Covid, enhanced teck stacks and new business models are driving new thinking around partner success
By T.C. Doyle
Partnercentricity is back in a big way. This time around, it’s not a platitude but a corporate priority for many instead.
If you are not familiar with the concept, “partnercentricity” is a business theory that took hold among tech vendors several years ago. It’s the idea that everything a company does must have a partner-centric component baked in from the start. While a popular buzzword, the idea caught on among some tech leaders and upstarts who leaned heavily on partners, but not all. Several trends have brought partnercentricity back to the fore. Reasons include the spread of Covid-19, the advance of new tech stacks and the maturity of new business models. Here’s why.
Covid, of course, disrupted the go-to-market strategies of organizations the world over. Seemingly overnight, selling through a broad and diverse network of business partners never seemed more important. Similarly, the rise of new tech stacks such as partner relationship management (PRM) and through channel marketing automation (TCMA) software have provided vendor organizations with tools and confidence they need to more effectively sell through partners. Then there is the maturity of once fledgling business models. Today, thousands upon thousands of new companies have found ways to make money by affiliating with vendors in any number of ways, not just product reselling.
As a result of these and other trends, “partnercentricity” is back on the minds of business leaders. To work this time around, the concept must be woven into the fabric of a company, not affixed to the side as an afterthought, says Kristine Stewart, vice president of client success and marketing at Channel Impact, a San Francisco Bay Area-based channel firm that advises companies on their go-to-market partner strategies and services. Stewart helps organizations extend efforts to elevate customer success and experiences to business partners that engage customers daily. By doing so, Stewart helps vendors and partners alike deliver superior outcomes to customers of all sizes regardless of their market, geography, maturity, etc.
A member of the Impartner Channel Chief Advisory Board (CCAB), Stewart has studied partnercentricity in depth as part of her work on partner success and transformation. Her assessment? Improving partner success and experiences hinges on a number of key factors that organizations with high-levels of partnercentricity get right. They include alignment, decision-making, business economics, product development, support and more. (For a complete list of factors, be sure to download Stewart’s thoughts on partner success and partner transformation.)
Here’s a look at three things that successful vendors must get right in order to be a truly partner-centric company.
Here’s a quick test of partnercentricity: how close is your organization’s top channel manager to your company’s chief executive? By that I mean does he or she have a direct line of site to the C-suite? If not, that’s a potential problem. This is because channel success depends on corporate alignment — the kind that is best achieved when an organization’s channel chief has a seat at the executive table.
In many organizations that have a longstanding commitment to doing business with partners, this is a non-issue. Think Cisco in technology, GM in auto manufacturing or AmerisourceBergen in pharmaceuticals. Little wonder that these companies have organizational alignment when it comes to go-to-market business models, partner investment and product development. In such companies, everything from how products and services are developed to partner enablement to compensation is aligned to promote partner success. Channels thrive as a result.
In other instances, however, infighting, siloed-thinking and morale problems are commonplace.
From the C-suite to the warehouse to the call center and beyond, partner success depends on organizational alignment. If partner success and experiences are not among an organization’s top 10 priorities, then channels are an afterthought and will struggle to achieve success.
When asked one time if he was concerned about his partners’ inability to make money from their engagement with his company, the CEO of one of technology’s largest companies shrugged. “We have different business models,” he sniffed.
Translation: that’s their problem.
For the better of a decade thereafter, this company struggled with partner satisfaction. That is until a new management team recommitted to partnering. Among its top priorities? Leave more on the table for partners.
Which brings me to your company: do you fully understand how your partners make money with your company? And how much? Also, do you know if partners earn more with your rivals than they do with you? If not, you should.
Getting the economics of partnering right is a by-product of proper alignment (see above). But there’s more. Partner economics requires a deep commitment to strategic thinking and financial management. It also requires sophisticated analysis of business models, macro-economics and intangibles. Take ecosystem monetization.
Companies including Salesforce measure how much additional revenue partners generate for doing business with them. At many companies, the additional revenue is anywhere between $4-to-$7 for every $1 of vendor revenue partners generate. That extra amount translates into cross-sell and up-sell opportunities, consulting, training, support and more. It’s enough to thrive on, in other words.
Does your company’s products and services create such an opportunity? If not, then the amount of direct remuneration you provide must be significant to keep partners engaged.
This last bucket includes a number of things that Stewart studies in depth in her work. Commitment translates into a number of items both large and small. Take enablement.
At companies with a mix of go-to-market strategies, competitive information shared with direct or inside sales is often not shared with partners. It’s because corporate executives fear that “secret ingredients” may ultimately fall into the wrong hands if shared with less than scrupulous partners.
On the surface the concept seems reasonable. But in practice, it puts every partner you work with at a disadvantage when it comes to your competition. Worse, it pits your partners against your own sales team.
A better way? Demonstrate your commitment by graciously sharing your best thinking, data and tools with partners. Yes, your secret sauce could fall into the hands of your competition. But by the time it does, you’ll have moved well beyond your rivals’ ability to use internal information against you.
Now consider tool sharing. Today, world class partnering requires world-class automation. So why not provide that to your partners? Put it this way: If you give your direct salespeople the best tools in the world, doesn’t it make sense to do the same for your partners? (We at Impartner certainly believe so and can show you why 78% of your peers believe PRM provides them a competitive advantage.)
Commitment comes in other forms. It includes a pledge to keep confidential information shared between you and a partner, a promise to share the customer support burdens and the spoils of a good year or quarter. It depends on thoroughly understanding partnercentricity through and through.
Can you hack that?