Businesses today have complex technological needs and serve more expansive and disparate markets than ever, which means partnering can be an important strategy for mutual success. This is certainly good news for solution providers, but it is important to keep in mind that not all partnerships are equally set up for success.
In the case of vendor-channel partnerships, profitable partnering is the result not of just finding the right business to work with, but also implementing careful, thoughtful strategies and seeing them through. The following six steps will help you create productive, profitable strategies.
1. Understand the organization.
Before partnering with a company, it’s important to understand its management structure. Within any company you will find an executive team, a board of directors, and departments for sales, marketing and legal. They’ll all have their own perspectives on what value your solution is bringing. Though your interactions will probably focus on certain areas — the C-suite of executives and sales and marketing teams more often than the board of directors — understanding the internal mechanics and politics of an organization can help you decide where to devote your energy, where to seek buy-in and what factions work in favor of your interests.
Learn each individual’s role in the managerial hierarchy and what that person’s expectations are out of the partnership.
2. Think like a vendor.
Just like you, vendors are interested in pursuing paths that are going to be the most profitable for them. Think of the partnership as a way to facilitate that. Each individual in an organization’s management structure may have a different take on the importance of channel partnerships. Those who work closer to the channel and directly manage partner relationships may have a more favorable opinion than those who have a hands-off role. The 80/20 rule, which states that 80 percent of the revenue comes from 20 percent of the partners, may color vendor opinion. Anticipate these concerns and try to place yourself as a top performer. A vendor will want to see a proven track record, and there are a range of performance indicators you can use to supply vendors with hard data of your sales success.
3. Work the partner programs.
Vendors may set up partner programs to certify partners who reach certain goals, and give those certified vendors certain benefits and competitive advantages. Be aware of these types of incentive programs and their requirements and use them to your advantage.
4. Manage conflict.
When dealing with vendors, conflicts can arise between direct sales and channel sales teams. Be aware of the rules of engagement (ROEs) that the vendors with whom you are working have defined to manage channel relationships. ROEs should provide guidance and promote healthy partner relationships by defining internal and external roles clearly.
5. Align roles.
Engaging in sound business practices will make vendors thrive and set you up for success in the channel as well. It is in your interest not just to assess the way a vendor you are working with is set up, but to create parallel structures on your side. Have point-people specifically dedicated to dealing with a vendor’s different departments: sales, marketing, management, product development and technical support. Rather than a free-for-all, deploy your resources strategically, with your sales team on board with the needs and expectations of the vendor’s sales team, and so on.
6. Evaluate the partnerships.
Evaluate the quality of your vendor partnerships by looking at all of your contracts and identifying which are the most important. Then create a system to rate them, and determine what kind of action your rating system will inform. Remember to have your staff in all areas evaluate and rate these relationships to get the clearest perspective possible.
CompTIA offers a number of business transformation strategies for solution providers. For an in-depth, step-by-step breakdown of the managerial hierarchies to expect when engaging a vendor; common KPIs vendors use to manage channel productivity; tenants to look for in a vendor’s ROE; and more, explore the CompTIA Quick Start Guide to Profitable Partnering.
Kelly Ricker is senior vice president, events and education at CompTIA.
