In Part 4 we examine the subject of partner competition. Here we ask the question, what is the importance and significance of other vendor’s relationships to the partner and is there a possibility for channel conflict?
At Junction we have developed an approach called Channel Activation. Channel Activation is designed to build long-term business relationships between a vendor and a technology partner (reseller). Executed well, it delivers planned, measured and successful commercial partnerships.
In a series of blogs I will examine and explain our ‘10 Step process for Channel Partner Success’ (CPS). This process helps to build success in the activation of channels for both new and established vendors seeking to attract new partners to new and existing segments of their portfolio.
Let’s discuss the answers to my question re: partner competition in the following three steps:
- What is the importance and significance of other vendor’s relationships to the partner? As in Part 3, we need to understand the size of the prospective partners business. Will the introduction of another vendor affect their current business revenues? Will they be able to achieve the revenue targets in Year 1? We also need to consider if their existing vendors will try to create a level of competition within the partner to maintain their current levels of business. Vendors might try to engage existing partners, looking at new partnerships, with a series of new incentives, social or sporting activities and reward programs. These could include actual recognition awards in the hope of slowing down momentum with the new vendor. All these scenarios need to be addressed and have a planned response in order to determine if the partnership is viable and worth the time, resources and overall effort to get up and running.
- How can a new vendor gain the attention of the sales team? New vendors need to think of creative and different ways to entice sales people to consider their solutions and actively promote and present them to their prospects and customers. It’s not just about promising an Amazon voucher if they complete the free online training and then start selling their products. The salespeople need to believe in the products and solutions and have the actual business benefits of the solutions demonstrated to them in a real life working environment that can provide tangible and realistic business benefits. These types of scenarios can be run offsite and be followed by a memorable activity like a Jonathan Palmer Race Day.
- What is the potential for channel conflict? The challenge for vendors of attracting & reaching new partners is that there is always a potential for channel conflict. Established and loyal partners may feel that larger global or multinational partner organizations sign up with a vendor and then target the existing installed base rather than creating their own customers. The reason vendors sign up new partners is to expand or diversify their installed base, not to cannibalize the existing customers and drive down margins on existing deals. Vendors need to be strong and outline the rules of engagement early on in the onboarding process to avoid this situation. It is often the mid-tier partners that have a solid established business with an excellent selection of customer names and references who are the ones overlooked by vendors when they are trying to increase market share and penetration. Recruitment of new partners is not always the only way to grow your revenue.
In summary, the lure for a vendor to recruit as many new partners as possible needs to be accompanied by a measured and planned approach. Follow the three steps above to ensure that as a vendor, you have taken the correct steps in the process for Channel Partner Success.