Transaction and Process

Transaction and process are a couple of words that are often used interchangeably though they mean different things.  They’re not opposites like jumbo and shrimp that would make an oxymoron.  Transaction and process are a pair more like data and information.  They’re related not as synonyms or antonyms but through a hierarchy.  You can cultivate data into information and a transaction frequently happens at the end of a process — for instance, a sales process yields a sales transaction.

I believe that vendors think in terms of transactions but that customers think more about the process.  "How many closed deals can I expect this quarter" is a vendor thing while, "how does this product solve my business problem," encapsulates the customer.

Much of this could be applied to the channel.  As we’ve observed before, sometimes partners look and act like equals in business while at other times they behave more like customers.  So it’s good to ask ourselves if our partner-facing systems meet our partners’ needs for processes such as education, marketing, or lead nurturing, or are we treating these processes more like transactions focusing on our desired end result instead of their ongoing needs?

Everyone needs the insight and knowledge that a process provides when dealing with something new.  That’s certainly true for partners that are betting their futures on a relationship with your company.  That’s why any partner program has to have a balance of components that appeal to both needs — transactions and processes — and I mean that in both directions.  Partners need transactions like getting paid and vendors need processes like understanding the pipeline.

But here’s the thing.  You can manage partner level transactions with not much more than spreadsheets to keep lists of various things that are important to the relationship. But even with this you’ll top out and either have to hire more people to manage the spreadsheets or decide to get a Partner Relationship Management (PRM) system.  Without a PRM system, you’ll still just have a lot of data and not much understanding of how your channel works, i.e. its processes.

When you get a PRM system the big benefit will not simply be headcount reduction or more accurate record keeping, though both are useful.  The biggest benefit you will discover is your ability to expand your relationships with your partners by better understanding the processes they use to get results.  The ability to know more about what drives partners, and most importantly, to understand which ones need a little help and that starts when you collect partner data within your main business processes and analyze it. 

Business itself is a process not a transaction and a process orientation helps everyone better understand needs on the way to the transaction.  Understanding process can enable businesses to trouble shoot transactions for bottlenecks too.

The fact that a business expects to be ongoing for the indefinite future speaks volumes about the importance of process.  Without a firm process orientation there’s always a danger things could grind to a halt.  I’ve seen many companies with channel operations that have built their own PRM systems.  The thing that many have in common is a focus on transactions with the partner base.  When these companies ask me what they can do to improve business flow through the channel I invariably tell them to investigate the efficiency of their processes.  At that point the confusion about transaction and process becomes clear and often the vendor discovers that there’s a lot unknown about how the channel works.

When you cross over from transaction-oriented spreadsheets to process driven channel management, you inevitably step into your customers’ shoes and that forces you to see the world as they do through processes rather than only through your eyes that tend to look for transactions. 

This is less rocket science than common sense.  I see the same thing happening in CRM as businesses migrate from pure transaction oriented CRM to process orientation.  The reality is that we live in a hyper competitive era when multiple vendors might be able to supply the same needs.  The vendors that do best are the ones that put on a pair of their customers’ shoes.

Managing Your Channel Partners Like a Baseball Team?



Running a partner channel is a bit like running a baseball organization. In baseball you primarily see the big league talent, but that’s the tip of a big mountain of ice. The minor leagues constitute the majority of any good organization’s baseball effort for the simple reason that the big leagues have an insatiable need for talent. The more talent that an organization can develop in-house without going to the veteran free agent market, the better.

A channel organization is like that in some respects. The vendor has an unquenchable thirst for talented partners who can take the vendor’s products to market, implement and service them, and generally represent the organization and the brand in a credible way. Also, the channel, like single A baseball, is a great proving ground for emerging talent. A vendor might not expect a small new partner to provide significant new revenue right away, but as in baseball, the emerging talent is the future of the organization and a good reason to offer programs that nurture it.

So how do you accomplish this without alienating your established partners who are generating the lion’s share of revenue? Offering the same discount levels to emerging partners who might buy limited quantities would only upset the established partners and it probably wouldn’t do lot of good either. Without the headcount and infrastructure to add appropriate value to the vendor’s goods, a small partner might simply resort to wholesaling the goods, which would likely further alienate the major partners.

