Looking to grow sales, many tech vendors in today’s tough economy have shifted their focus to enhancing partner efficiency. Broad partner investments do help create marketing and sales leverage, but our experience finds that targeted investments in specific partner opportunities have the potential to yield much higher investment returns.
The big question for technology vendors is, how do we do a better job targeting our partner investment to grow sales?
We find that vendors typically fail to optimize their partner spending because they fall short in one or more of the following five areas:
1. Developing Partner Visibility
As vendors evaluate potential partner investment strategies, poor visibility greatly hinders decision-making ability. Most vendors have some form of partner intelligence, but often struggle to develop a comprehensive view of the partner across all vendor touch points. Vendor visibility can be improved with dedicated account coverage, but that improved visibility also comes at a lofty cost. A more sustainable approach is to motivate partners to share more data with vendors based on a solid understanding of benefits accrued due to shared business intelligence. Take a balanced approach to create visibility that is not only scalable and sustainable, but most important, actionable.
2. Understanding Partner Capacity
With a direct sales force, companies are able to study and design their sales organizations to optimize sales capacity based on their forecasts. When selling through partners, vendors have a much harder time understanding and evaluating partner capacity. For example, if a vendor distributes leads to partners, there is often no sense of which partners have sales resource capacity to pursue new customer opportunities or fulfillment capacity to ensure successful outcomes for the customers.
Vendor opportunity and partner capacity may vary widely in each market. It’s challenging for vendors to keep track of partner reach, especially as a partner’s coverage spans many geographic regions and products or solutions. However, vendors that are able to understand their partners’ capacities by geographic coverage and areas of specialization can better support their partners as they pursue, win and fulfill opportunities.
3. Improving Partner Capability
Most vendors have partner training and certification programs to educate and enable partners on key products and solutions. However, vendors often fail to collect enough information and fail to develop a comprehensive view to make relevant decisions such as which partners should be targeted to launch a new product or service, or which partners would most benefit from a particular program or training. Understanding partner capabilities also ties in with partner capacity planning to determine which partners may be the best fit for specific situations.
4. Measuring Partner Program Impact
Many companies still struggle to trace sales back to their sources. Even more difficult is the task of trying to understand how various elements of the partner program may be influencing a partner’s sales growth and partner loyalty. If a vendor cannot determine what investments and program benefits are paying off (and how well), it will struggle with making efficient investment decisions, for example, when to expand program budgets or when to reallocate them.
5. Building Partner Loyalty
Just like customers, partners can be fickle, and a vendor may see tremendous variation in partner loyalty. Partners may range from being completely centered on a vendor’s business to merely keeping abreast of latest developments as they champion a direct competitor’s products. Vendors need to develop a better sense of partner loyalty to ensure they are investing in their most loyal and profitable partners.
The good news is that I know that all these challenges can be overcome by building upon existing partner knowledge and developing a more comprehensive and actionable understanding of partners’ business in a scalable way. In this series of blog posts, I’ll further illustrate these challenges based on our experiences working with technology vendors and explore how companies are enhancing the value of their partner investments and growing sales in this challenging economic environment.
About the Author
Leon Wei is a Consultant in ZS Associates' San Mateo office. As a core member of ZS's High Tech Practice, he has advised the firm's technology clients on a wide range of sales and marketing issues. Leon holds a B.S. in Electrical and Computer Engineering from Carnegie Mellon University, an M.S. in Management Science from Stanford University and an M.B.A. from the Haas School of Business at the University of California at Berkeley.