
• 30:30
  Speaker 2: How do we create something that we get to those partners quickly?
• 30:34
  Speaker 2: Yeah, and how do we recognize who those partners are?
• 30:40
  Speaker 2: And that's where, realistically now, that's where the kind of marketing programs we've done through partner adoption and engaging with them and catch all on our portals and so on, which is really quite embryonic, but trying to get a better digital interface into those and being easy to do business with and being able to scale from a Project ourselves further, if you like, into the market space.
• 31:06
  Speaker 2: That's the ultimate challenge.
• 31:08
  Speaker 2: But I think you know, through the portal, through our partner community we have today, or the distribution sorry community we have today, we are starting to get over that hill in those areas.
• 31:22
  Speaker 2: And I think the key thing is as well, as I've already said, is a lot of vendors, I think you know, over rotate and maybe go into the partner and they forget about we've already said it about the currency.
• 31:37
  Speaker 2: So for us, yes, very distribution led, working with all sorts of partners and scaling and growing.
• 31:42
  Speaker 2: But we have to keep that marketing machine going into the end user space, because that's where the currency is.
• 31:52
  Speaker 2: And the great thing is about our technology, which is a great start I use all the time is we know when a customer buys a neat device, within three months they bought three more.
• 32:02
  Speaker 2: So we're at that part of the moment where we can drop seeding units, pox, whatever it may be, into those customers and and we can almost not guarantee, clearly, but we were very, very sure that within a certain time period we're going to see extended sales, a land and expand kind of strategy- that's excellent.
• 32:25
  Speaker 1: You've spoken about chasing where the real value is and I think we're very aligned in terms of marketing plays the critical role in supporting distribution activities by ensuring that we generate enough hengis of demand.
• 32:37
  Speaker 1: One of the more traditional ways that brands use marketing is via MDF.
• 32:43
  Speaker 1: In a recent study published by JSG, 47% of vendors reported major dissatisfaction with how their top technology service distributors used MDF.
• 32:53
  Speaker 1: I've personally seen MDF used wonderfully and woefully and about everything in between.
• 32:59
  Speaker 1: Wayne, how do you manage to get the most out of MDFI distributors?
• 33:05
  Speaker 2: So here we go shock horror.
• 33:07
  Speaker 2: We don't do MDF.
• 33:11
  Speaker 1: There we go, problem solved.
• 33:15
  Speaker 2: No, but of course we have money for marketing.
• 33:18
  Speaker 2: No, we made a conscious decision From experience that accruing a percentage in terms of MDF in that type of MDF often leaves distributors with surplus budgets that they rush to then spend.
• 33:38
  Speaker 2: And vendors are busy, disney's are busy and rushing and very often they've literally taken notes or dollars or yen or whatever currency you want euro and thrown it down the drain because they're rushing to just do some marketing, because it's some marketing.
• 33:57
  Speaker 2: So we made a decision very, very early on through distribution that we would do an ad hoc proposal based approach.
• 34:09
  Speaker 2: So we sit with our distributors at the beginning of the year, have a six month kind of life cycle forecast which they can amend at the end of the quarter, and they put their proposals in that they want and that we want, and we come up with a figure together and that's all based on what that ROI of that figure would be.
• 34:34
  Speaker 2: So we take one of our distributors, midwich for example, who we work closely with, and they would come to us with a proposal based on the marketing they want to do in the UK or France, or let's take the Benny looks, for example.
• 34:51
  Speaker 2: So they would come to us and we would assess together the ROI of doing that and what that entails and the kind of investment, and what we found is that drives much more engaged and much better return on the money, the individual dollar, we invest into that exercise, because we planned it.
• 35:12
  Speaker 2: We're not just looking at what the accrual is, they know what they're getting and every activity is planned.
• 35:19
  Speaker 2: It also enables us then to actually rinse and repeat that if that's worked well.
• 35:24
  Speaker 2: So, particularly when you're starting out again new, as a new brand and new vendor, I implore everyone to take an ad hoc proposal based because it allows you to control the marketing dollars that you spend, rather than 20% of that MDF that you give to a disty being wasted.
• 35:44
  Speaker 2: And so that's what we've certainly found at the moment, but it enables you, I think, in that way to set really clear expectations, which is the key thing, because we want those marketing dollars to give us a return 100% right.
• 36:05
  Speaker 1: I think one of the real problems when you don't track attribution properly is you can't punish bad behavior and reward good behavior right.