Regardless, a wholesaling arrangement isn’t even what a new partner is typically looking for. These prospects—to use a baseball term—are trying to build new businesses and assistance along that dimension is more likely to help both the vendor and the new recruit. This means almost everything but big discounts are important. To be fair discounts may be important too, but they are at the end of a long chain of events that require marketing development funds, co-branding, product and sales training, leads, deal registration, and more.

In baseball new recruits can expect to join a team and to be cared for and nurtured 24/7 as they develop their talent and play games. This is a good place to disconnect baseball and the channel because no vendor no matter how benevolent can afford the time and resources needed to build up partner prospects. This being capitalism, it’s reasonable to expect the partner to shoulder most of that responsibility.

This is another reason why building and maintaining appropriate and adequate partner relationship management systems matters. PRM is not just for managing your big and successful partners, it’s also a mechanism that implements your procedures and processes for developing new ones efficiently and economically. The PRM system helps make developing new talent affordable to the vendor. It’s also an important sales tool for the vendor.

Consider this. If you are new company interested in a channel relationship in a market space, you’ll gravitate to the vendors who can demonstrate an interest in making you successful. You’ll want favorable pricing for sure, but if that’s all you look at, you’re probably not ready to join a channel because you don’t really understand what’s most important to your success. So the desirable new partners are the ones that see value in your channel apparatus and you should make every effort to ensure that they see your value.

The same strategy can also be useful in recruiting larger partners, especially if you need to take them away from a competitor. The quality of your channel programs is on full display in your PRM system and it’s accessible all the time. In either case, the message to your partners and potential partners is that you know how to help them be successful. It’s not much different from a vision of the World Series to a minor league player.

The Single View of the Vendor

In the CRM world we often hear about the single view of the customer and how important it is. Briefly, for a vendor, the single view means capturing all of the information that is relevant and knowable about customers so that the vendor can best manage the customer lifecycle. This means knowing about support issues, billing problems, and sales processes in progress so that no one on the vendor side is surprised during any customer facing process. 

The favorite example is a sales process when the customer has outstanding service issues. It’s generally thought, quite rightly, that a customer will not be in a frame of mind to make an additional purchase when there are outstanding support or service issues.

This all makes so much sense that the single view of the customer is no longer in debate, it’s table stakes for being in almost any business. However, there is a version of this scenario for companies who sell through channel partners that’s now just coming to the surface and it doesn’t get the same play though it should. 

With a direct model customers know who they are dealing with and who the responsible party is but with an indirect model there are more moving parts. There may be a manufacturer or primary vendor, as well as one or more partners that add value to the solution that the customer seeks. For example, a kitchen cabinetmaker might employ an indirect model for the simple reason that partners might be able to do a better job of interacting with the end customer to design a kitchen, select materials and styles, manage cabinet installation, and provide after sales support.

Rather than developing all of this expertise in-house, the cabinetmaker will likely be happy to provide discounted cabinets to partners who can take on these services. But what about the customer? The customer will most likely want to purchase a finished kitchen, from a single company and not a bunch of parts and disparate services that he or she has to then manage and assemble. The customer will want to ensure that the job is done by experts from initial design to final trim and the customer will need the assurance that the whole process including manufacturing the goods by the vendor as well as installing them by the partner, goes smoothly. In fact, that end customer likely won’t know, or even want to know that there are several different companies involved in her purchase. That’s the single view of the vendor.

For value added resellers, simply claiming to represent the manufacturer is not enough these days, for the simple reason that it doesn’t achieve a level of confidence in the overall solution. Since the customer is looking for an integrated chain of value-added product and services, the vendor and partner need to work together to convey that understanding through their actions, not just their words. Two ways to do this include utilizing on demand co-branding to demonstrate their relationship and to provide those end users an easy to use online partner directory, or where to buy option, on their website.

Automated on-demand co-branding simply means providing the partner with sales, support and marketing materials that represent both the vendor and the vendor partners’ brands so that information is presented jointly from both parties. Co-branding is a great way to convey the subliminal message that vendor and partner are mutually supporting the customer.

A good partner directory is another excellent approach for demonstrating solidarity to customers and a commitment to your partners. Since most vendors can’t be experts in every vertical market and geography, a directory that lists all relevant partners for a particular customer need is a good way to demonstrate competence, especially for the individualized customer situation. Adding a partner’s expertise, certifications and even end user reviews of partner services to a directory moves the partner from simple product reseller and vendor the from simple manufacturer to the status of a combined solution provider and solutions sell better than products.

