Want to Increase Sales via Your Alliances and Channel Partnerships? Simple. Do This…
Friction between software vendors and their partners (VAR, SI, ISV) are all the impediments that prevent a partnership from reaching its full potential. One of the best ways for a software vendor to improve engagement with partners and get them to sell or promote more of their product is to reduce as many sources of friction as possible. Make it easy to do business with your company. In my experience, most partnerships that fail to deliver on expectations are the result of poor execution. Signing a partnership agreement and sticking logos on websites is less than 10% of the work. The other 90% of the work is the ‘heavy lifting’ required to make the partnership successful.
Two of the biggest sources of friction between a software vendor and its partners are…
1) Inertia - how challenging and how much effort is required by value added resellers (VAR) to resell the software and/or how difficult is it for systems integrators (SI) to sell associated professional services
2) Channel conflict - how much and how often is their competition between a partner and the software vendor’s direct sales force and how much and how often is their competition between partners.
These are the simplest ways to reduce inertia and channel conflict;
1. Make it easy for partners to do business with your company
When a sales rep at one of your partners has 125 different products and services they can sell which ones are they going to remember and focus on? All other things being equal, such as similar gross margin and comparable product functionality, sales reps will default to the products that are easy to sell. Making your software products easy to sell for your partners has 2 important dimensions;
Pull-through sales and marketing are any activities that the software vendor undertakes resulting in the customer demanding your software from the partner.
Pull-though is the antidote for partners who would otherwise act agnostic on a deal-by-deal basis.
For example, a large SI may have multiple partnerships with competing software vendors. Their goal is to win the project and it may be irrelevant to them which software solution is chosen by the customer as long as they get the professional services business. If the customer has already made a buying decision or they are heavily inclined towards buying your software solution it makes the partner sales rep’s job significantly easier.
b. Turnkey Sales and Marketing
There are many different ways you can make it easy for a partner to do business with your company. You definitely want to be responsive to partner requests and supportive during sales cycles. Another way to make it easy for a partner to sell or influence the sale of your software is to give them ALL the sales and marketing content and tools necessary to sell your software.
Going back to our previous example, if a partner has 125 different products and services they can sell which ones are they going to remember and focus on? Providing turnkey sales and marketing - sales tools, collateral, marketing strategy, sales training etc… is a great way to differentiate from other software vendors.
2. Minimize channel conflict
Nothing poisons a partnership between a software vendor and their partners faster than channel conflict. This could be a sales team at the software vendor competing with a partner or multiple partners competing for the same customer. Either form of channel conflict creates bad blood and sours relationships. Again, if the partner has 125 different products and services they can sell, they will not bother to sell a product that they have had channel conflict issues with in the past.
It’s nearly impossible to avoid all channel conflict without collusion, which is illegal in most jurisdictions. But it is possible to minimize channel conflict with market mapping. You want to steer partners to focus on particular markets so they don't trip over your direct sales team and they don't trip over other partners.
It’s a common mistake to sign up as many partners as possible without carefully considering strategy and mapping where these partners should focus. Eg. industries, geographies, accounts, types of buyers, use cases etc…
Your market mapping may look something like this (see below). Make informed decisions about recruiting partners to fill gaps or where a partner would add significant value and enable more sales in a particular targeted industry.
Signing a partnership agreement is only one small step of many in the partnership development journey. Removing as much friction as possible between software vendors and their partners is one of the best ways to maximize partnerships and increase sales.
About the Author: Bryan Socransky is the Principal Consultant of Disruptive Consulting Group. Bryan's experience spans over 25 years in some of the most competitive B2B sectors including enterprise software and SaaS. Now he is applying this experience to help enterprise software, SaaS & IT companies grow via Partnerships - Channels & Alliances.