By Wayne Monk, Senior Vice President, Alliances and Channels, ASG
For most enterprise tech companies, channel partners are critical to their go-to-market strategy. A strong partner network is an effective means to scale the reach of a direct sales force – and sometimes so effective, businesses choose to go 100 percent indirect. Of course, it’s not just the expanded sales power that makes the channel important to tech vendors. With the right channel strategy, partners will also deliver increased value to a vendor’s customers. The question becomes, not “why the channel?” but “how to choose the right channel partners?”
Choosing the right partners is an important part of building a business’ channel strategy because an effective channel requires a significant investment in their time and resources. Many companies make the mistake of building a large, but ineffective channel network. Instead they should consider building the strongest network by evaluating potential partners up front using the “Four Cs” criteria.
When evaluating a potential partner, it’s imperative that a business consider the commitment to winning in the market it desires to address. Is the potential partner making the necessary investments in marketing and sales to grow market share? Does it show a true commitment to the business?
To weigh the potential partner’s commitment, a business should look at the investments it has made to attack the market segment, relationships it has with other industry vendors and history it has serving and delighting key clients. Is the prospective partner willing to build a business plan with clear objectives and supporting go-to-market activities to build sufficient awareness and demand?
A partner may prove that it is fully committed to the market, but does it have what it takes to help a business achieve its objectives? Before even engaging in a discussion with a prospective partner, an organization should understand its own business goals and what’s needed to achieve them. Does it want to get in front of a new demographic? Launch a new innovation and/or unique service offerings? Drastically drive sales? Does it need specific vertical expertise to layer on solutions?
Whatever the goal, an organization must clearly articulate what it wants and ask the prospect how it plans to help. The prospect should be able to demonstrate the technical know-how and credibility needed to win in the market, outlining specific strategies based on deep market expertise.
Once a prospect has proven its commitment and competence, the business needs to evaluate the prospect’s market coverage and reach. Questions to ask might include:
- What is your sales capacity? Are sales team members field or inside sales representatives?
- Where are your sales resources located?
- How many customers do you have? What percentage of your customers are active vs. dormant?
- How many prospects are in your marketing database? When was the last time you used it?
- Do you have a dedicated marketing team? How large is it?
- What are your target market segments? Are they helping your reach new customers or buyers?
By asking smart, comprehensive questions, organizations can quickly confirm whether the prospect has the reach needed to expand their business to meet sales coverage and revenue goals.
The final criteria a business needs to consider when evaluating a potential partner is its capital. We’ve all heard the expression, “It takes money to make money.” This tends to hold true when it comes to successful partnerships. And as we now know, organizations need to ensure their partners are as committed to success as they are. To ensure prospects can follow through on their commitment, businesses should understand their partner’s capitalization and current financial state. Most importantly, are they willing to invest to achieve growth and sustain it?
If a prospect passes the “Four Cs” test, an organization has likely found itself a highly valuable partner. The ultimate measure is that the prospect must pass at least three of the Four Cs with Commitment being the Big C (aka, a must have). If a partner is not committed to winning in the market, a company should quickly move on to the next partner.
That said, it’s important to hold the partner accountable for all that it said it could achieve. At the onset of a relationship, the vendor and partner should agree on a set of success metrics (e.g., the number of new customer wins or expected services revenue) and conduct quarterly business reviews to ensure success.
By tracking partner performance against success criteria, a vendor may even find that it can strip away other partners that are no longer delivering value. For instance, if two of the new “Four C” certified partners are enabling the company to exceed its growth goals, that company may decide to double down and work exclusively with those two partners.
When it comes to successful channel partnerships, quality outweighs quantity. And when vendors select partners based on the “Four C” methodology, they are almost always guaranteed quality and strong partner contribution to their business.
Wayne Monk is the Senior Vice President of Global Alliances and Channel Sales for ASG Technologies. Wayne has responsibility for overall channel strategy and establishing strategic partnerships, indirect channels and other routes to market to enable ASG and our partners to accelerate their growth and exploit new market opportunities. Wayne has 30 years of enterprise solution sales, marketing and channel management experience working with high growth technology companies. He has been fortunate to see all sides of the channel through senior management experience with global systems integrators, business partners, cloud / managed services providers and OEMs / technology alliance partners. Add to that, a unique blend of sales, marketing and technical expertise and Wayne is able to bring solid business experience to help lead organizations and partners to new heights. Wayne holds a BS in Computer Science from Virginia Tech. He resides in Herndon, Virginia with his wife and has two children.