That’s what a single view of the vendor is all about. It’s demonstrating to the customer very early in the lifecycle that the vendor-partner pair not only has the capability to deliver the goods, but it also gives the customer a clear understanding of roles and responsibilities throughout the lifecycle.

Conventional PRM does a great job of mostly back office processes like managing discounts and payments, onboarding new partners, managing marketing funds, deal registration, and more. But these aspects are usually hidden from the customer and do little to inspire the confidence needed to deliver a single view of the vendor. But partner marketing enablement technologies like automated on-demand co-branding and partner directories or locators are two good examples of customer facing features that can enhance both the partner and vendor’s image and help close deals. 

The single view of the customer might no longer be up for debate, but the single view of the vendor is just entering the mainstream.

For more on this topic, view the on-demand webinar.

The New Partner Marketing Enablement

Marketing assistance is one of the most requested benefits that partners ask for from the companies they represent. CRN’s Annual Report Card found that resellers value “channel enablement” more than anything else. This is echoed by Everything Channel’s recent recognition of “Channel Champions,” all of which have implemented partner marketing enablement in their programs.

So what new trends are there in partner marketing enablement? How can you best help partners that are typically sales focused, have small marketing staffs and limited technical or financial resources? Here are some things partner programs are beginning to offer to stand out:

Automated Co-Branding of Collateral

With automated co-branding, partners log into your partner portal and specify what collateral they need. It gives them a preview of where their logo and information will appear in the document and allows them to download and print it on demand. If you have a cumbersome co-branding process now, this is definitely an eco-friendly change you can make that leads to more partner promotion of your products, increased loyalty and time/resource savings on your end.

Full Service Co-branded Campaign Execution

In much the same way as collateral, partners log into your partner portal and pick the pre-approved co-branded campaign they want to run. It can be anything from a single email to a complex campaign with landing pages, nurturing tracks and automation for lead alerts. The partner simply specifies their call to action and uploads both their logo and list of prospects (which you never have to see). The campaign is executed with push reporting sent to the partner automatically.

Partner Micro-sites

You create end user content that is packaged into a micro-site. This is augmented by lead capture and lead routing technology. Partners simply place a line of HTML code on their site to syndicate your content and receive leads from it as a result. As you make updates to the content, they are automatically pushed out to hundreds or thousands of partners at a time.

If you would like to learn more about these new partner marketing enablement methods and see them in action, download TreeHouse Interactive’s Partner Marketing Enablement webinar.

Download Webinar »

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TreeHouse Extending Technology Lead in Partner Relationship Management and Marketing Automation

TreeHouse Interactive continues to extend its lead in partner relationship management (PRM) and marketing automation this month at the Dreamforce trade show in San Francisco, CA on August 30.

New technology will be released for the Marketing View™ marketing automation solution. The new features include ground-breaking capabilities related to company level behavioral tracking. 

TreeHouse will also add revolutionary new partner marketing enablement to its Reseller View™ PRM solution, which is already the most comprehensive PRM system available and the only one on the Salesforce.com Appexchange. 

Set up a time to see Marketing View and Reseller View in action at booth 219 at the Dreamforce trade show in San Francisco, CA August 30th - September 2nd or any time after via an online demonstration.

The Importance of Managing Channel Conflict Via Deal Registration

Last week’s blog post generated a question from Wendy M.  I want to thank her for her question and I am sharing the question and answer here because many I have spoken to share the same issue.

Can you provide some guidance on compensation when both the partner and the internal salesperson have both provided value within a sales transaction?

First, having a system that can accurately track that both parties contributed to the sale is critical. A partner portal with deal registration, which is integrated into your CRM, is my recommendation if it is possible. I have seen many cases where poor technology leads to questionable behavior on both the part of partners and sales teams.

Assuming you have a high level of confidence both parties participated in the sale, I like to reward both if you have the margin to do so. For a lot of the companies I work with who sell indirect via distribution, channel sales teams are paid on sell through. This is based on POS data from distribution.  In this case, the inside team gets credit towards their quota and the partner gets whatever carrot you provide as part of the deal registration process.  This is typically a few extra margin points and exclusivity to this registered opportunity as long as the deal meets your company’s requirements. Some typical requirements include:

  • Minimum size in dollars or units 
  • The type of account being sold to (i.e. not a national, government, named account, etc.)
  • Has not been registered by another partner previously
  • Is not being worked by internal sales team members (see below) 
  • Is updated at least every 30 days to keep it active

In the case where partners buy directly from your company, this gets a little tougher. The model I like to see is to reward the partner for registering the deal with you as mentioned above. If you have an internal sales team that works with partners, I like paying them for sales through their partners so they again would get credit towards their quota—which should be part of a compensation plan that is already in place.

