Latest / Partnerships Unraveled / 093 - Harold Nelissen - Building Customer-Centric Partner Programs

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093 - Harold Nelissen - Building Customer-Centric Partner Programs · Partnerships Unraveled

• 0:07
  Speaker 1: Welcome back to.
• 0:08
  Speaker 1: Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships and channel on a weekly basis.
• 0:13
  Speaker 1: My name is Alex Whitford, I'm the VP of Revenue here at Chanect and this week I'm very excited to welcome our special guest, harold.
• 0:19
  Speaker 1: How are you doing All good?
• 0:21
  Speaker 1: Thanks for having me, alex, awesome.
• 0:23
  Speaker 1: Well, harold, you're a channel expert, but for the uninitiated, it'd be great if you could give us a bit of a rundown of who you are and where you've been.
• 0:30
  Speaker 1: Okay, no problem.
• 0:31
  Speaker 2: So, Harold, based out of the Netherlands, I'm currently with Trent Micro for the past year and a half and I run partner strategy and partner programs across Europe programs across Europe.
• 0:47
  Speaker 2: Before that, I spent a bit over four years at AWS, where I was a partner sales manager for the Benelux, and my last role there was part of the AWS Pro Server Leadership Team, setting up alliances there and a whole bunch of stuff before that, ranging from startups to global strategy for GSI a bunch of experience and in that area, so running programs is a really interesting job, a job I one day I'd love to do myself.
• 1:11
  Speaker 1: But one of the most daunting parts of running programs is launching a new program or an updated version.
• 1:18
  Speaker 1: You are, at trend micro launching a new program.
• 1:21
  Speaker 1: I'd love to get into one key change that you're making, but, most importantly, what you're trying to achieve and how you're making that change.
• 1:29
  Speaker 2: I mean, in the end, a partner program.
• 1:31
  Speaker 2: You run that to drive behavior and incentives and the levers you put in place have to support that behavior you want to drive.
• 1:43
  Speaker 2: So when you start building it, it's really looking at okay, what's the behavior of my partners now?
• 1:49
  Speaker 2: What levers do I have in place to actually drive that behavior?
• 1:53
  Speaker 2: And looking at our side is what we saw that we came from a fairly traditional environment, fairly based on discounts, with partners in a fairly transactional space and, in all fairness, looking at partners from a transactional point of view.
• 2:12
  Speaker 2: But if you look at the evolution in the channel landscape, especially with managed services coming up and being a big factor, partners are evolving.
• 2:22
  Speaker 2: Actually, they are often customer as well as partner.
• 2:27
  Speaker 2: So you have to look at them in a different way.
• 2:30
  Speaker 2: Also.
• 2:30
  Speaker 2: I mean, there's a lot of changes, of course, in the technology space, a lot of change at the customer side, but it all comes down to the partner space where you see a lot of that change happening.
• 2:43
  Speaker 2: And that's why we really look okay, what do our customers need at the moment?
• 2:49
  Speaker 2: Because a partner program doesn't start with the partner.
• 2:51
  Speaker 2: In all fairness, a partner program starts at the customer Because, in the end.
• 2:55
  Speaker 2: Building a partner program should help the partner, but most importantly, should help the partner be successful towards the customer.
• 3:01
  Speaker 2: So that's the only way to build a good program is make sure that you look at the customer first, work backwards from there and build a program onwards, and then look at, okay, what kind of how is the customer currently procuring or using our services and how can partners play a good role in that?
• 3:21
  Speaker 2: And make sure that you look at, okay, and how can I make sure I actually do that?
• 3:26
  Speaker 2: So that is the biggest change that we've done is really looking at what role do we see that partners play at customers, and now we have to build a program that suits that model.
• 3:41
  Speaker 1: It's amazing you touched on AWS and customer obsession or customer centricity.
• 3:45
  Speaker 1: I often hear that brand and that sort of customer focus happen.
• 3:49
  Speaker 1: I think was or come together.
• 3:51
  Speaker 1: I think what's really important there is building a program that starts with the outcome in mind, right, which is about how do we win in the customer, how do we provide value?
• 3:59
  Speaker 1: What are the certain levers that you feel like you can pull to drive partners to become more customer centric?
• 4:07
  Speaker 2: For one.
• 4:07
  Speaker 2: You have to look at your benefits.
• 4:08
  Speaker 2: So how can I actually give partners benefit that actually reward them?
• 4:14
  Speaker 2: Of course, in resale you still have discounts OK, cool.
• 4:18
  Speaker 2: So you have your core discount, ok.
• 4:20
  Speaker 2: But I want to reward partners for actually doing the selling.
