As the Partner Landscape evolves, where is the Channel Partner Relationship Managed?
It’s 2019! Do you know where channel partner relationships are managed in your organization?
For years, the answer to that question was: “Sure. In Channel Sales.” And it’s true that Sales still has the main responsibility for managing the channel partner program and its associated performance goals. But…an important channel partner relationship can be forged and found in product teams, marketing departments and other nooks and crannies throughout the organization. Evolution happens, driven by business necessity. Once relegated to a single, expert function, channel partner management has become a critical component of corporate DNA. And the results aren’t always what you hope for.
Companies aiming to leverage the full strength of all its’ channel partner relationships, need to take some time to answer this basic question first. Where is the channel partner relationship managed? After that, a few additional key questions should be addressed:
- Do we have all the channel partner relationship types our company needs, based on our current offer portfolio?
- Are all of our channel partner strategies aligned to the relevant business strategy?
- Are we confident that these partner relationships are managed well?
- Do we have a clear and consistent way to communicate channel partner value to the full organization?
- Do we have a robust set of partner management tools to complement and grow employee skill-sets and assure partner satisfaction?
Where to Begin?
A good place to begin to answer these questions is an “inventorying” exercise designed to categorize the channel partner relationship by primary function – solution, sales, service and influence. “Functions” are an ideal way to define channel partners because they provide:
- A common understanding of the value each channel partner type brings
- A solid rationale for channel partner selection
- An economic basis for channel partner program design and
- Dynamic and nimble “building blocks” for complex go-to-market systems that are required in geographies and markets that are difficult to penetrate.
The following “glossary” is a basic guide to help your organization take stock of its channel partner relationship types. Of course, most companies will have a subset of what’s described. And of course, the partner categories can and should be segmented further for optimum management.
1. Solution Partners
Primary Value: Develop and deploy solutions for customers. They drive usage of a vendor’s portfolio assets and assure and optimize interoperability.
- ISV/IHV – They have an application/product in the market and need to partner with other companies to create a more complete customer solution.
- Platform Partners – Companies that own and operate SaaS/PaaS platforms.
- System Integrator – Creates, integrates and supports solutions. May or may not resell.
- OEM – Includes vendor’s product/service as part of a private label offering or solution.
- Interoperability Partner – A partner who tests on vendor’s platform OR a market leader that the vendor needs to test on in order to assure technical compatibility and market acceptance.
- MSP/CMSP (Managed Service Provider/Cloud Managed Service Provider) – Develops and markets a hosted or cloud-based solution to customers using vendor’s infrastructure gear. May or may not resell hardware.
2. Sales Partners
Primary Value: These partners directly drive revenue growth
- Solution Reseller – Resells and supports vendor’s offer as part of a larger solution targeted at specified horizontal or vertical markets.
- Value-added Distributor (VAR) – Purchases directly from vendor, holds inventory and performs most of the logistics functions. Can also offer different types of value (such as reseller training and management, bundle creation, etc.) for a fee.
- Cloud Reseller – Resells cloud service for a vendor or for a vendor’s Cloud Managed Service Provider (CMSP).
- Sales Agent (SA) – Sells but does not take title. Some agents act only as “introducers;” others complete the sale. But all receive a commission.
3. Service Partners
Primary Value: Provide pre and/or post-sale support services to customers. In the CapEx model, they support the sale and drive revenue growth. In the OpEx model, they drive the majority of revenue.
- Authorized/Certified Service Partners – Multiple business models offering services sales to end-users:
Resell vendor-branded services
Add value on top of vendor services
Act as a sub-contractor to the vendor
- Business Services Partners
3PL (Third Party Logistics) – This is a company that provides logistical and fulfillment services to the market on behalf of the vendor. Does not take title but receives a service fee.
Financing – Provides financing solutions to partners who are building large, complex and costly solutions.
- Professional Services Partners
Training and Certification Partners – Provide training and certification services.
EPC (Engineering, Construction and Procurement) – Companies who bring large project expertise for complex, customized systems.
Consulting, Design, Procurement, Deployment – Companies that help enterprises move from CapEx to OpEx solutions.
4. Influencer Partners
Primary Value: They indirectly drive revenue growth.
- Government agencies – Set technical standards for their area of control.
- Organization and industry standards bodies – Provide industry standards and influence industry evolution.
- Developer Community – Community or association of developers.
- Open Source Community – Network platform that provides open source code under corresponding license agreement.
- Academia – Academics, research, engineering and industry opinion leaders
- Industry Analysts – Industry experts or research companies that follow, evaluate and rank offerings of multiple vendors.
Once you have mapped your organization’s partner categories, the next step is to make sure everyone is properly managed. Not everyone is – or should be – managed via a formal channel partner program.
Five basic ways to manage these different Partner Types
The options you choose will depend on factors such as industry convention, relative vendor/partner power and degree of homogeneity of channel partner business models within the segment. The following are some typical management structures:
Channel Partner Relationship Management Options
Formal Program Support
|ISH/IHV, Platform Partners, System Integrators (SI’s), Cloud Resellers, MSP/CMSP (post offer commercialization), Solution Resellers, Value Added Distributors, Authorized and Certified Services Partners, Planning, Design, Procurement and Deployment Partners|
Formal Support (ex. policies, processes and people)
Developers, Sales Agents, Engineering, Procurement and Construction Companies, Interoperability Partners
|MSP’s/CMSP (pre offer commercialization), OEM’s|
Service Level Agreements (SLA’s)
|3PL’s, Training and Certification Partners, Financing Partners|
Marketing and PR Initiatives
Companies looking for ways to consolidate this wealth of partner value into an asset base that can be leveraged by the whole organization, can look to Channel Mechanics for help. Their robust tool is designed to manage channel partner programs across a broad spectrum of partner types. Additionally, the tool can help with partner profiling, which is essential for a full, company-wide view of all channel partner relationships and for further segmentation.