Selling through the channel is sometimes tough for manufactures to swallow – especially in situations where they do most of the work yet the partners still make significant margins. But the channel, when effectively managed, can dramatically scale a manufacturer’s business. This requires an investment not only in foregone margin, but in building a channel organization focused on partner success.
I worked for six different channel partner businesses over the past 25 years, was a columnist for three different channel magazines and sat on partner advisory boards for several manufacturers. Now that I’ve been running Channels for Nutanix for the past nine months, I’ve had some time to reflect upon the five key tips for manufacturers wishing to develop a world class channel organization.
1) Give the Partners a Reason for Selling Your Product
I remember sitting at a Citrix Partner Summit in the early 2000s when CEO Mark Templeton was going on and on about Citrix’ goal to be a $1B company. While Mark is one of the people I admire most in the industry, I was disappointed that his messaging was all about Citrix rather than how achieving his objective would benefit the channel. I know through subsequent conversations I had with other Citrix partners that I was not alone in feeling this way.
Channel partners are out there selling, and hopefully evangelizing, your products as a massive unpaid sales force. Ensure that your messaging is geared toward helping them understand how selling your product is going to build their businesses. And this goes well beyond your product margin or even the associated product and services drag. Your messaging should incorporate how your product will give them a competitive advantage, win more business and lead to new customer relationships.
2) Stratify Your Channel
One of the many smart things that Ray Noorda did at Novell was to stratify the channel into three tiers: Silver, Gold and Platinum. This is tremendously helpful to manufacturers because it allows us to identify those partners willing to make the investment into selling our products in terms of obtaining the required certifications, engaging in the expected marketing efforts, etc. We can return the favor by investing back with the top partners by providing them with more leads, more MDF, more training and so on.
VMware learned years ago that channel partners that make the effort to achieve certain competencies through obtaining certifications tend to see an increase of two to three times in related sales. A stratified channel is a way to encourage partners to obtain their certifications in order to move up to a higher tier.
3) Collaborate with Your Partners
One of the things that Microsoft did really well was establish a Partner Advisory Board and then act upon the input they received. I was on the Microsoft Partner Advisory Board in the early 2000’s when we had a couple of meetings where we railed against the competition we were seeing from Microsoft Consulting Services. Microsoft made some significant changes as a result, and won a lot of partner respect.
Collaboration comes into play when you truly work together with your partner community to build a business. Partners have a tremendous amount of knowledge. Capturing and embracing this knowledge not only helps your partner community become more effective, but betters your organization as well. Creating an interactive partner advisory board establishes a conduit for this transfer of knowledge. Allow the partners to be honest about what they get and what they need from you. Allow them to tear apart what you offer them, but also consider what they are requesting. Then embrace it and deliver it. All parties win with this type of collaboration, but it should be conducted in a formal setting such as with frequent advisory sessions.
4) Enable Your Partners
One of Ray Noorda’s sayings was, “In mystery, there’s margin”. More than ever, VARs can only survive, let alone thrive, by clearly delivering “Value” to their customers. This entails helping them choose the optimal products and cloud-based services for their businesses.
Provide your partners with the ability to build a business around your technology. This includes helping them make sense of the new technical elements, companies and partnerships in the marketplace that make up these solutions. As an example, Nutanix is helping our partners capitalize upon our alliances with OpenStack, with various big data manufacturers, with data protection specialists, etc.
Effective training is key. Partners should be able to simply convey the value of your product to their customers. Any content or material that helps educate your partner base should be consumable in many formats and available at any given time. Text, video, audio, etc. delivered on-demand is critical.
5) Build Partner Loyalty
In my early days as a VMware channel partner, my firm brought a rep into a meeting with a new client we were targeting in Reno. I learned later that this same rep went back to the same client for a follow-up meeting with Dell. I raised Cain, and the rep was subsequently moved to another part of the organization. I was impressed with how quickly VMware acted to rectify the unfortunate situation.
The easiest way to build partner loyalty is to establish trust. Channel conflict is inevitable, especially if you sell direct as well. It is essential to clearly lay out the rules of engagement, and then always do what you say you’re going to do.