• 4:22
  Speaker 2: So then you add additional front end discount to actually reward if they initiate the deal.
• 4:27
  Speaker 2: But that's all front-end, where you know that in the end, partner gets a quote, puts something on it and pushes it forward towards the customer.
• 4:35
  Speaker 2: So in the end it's good for the customer but not really good for the partner in terms of certain behavior.
• 4:43
  Speaker 2: And what we know is that a lot of our partners are in transition.
• 4:46
  Speaker 2: They want to transition from a VAR or reseller or whatever.
• 4:49
  Speaker 2: They want to transition to services, managers and so on.
• 4:52
  Speaker 2: That transition costs money and that asks for an investment.
• 4:57
  Speaker 2: So that's why we now added back-end rebates to it, because that in essence comes to the bottom line of a partner directly and that's the revenue or the margin that you use to actually build a service on top of it.
• 5:10
  Speaker 2: And then you combine that with what kind of behavior do you want?
• 5:14
  Speaker 2: We're seeking new logos.
• 5:15
  Speaker 2: We want to see upsell within the customer.
• 5:18
  Speaker 2: We want partners to upscale, we want partners to obtain the competency.
• 5:23
  Speaker 2: So then you add incentives based on these measures to make sure that in that way, you're going to drive that behavior.
• 5:31
  Speaker 1: Yeah, I think that's a perfect answer.
• 5:34
  Speaker 1: I think when we talk about building programs at scale that really really do influence behavior, you have to decide what behavior you want to see.
• 5:41
  Speaker 1: That's where we've got to start.
• 5:42
  Speaker 1: So what is a customer-centric behavior that we want to see within our partner base?
• 5:46
  Speaker 1: Then how do we incentivize and reward that?
• 5:50
  Speaker 1: And then the point that I love there, that was hidden in at the beginning if you give a partner discount, they give it away, right.
• 5:55
  Speaker 1: So it's actually not an incentive.
• 5:57
  Speaker 1: It's a layer of protection, which is great, right, but it's not an incentive.
• 6:01
  Speaker 1: And that's why rebate is so important, because that is a real incentive, especially when you're talking to business leaders as opposed to an individual rep.
• 6:10
  Speaker 1: That discount structure works as a different incentive mechanism.
• 6:18
  Speaker 2: Yeah, and on top of that, to add to that, what we see is that with greater knowledge, that have done certification and so on have a 50% lower churn than partners without that knowledge.
• 6:31
  Speaker 2: So that means that partners with more knowledge are actually capable of helping a customer in a better way.
• 6:37
  Speaker 2: And that's why we are really incentivizing upskilling competencies and so on.
• 6:40
  Speaker 2: Really incentivizing upskilling competencies and so on, not purely to push partners up the ladder, but in the end it's how can we help our customers in a better way?
• 6:53
  Speaker 2: By getting trained partners in front of them, because that will give them the better experience in our product as well, if they are able to sell the right things, advise them in the right way, and so on.
• 7:02
  Speaker 2: So that's the main reason why we want to upscale partners to really make sure that customers get a more smooth experience.
• 7:11
  Speaker 1: What I love there is the data you're using to reinforce your argument.
• 7:15
  Speaker 1: Right, because so often I've heard program leaders and channel account managers probably poorly, explaining the methodology behind the program they built and they go.
• 7:24
  Speaker 1: No, it's really, really important you get this certification, but 50% longer LTV or 20% reduction in churn that's information that the partner wants to hear, right, and they never have that data.
• 7:35
  Speaker 1: They don't know that if I get this certification or do this and that's so, so important.
• 7:39
  Speaker 1: Again, when we talk about the consultative approach, when we're talking to leaders within the resellers, that's really what we get about.
• 7:46
  Speaker 1: And the ae you know, the guy closing the individual deal probably doesn't care that much, but that's why we sort of need a two-level approach one, how are we managing a rep?
• 7:54
  Speaker 1: And two, how are we managing a business leader?
• 7:56
  Speaker 2: because their priorities are different yeah, we experimented with that when we started the program, because what we did is we actually interviewed a bunch of partners in the process when we were looking at what kind we did is.
• 8:05
  Speaker 2: We actually interviewed a bunch of partners in the process when we were looking at what kind of incentives that we do want to put in place, which ones work.
• 8:12
  Speaker 2: So we run an interview series with a bunch of partners in a couple of countries, both really experienced and fairly new partners that we want to get in.
• 8:20
  Speaker 2: Does this button do what we actually think it should be doing?
• 8:23
  Speaker 2: And on one thing we thought it was great and we got pushback from a lot of partners saying sorry, we don't want that, it doesn't work that way.