• 36:14
  Speaker 1: Which is what you actually want to do is find the best marketing strategy possible that creates the most revenue and then put every single dollar that you can afford behind that strategy right, whereas when you're just sort of blindly spreading it, as opposed to going hang on, this tactic is working, this tactic isn't.
• 36:30
  Speaker 1: How do we do more of this and less of that so that we can actually incentivize what I think we both agree on, which is opportunity creation, and closure is the name of the game, right?
• 36:39
  Speaker 1: That's why we're here, and driving behavior towards that is ultimately what's going to get the return.
• 36:46
  Speaker 2: Yeah, no right, alex.
• 36:47
  Speaker 2: You take a similar example of a non-descript government department pays a million, places a million dollar order on a partner and they take that because they've gone for neat.
• 36:59
  Speaker 2: Yeah, you know that all of a sudden, if you do a two, three percent that that partner's got you know 20, 30 grand to then go and spend on an MDF accrual and the actual number of transactions in the court is two.
• 37:17
  Speaker 2: They just happened to have land that big deal.
• 37:19
  Speaker 2: Is that the right partner to spend that 20, 30 K on?
• 37:23
  Speaker 2: And that's really why the old rules around MDF and what you get for MDF are yeah, you know.
• 37:33
  Speaker 2: So what a lot of the investment accrual we do is with distribution, because I said right at the beginning well, okay, if you're not doing MDF, how do you make sure that long tail is okay?
• 37:43
  Speaker 2: Because they're not going to come to you with massive marketing programs.
• 37:46
  Speaker 2: But what we make sure is we call to Tata, the distributor, to make sure the distributor is targeting that long tail through their marketing programs.
• 37:56
  Speaker 2: And that might be, you know, takeover days that we do within our distribution.
• 38:02
  Speaker 2: So only yesterday we had a big takeover day in the Middle East and these days are where we go in and we take over completely.
• 38:09
  Speaker 2: You know purple rain everywhere as we say.
• 38:13
  Speaker 2: So for us it's very much about side to side engagement and driving that.
• 38:21
  Speaker 2: Everything we do has to have a return on it or proof of performance, and that's not us being difficult in any way.
• 38:33
  Speaker 2: It's making sure that we're building both our relationships with this, the unpartner for success.
• 38:38
  Speaker 2: Because I said at the beginning, if they're successful, then we're successful.
• 38:44
  Speaker 1: Awesome, wayne.
• 38:44
  Speaker 1: Look, that's been incredibly helpful.
• 38:46
  Speaker 1: Today we've discussed how do we build a run rate strategy and what role does distribution play in driving a consistent strategy, the function of marketing to support distribution and creating opportunities, and how MDF, probably in its old format, isn't the way to continually drive success and we should be rewarding the right behavior, not the wrong behavior.
• 39:06
  Speaker 1: And, wayne, before I let you go, we like to ask our guests to recommend the next guest we should have on the podcast.
• 39:12
  Speaker 1: Who did you have in mind?
• 39:14
  Speaker 2: Oh, dear me, oh, on the spot, so I'm not spoken to.
• 39:18
  Speaker 2: Oh, who should we say?
• 39:20
  Speaker 2: Actually, there is one guy I will speak to him.
• 39:23
  Speaker 2: So if you listen to this podcast before I've spoken to him, I apologize.
• 39:26
  Speaker 2: But I think one of the guys that I work quite closely with is Andy Evans, who is the vice president at Tech Data Maverick.
• 39:36
  Speaker 2: He looks after, obviously, the whole of their Amir business unit and Maverick he's been in the channel a long time.
• 39:45
  Speaker 2: He obviously works with lots and lots of partners and lots and lots of vendors.
• 39:50
  Speaker 2: So I'm sure he'd have an interest in taking some of the some of the questions you've asked today.
• 39:56
  Speaker 2: I'm sure he'll have an opinion on.
• 39:58
  Speaker 1: Excellent.
• 39:59
  Speaker 1: Well, there's two X distribution guys.
• 40:01
  Speaker 1: It's always good to speak to another distribution guy and get their view on how we build the next channel.
• 40:05
  Speaker 1: Nice one, wayne.
• 40:06
  Speaker 1: Steve, appreciate your time and thanks very much, and we'll listen to.
• 40:09
  Speaker 1: We'll speak to our guests next time.
• 40:11
  Speaker 2: Thanks a lot, Alex.