While traveling I was reviewing a white paper we developed on one of the most common topics I am asked about ---how do I activate the other 80% of our channel partners while still focusing on my top performers (20%)? Usually this is followed by additional comments and questions related to:
- Channel Sales Strategy: I focused the design of my organization to maximize the return from the 20% that are driving 80% of my business. Now more than ever I see opportunity as well as risk in the remaining 80%. How can I most effectively engage this group given current organizational design and competencies?
- Expanding Into New Markets: For my business, expanding into new markets means a new set of business partners. How can I possibly execute the launch of a new partner channel given my current organizational limitations?
- Partner Channel Value Proposition: I have a good feel for our end customers within the 20% of the channel segment I cover, but I feel very disconnected from the segments in the remaining 80%. Sales are not the only benefits I should be evaluating when reviewing partner channel performance –are there other benefits I should be expecting?
Growing channel partner effectiveness is critical for business growth. Many organizations have even lowered the barriers to signing up new resellers and now proudly boast hundreds or even thousands of business partners. However channel expansion has come with consequences. Organizations, in an effort to prioritize their activities, have struggled to maintain the right level of engagement with all their partners –often focusing the time of their organization on the top performing relationships (usually the top 20%).
The remaining 80 percent of partners are largely neglected and left to a self-service type of relationship. This often results in poor brand representation, lower first recommends and ultimately low sales performance from this segment of the channel. Ironically, if you combine the potential within the rest of the partners (the 80%), there is often more business opportunity (as well as market intelligence) that you will be able to glean from these other partners (if activated correctly) than your top 20%.
In an effort to help those looking for answers in these areas, I have created the chart below and provided some jumpstart recommendations to get you started. The answer to these questions is largely dependent on your company situation, but I hope this helps you begin to wrap your arms around what you can do to improve your current state.
Questions
Notes and Jumpstart Recommendations
Channel Sales Strategy: I’ve designed my organization to focus on the top 20% of my sales channel. How can I best take advantage of the growth opportunity in the remaining 80%?
1) Partner Maturity Scoring. Utilize a partner maturity scorecard with your top 20% to find the segment partners that do not need the same level of support as they may have when the relationship was new. This will allow you to refocus some of your resources on the remaining 80%. You can find some of the elements of a maturity scorecard within my earlier blog.
2) Segment and Create Profiles of the 80%. Before your organization begins building relationships within the remaining 80%, beware that this will not be business as usual. This group is delivering disproportionate performance for a reason. Are some of the partners small and giving you all they’ve got? Are some of your partners’ business models misaligned with your core market segment minimizing the opportunities they will surface? Are some opportunistic and not proactively driving your brand? Are some doing business largely with a competitor offering great opportunity to grow share? Digging in, segmenting this group, and getting a handle on these partners will allow you to take targeted and highly effective actions.
3) Outsource: These firms specialize in channel engagement models and give you a step-by-step guide on how to handle this internally or come with the talent, tools and processes that will allow you to get the most out of your channel. They can often provide different mechanisms of coverage for different segments of the remaining 80% providing you with the greatest ROI.
Expanding Into New Markets: We can barely manage our current channel partners --how do I implement a sustainable channel partner recruit/activate/enable program that allows me to expand into new markets?
1) The points raised above under channel sales strategy are relevant here as well.
2) If you opt to leverage your own internal resources be sure to recognize that the tools and processes required to launch a new sales channel are different than what you may be leveraging today for driving performance in your top 20%.
3) Simply shifting current activity to reach out to prospective new partners may impact your current operation and leave you short of your goals on new channel activation.
Partner Channel Value Proposition: I know sales are not the only benefits I should be evaluating when reviewing channel partner performance –are there other benefits I should consider?
1) Partner relationships offer much more than just revenue in your pocket –they offer market insight, key local/regional connections…the list goes on and on.
2) Collection of these insights is easier in your top 20% because of the comparatively intimate relationships you have with the partners in this segment
3) The remaining 80% offers a different challenge and reaping channel intelligence from this group requires a unique approach. Due to the segment size and variation, specific tools and processes are required to get the greatest value across you entire channel.
I hope this post has helped you begin to evaluate solutions to common questions about channel partner management. I of course welcome your thoughts and, if there are any topics you’d like me to cover in this series of articles, please let me know.
Until then, if you would like a copy of our whitepaper just send me a direct message.
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