• 8:33
  Speaker 2: Actually, it would be counterproductive.
• 8:35
  Speaker 2: We like that.
• 8:36
  Speaker 2: You want to pay us for that, but it doesn't work in our organization like that.
• 8:40
  Speaker 2: Okay, cool, we take that along and we change our program accordingly.
• 8:46
  Speaker 1: So in that, okay, cool, then we take that along and we and we change our program accordingly.
• 8:48
  Speaker 1: So, in terms of, you've decided your behaviors that you want to instill in your program, you build an incentive structure and an educational structure around, uh, doing that.
• 8:54
  Speaker 1: One of the things I see so often is that deal protection is involved in partner programs not particularly customer centric, I think you'd argue because deal protection protects a partner and maybe it doesn't help the end customer.
• 9:08
  Speaker 1: How do you sort of balance that?
• 9:10
  Speaker 2: yeah, I mean, I've had a numerous debates around deal protection, um, and I'm not not a big fan of it, um, I think in the end, we should be rewarding the partner for the work that he does, and there are numerous ways of doing that.
• 9:28
  Speaker 2: But if you really do deal protection, you're limiting choice for the customer In the end.
• 9:36
  Speaker 2: If the customer is your main focus because she is, in the end, the one that pays the bill, you should have complete freedom of choosing which partner they want to work with.
• 9:48
  Speaker 2: And if you put something in place like gear protection, you're a limiting choice for the customer.
• 9:52
  Speaker 2: Having said that, of course, if a partner does all the hard work and has built a relationship with that customer for quite some time and is the one that's best suited to help the customer moving forward, you should be helping that partner and you don't want a partner coming in with, going in with a low price and almost buying the customer.
• 10:14
  Speaker 2: Well, you know it's not good towards the future.
• 10:17
  Speaker 2: You could say but if that's possible, how good was the relationship with that first partner in the first place?
• 10:23
  Speaker 2: But in my opinion, it's about rewarding the partner not just at the point of transaction but through the entire circle.
• 10:32
  Speaker 2: Canalys has, of course, looked at, for example, that flywheel.
• 10:36
  Speaker 2: I think you have to look at that from a partner program and benefits point of view as well.
• 10:41
  Speaker 2: Really look at okay, we have different areas in that partner and customer journey.
• 10:45
  Speaker 2: I have to find ways to reward the partner for every step in the journey.
• 10:50
  Speaker 2: Referral fees is one of the things that we are going to use for that.
• 10:53
  Speaker 2: Even if the partner didn't do the transaction, they can get a referral fee as almost a replacement of deal registration, as a reward for bringing us the partner and not doing the transaction.
• 11:06
  Speaker 2: So it's really looking at different ways of rewarding the partner for the work that they've done without limiting choice for the customer.
• 11:14
  Speaker 1: Yeah, and I think the great thing about how that approach is going to drive value for both the partner and the customer is you drive more specialization right.
• 11:24
  Speaker 1: So I know in your time at AWS you'll have worked, and lots of the AWS partner base is very technically led.
• 11:31
  Speaker 1: Other brands are very sales led or very marketing led and, as Canalys consistently sort of reports on, it's not a case of hey, we need a one size fits all.
• 11:42
  Speaker 1: Actually, the most customer centric approach is we might need to work with three or four partners a deployment partner, an installation partner, a customization, a specing, a sales agent, an operational agent and all of those partners provide value.
• 11:55
  Speaker 1: The question is how do you build a program that reinforces the right behavior?
• 11:58
  Speaker 2: Yeah, and indeed it will be five, six, seven partners almost per domain within an enterprise customer.
• 12:06
  Speaker 2: You will see, also within security, there's not one program or product or whatever that covers the entire scope, entire spectrum.
• 12:15
  Speaker 2: There's always that, even though we're seeing consolidation and we're going towards a platform environment, there will be multiple platforms stacked or connected, which then have to work with, preferably via APIs, with other platforms, but also with the hyperscalers and with the on-prem players.
• 12:33
  Speaker 2: So it is always a multi-partner game, because you cannot be the best at everything.
• 12:40
  Speaker 2: So you will therefore need to specialize and find your niche, be it big, be it small, where you really want to excel at.
• 12:49
  Speaker 1: And how do you sort of envision you touched on enterprise customers there.
• 12:54
  Speaker 1: When you talk about specialization, do you see that those partners are going to be separated by size?
• 13:00
  Speaker 1: Are you heading down market in terms of your partner requirement?
• 13:03
  Speaker 1: What's your sort of vision there in terms of your partner acquisition strategy?
