Converting your Channel Concept to an Action Plan
Years of IT experience and a track record of success have brought you to this point. You’re organized, smart and determined – you welcome new challenges, and this certainly qualifies.
The Executive Team, of which you’re probably a key member, recently met and decided that it’s now time to add an Indirect Channel Sales revenue stream to the corporate mix. In the meeting it probably sounded more like – “So, we’re agreed – let’s get some VARs to sell our stuff.”.
You’re picked, the honor is all yours. A smile flashes, barely masking the heavy sigh.
Sure, you’re the only person in the room with “Channel Experience”; but, it’s a big leap from a dotted-line reports connection with an established ISV and their mature partner program, to a small emerging software company with tall hopes and a short budget.
At this moment, this very moment, the voyage begins. The “Concept” needs to become a reality. Everything you do from this point on will affect how long it takes, how much it will cost and how successful you will be. Every moment you spend doing the wrong thing or drifting off into the wrong direction will take time and resources to correct; so, let’s take care to avoid misdirection and unnecessary budget pokes. Because I guarantee you, your budget is already too small!
In my intro to this series, Channel Exec’s Survival Guide, I stated that – ” …misconceptions, unrealistic expectations and failure to understand your partner’s motivations” were more destructive to your channel’s potential than the partners themselves. Let’s examine that a little closer – and, it will only be a little closer here, because we’re taking a deeper dive on these failure points next time.
The belief by most emerging technology ISVs that there’s a world full of resellers eager to sell their product is naive and disproportionate to the reality. Another misconception is that if you just increase the discount (margin) you can make any reseller swoon. Wrong, and expensively wrong!
If you were to go forward with these types of misconceptions and failure to understand your future partner’s nature, you’re following on the same path as all failed channel programs before you.
I’m beyond being surprised when a brilliant software developer, now CEO of his own company, tells me about their failures in recruitment, lack of partner sales and marketing involvement and lead generation. Often these are successful resellers elsewhere, so – what’s going on here?
That’s what this series is all about, to help you see through the fog of confusion and peer into the cash register soul of the reseller. Because, trust me – they are coin operated, but the slot’s not where you think. Helping you find your way, avoid the hidden obstacles and navigate the buried landmines is top of my list.
I’ve walked this path, I’ve run and bicycled this path – I know where the pitfalls lie and I’ll be pointing them out as we move along.
Charting our course:
In the below Channel Timeline I’ve identified the process we follow to guide us towards a successful (self sustaining) Partner Program. As you’ll see, we have a series of parallel and overlapping functions; and, each function has a series of embedded activities that we’ll scrutinize in greater detail going forward. The timeline, noted at the bottom of the chart, provides a reasonable baseline to measure your progress.
As we step down from the Concept level, we enter the planning phase of the partner program life-cycle. In the upcoming multi-part section we’ll explore the critical factors that make up a successful Channel, reaffirm the partner hot buttons and do my best to erase your mind of any common misconceptions.
One of those common misconceptions is that resellers engage with vendors on the strength and elegance of the solution – and, that’s very rarely the case.
Other, weightier factors they consider include; company and product maturity, location of sales staff and support personnel, documented successes – case studies, relevant differentiators, alignment with their recognized area of expertise; and, affinity (integration/APIs) with other products that constitute their core competency. One key determining factor I often hear during the prospecting process is: “What can I expect the 1-year profitability to look like after meeting all of the vendor’s goals and commitments?”
For this last question, The VAR-City has created a Partner Profitability Calculator that we share with the prospect during the recruiting process. These are custom made spreadsheets that allow the prospect executive(s) to plug in forecasted sales data, margin and service dollars to project, for themselves, what the relationship would deliver per sale or over the period of one year at goal (quota).
Previous sections in the Channel Executive’s Survival Guide Series:
- Introduction: A Channel Building Schematic