From your question it is my suspicion, however, that neither of the two scenarios above apply.  If neither case above applies it means there is some kind of channel conflict between a direct sales team and your partner network. This arises many times from the lack of a deal registration program or a poorly implemented one with unclear rules of engagement. In this case, a partner is working an opportunity with a customer and a direct sales team member is working the same opportunity simultaneously. The deal closes. Now who do you pay?

At this point, my philosophy is that you must pay both. If you don’t, you will lose your relationship with the partner. If this partner was part of a nice sized opportunity that closed, do you want to lose them? Do you want them to spread the news to other partners that your company “steals opportunities from partners”? If you don’t pay your internal sales team member, you have a similar problem.

The solution in this scenario isn’t who to pay, but to prevent the conflict from the beginning. A good partner program with solid opportunity or deal registration and clear rules of engagement will help to prevent this type of conflict. In the case above, if the partner registered the opportunity in the company’s partner portal and the sales team was already working it, they would have been denied the deal registration and subsequently the incremental commission. Conversely, if the partner working the opportunity registered it and received approval for it, prior to the sales team member working on the deal—then when the sales team member went to enter the opportunity or lead into the CRM system, s/he would see that the partner got there first and would move on.  

I want to thank Wendy again for her question and the inspiration for this week's blog post.

How many partners does it take to justify PRM?

I have a customer who has planned on launching a channel program with a Partner Relationship Management (PRM) system for a while now.  I visited this customer at least once per quarter for the past two years on other business.  Each time I saw him I would ask “When are we going to build that Partner Portal and launch PRM for you?” Almost inevitably he would respond with “soon”. 

He called me last week and told me the time had come to implement his Portal/PRM system.  A little stunned, I was very curious as to what the motivation was for starting now when the program had been in development for the better part of two years.  His answer really hit home with me and I thought that others may benefit from the experience so I am sharing it here.

Essentially, my client’s answer was that his program had now exceeded his ability to manage it manually.  At 5-10 partners, he could personally respond to requests for documents, manually transfer deal registrations into his CRM, generate and distribute logos, copy etc.   He was also able to execute trainings on a one to one basis with each new partner. 

Now, however, his program had grown to almost 100 partners and he was spending almost all of his time and the better part of another team member’s time responding to the needs of partners.  This was not beneficial for him nor the members of his partner network.  Thus, he needed to implement a PRM so partners could have self service access to the tools and training they needed to successfully sell, service and support his company’s product line when they needed them.

That got me thinking.  How many partners does it take for PRM to make sense?   Below are a few analyses that take a very conservative approach with respect to what resources a partner may need, how often during a year they might need them and the estimated time to respond to each.  What shocked me was how few partners it took to completely occupy the time of a full-time employee.  Please feel free to share your thoughts and comments.



Why Don’t We Treat Partners Like Our Internal Sales Teams?

As a PRM vendor, we are sensitive to things that help partners successfully sell, service and support a company’s products.  That’s why it always surprises me when companies treat their partners like second class citizens or worse. If you want to grow your partner network, and have it produce the revenue it should, you have to provide resources to partners just like you would a direct sales team.

Resources both direct sales teams and partners need to succeed:

  • Product Training
  • Sales Training
  • Product Sales Materials
  • Product Marketing Materials
  • Technical Resource Availability (SE’s where appropriate)
  • Leads or Marketing Programs to Generate Leads
  • Sales Pipeline Visibility
  • Sales Goals
  • Quota Accountability
  • Financial Incentives
  • Pricing Flexibility – Meet Comp., Special Pricing Authorizations

This is not an exhaustive list but a good start.  If you have an existing partner program or are planning to implement one, I encourage you to think about these and any other resources you make available to your internal sales teams.  Then I encourage you to reflect  on what you are providing or going to provide to your partners.  Is there a disparity?  Why?  Could you sell with what you are providing to your partners?

If you can answer these questions you will be that much closer to empowering your partners to successfully sell, service and support your brand in the marketplace.