• 13:06
  Speaker 2: No, it's a really fun combination what you see there.
• 13:08
  Speaker 2: On one end, we see also the enterprise.
• 13:13
  Speaker 2: You see the big partners going downstream, they want to tackle smaller customers, but also you see boutique partners really step up and go into big clients.
• 13:27
  Speaker 2: So there's not one size that fits all and I think therefore, when you especially build those thresholds and so on, you should keep the matter at a good level, especially from revenue, but move towards impact more and really look at tomorrow more than yesterday.
• 13:47
  Speaker 2: I mean that's one of the reasons why we moved from total revenue to new business, really to help to look at hey, that's forward-looking, that's not backward-looking.
• 13:57
  Speaker 2: We really want to have partners that can help us grow in the future, that can evolve with us, and not just partners that sit on a big pile of revenue, which is important as well.
• 14:06
  Speaker 2: But in the end, you're not doing this to manage the past, you do this to manage the future.
• 14:11
  Speaker 2: Hence, you have to look at your requirements, benefits and also the KPIs you're putting in place.
• 14:18
  Speaker 2: You have to map them to that area as well.
• 14:22
  Speaker 1: I've always found it very interesting because my background is in the AV communication space, so lots of video.
• 14:28
  Speaker 1: I used to work for Zoom and in that area of the market there's AV integrators.
• 14:33
  Speaker 1: Now there's a few enormous ones and they look after the biggest customers in the world.
• 14:36
  Speaker 1: But you might have a 30 man band.
• 14:39
  Speaker 1: It's quite a big partner for the AD space.
• 14:42
  Speaker 1: But they are managing HSBC right, or the biggest bank in the UK right, and those small partners can do enormous.
• 14:50
  Speaker 1: They made a real difference to the number.
• 14:53
  Speaker 1: But if you build your program to only satisfy enterprise partners who have 250 sales people, that market would have died.
• 15:01
  Speaker 1: But the interesting thing, and maybe segwaying into the conversation, how do you have to think differently between the program that you build, the incentive structure and the tools you provide A boutique partner who may be hunting enterprise versus, you know, the Becklers, the CDWs, the biggest partners in Europe.
• 15:18
  Speaker 1: It's got to be a different philosophy right.
• 15:21
  Speaker 2: In the end, it's about looking for levers to scale and not have too many exceptions and, to a certain extent, be be bold on yes, this is the program, this is what we're going to do and we're not going to deviate from it unless there's a really good reason.
• 15:38
  Speaker 2: So the exception almost rule out the exception, which might not sound really customer-friendly or partner-friendly or whatever, but in the end, that's the only way you can scale.
• 15:47
  Speaker 2: In that way, everyone knows what to expect and knows where to come from.
• 15:52
  Speaker 2: And in that way, everyone knows what to expect and knows where to come from.
• 15:54
  Speaker 2: And what we have to learn is that we have to work with more partners at the same time, because there's not one partner that will dominate a market.
• 16:06
  Speaker 2: You have to work with a couple of partners at the same time, getting to the same outcome, which means that you have to template, you have to work with best practices and roll that out throughout the organization.
• 16:16
  Speaker 2: Do a lot of training and looking at best practices, training the local teams on hey, if you want to, this is the kind of behavior we're looking for.
• 16:27
  Speaker 2: These are the tools that can help you do that behavior.
• 16:30
  Speaker 2: But in the meantime, change KPIs, change how people are measured, but especially also paint a picture of where we're going.
• 16:39
  Speaker 2: I think it's a great time for people to be in channel.
• 16:42
  Speaker 2: I think what we see within Trent is that it's a great time to be in partner at Trent because we're changing the metrics is that we are putting partners and channel almost to the level of sales.
• 16:57
  Speaker 2: It's becoming equally important because that's a cool opportunity to be at and it's also a cool opportunity to now finally start talking business with your partners and not just transaction, because I think we can actually help those partners tap into new ways of revenue beyond the transaction, and that's a discussion we expect our people to have.
• 17:22
  Speaker 2: More and more is OK.
• 17:23
  Speaker 2: How can you use our solutions to be successful as a business?
• 17:28
  Speaker 2: So every dollar spent on cybersecurity, that's $2 spent on services.
• 17:33
  Speaker 2: So I can spend a lot of effort focusing on $1 software or hardware, but it's all about how can I help that partner to tap into those two euros of services using my solutions, which is A more revenue and often with a far better margin as well.
• 17:51
  Speaker 1: So my success in essence is is, of course, not so much selling my solutions but helping my partners sell and and move into that services area where they can and should be more successful moving forward so you touch on an amazing point, because actually my my favorite thing and I I landed in channel by chance after university, but my favorite thing was that some 23-year-old idiot called Alex was suddenly walking into partners and going, hey, talk to me about your business.
