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Managing Multiple Channel Models

10.10.17

Finding Organization Among the Chaos Rubik's_cube.png

Channel partner programs used to be simple: Resellers were VARs and System Integrators were SI. Each had their own programs with lines that were not crossed. But today we have VARs, MSPs, CSPs, SIs, agents, consultants, solution providers and others that can’t be labeled, and few fit neatly into any particular channel partner program.

Today’s channel partners wear many hats, by choice, and expect their vendors to support them. Vendors, however, are wondering how they can support partners they can’t put a name to.

 Chaos is becoming the new normal in the channel.

 How, then, can vendors manage multiple channel partner models? They realize they must—and do it well—since the channel is a major revenue-generator for many companies. In fact, one-third of vendors taking part in our 2017 State of Partnering study reported more than 50 percent of their revenues are driven by their partners, and 75 percent expect their channel-driven revenues will rise. Partners are becoming more important to vendors’ revenue stream, as well as customer satisfaction and market reach, so vendors can’t afford to have unhappy channel partners.

 How vendors can approach a multiple channel model strategy was the topic of conversation during our most recent webinar. Darren Bibby, AVP of Channel Strategy at DocuSign and former VP of Channels and Alliances Research at IDC, joined me as we tried to untangle some of the knotty mess that some channel programs have devolved into.

 On average, channel partners classify themselves in 2.6 different ways, according to the 2017 SOP study. Is it even possible to create programs that are a good fit for every partner? Partners say it’s better for their relationship if they can engage with their vendor partners in a way that aligns with their business model, be it reselling, referring, developing their own intellectual property or what-have-you.

 Life would be great if there was a simple way to address multiple channel partner models, but “sometimes simple isn’t possible,” Darren said. “So the goal isn’t simplicity; the goal is to be really well-organized.” It’s OK for a vendor to have five or six ways to engage partners as long as there are clear engagement paths.

 “If you want completely simple, you’re not going to have flexibility. And if you want flexibility and tons of choice, then it’s going to be complicated because each situation is different. But you have to find that right balance,” Darren said. “Partner programs have to respect that one partner is doing 2.6 things with their company.”

 Most vendors segment their partners by type, but perhaps a better way is by segmenting them by role. In that way, vendors can address multiple engagement models and start thinking about their partners in terms of the verb (resell, refer, consult) rather than the noun (VAR, MSP, agent). Approaching the issue from that perspective could help vendors better understand their channel partners’ needs and expectations.

 But then, are fully fleshed channel partner programs even the way to go? Instead, would it be possible to institute a partner program framework on which certain tools and benefits are hung, such as deal registration or marketing collateral, then have a list of pre-set “components” from which they or their partners could select to create a customized channel partner program? This model could go a long way in helping relieve some of the growing pains of addressing the needs of an evolving channel community through a selection of vendor-created options.

 Of course, the challenge here is for the vendor to manage a nearly infinite number of combinations, depending on what benefits a partner selected.  Automation tools like partner portals and Partner Relationship Management (PRM) systems help to manage this complexity, but no system has been able to manage this type of program individualized for each partner.

 “Everyone is trying to find a way to get to the verb,” Darren said. “Activity is the goal to organize.”

Want to hear the whole discussion?  Listen to the webinar recording here:

Watch: How to Manage Multiple Channel Models

Topics: Featured, Channel Best Practices

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