• 18:21
  Speaker 1: And clearly I'm such a channel nerd I literally have a channel podcast.
• 18:24
  Speaker 1: But to me that's a good conversation to have.
• 18:28
  Speaker 1: Now, I don't think that's a particular natural tendency for channel account managers or partner managers to be sat there and be inquisitive about the business unit economics and what their five-year plan is and what are their urgent priorities versus urgent, important priorities.
• 18:44
  Speaker 1: But like you're saying, harold, that consultative approach is really, really important.
• 18:48
  Speaker 1: How do you embed that into who you hire, how you train them, how you build your program?
• 18:53
  Speaker 1: How does that philosophy come to life?
• 18:56
  Speaker 2: I think it's work in progress for sure.
• 18:57
  Speaker 2: I mean, we're just launching this and this will be something that we will be and are looking into over the coming period.
• 19:04
  Speaker 2: What we have done is we've done extensive internal training Before we launched anything we had we had.
• 19:13
  Speaker 2: We consulted people along the way.
• 19:18
  Speaker 2: When we were about to launch this, we actually went across all teams in Europe and took off.
• 19:25
  Speaker 2: I think it was a two, three hour session in London.
• 19:28
  Speaker 2: It took us five hours.
• 19:29
  Speaker 2: Why?
• 19:30
  Speaker 2: Because, in the end, feedback and questions are what would make this stick.
• 19:35
  Speaker 2: So I think the important thing is I'm really invested in that it shouldn't be my program, it shouldn't be my manager's program.
• 19:44
  Speaker 2: It should be their program.
• 19:46
  Speaker 2: People should feel and that's why we're really adamant on feedback making sure that we cover everything and also do feedback loops and make sure we take that along into the next version.
• 19:58
  Speaker 2: This is one of their most important tools to work with so it should feel as everyone's program, because that's the only way everyone can go out and tell us with passion like, hey, this is where we're going.
• 20:15
  Speaker 2: And, of course, we're changing KPIs, making them more clear but also, in that way, creating more ownership, because if people are running on a target that is way beyond their reach or too general.
• 20:30
  Speaker 2: How can I actually own it?
• 20:32
  Speaker 2: How can I see that what I do contributes to the whole thing?
• 20:36
  Speaker 2: So you have to make sure that you gradually move in that direction as well.
• 20:40
  Speaker 2: From a hiring point of view, of course, we have to look at that moving forward, but for now I think we have a really good team, as we have now, and now we're really focusing on getting people on that journey, helping them in that journey, putting the best practice that we learn in Germany over to the UK, we'll learn the UK over to the Nordics.
• 21:01
  Speaker 2: Really make sure that we highlight the things that now suddenly are emerging.
• 21:06
  Speaker 2: People say, oh, I can actually do something with it.
• 21:09
  Speaker 2: Hey, I've developed this template, hey, let's see what we can do there.
• 21:13
  Speaker 2: So it's also cultivating that learning and sharing experience that in the end, we all can benefit from.
• 21:21
  Speaker 1: That's awesome framing, because I've heard so much that the program is.
• 21:26
  Speaker 1: You know it's there, it's available, it's for the partners, but you're right, it's actually the toolkit for the partner managers, right, it's the incentive structure, it's the stick to beat and encourage and inspire their accounts and help them pay their mortgage.
• 21:40
  Speaker 1: You also touched on another point which I loved in a previous podcast and I sat down with Chris Jones, who runs AT&T's channel globally, and he touched on a really great idea, which was, if you can't show it to me in that commission plan, it's not real, it's not a structure, right?
• 21:59
  Speaker 1: And so is your program aligned with the KPI structures of your teams and how can you ensure it's embedded in there?
• 22:05
  Speaker 1: Because otherwise it's just a vision, right?
• 22:07
  Speaker 1: It's not actually something that people are enacting and driving towards.
• 22:11
  Speaker 2: And not just within the channel commission plan, but also in the sales commission plan, because you don't want that conflict.
• 22:17
  Speaker 2: And there will be conflict by default, which is, by the way, it's good that there is conflict, because then, as far as attraction, it creates the edge.
• 22:28
  Speaker 2: So you have to look okay, how does the sales commission work?
• 22:32
  Speaker 2: How does partner commission work?
• 22:34
  Speaker 2: In the end, those two have to blend together and work together, knowing that there will be friction.
• 22:38
  Speaker 2: But it's not just looking at channel, look at the rest of the organization as well.