• Effective Partner Recruiting in Four Fundamental Steps

    In today’s economy, companies are looking for ways to save money and do more with less. So why would you engage in actively recruiting more partners? Shouldn’t you spend your efforts at pruning your existing partner base to decrease the amount of time spent on your channel programs? Or pruning channel program benefits to save money? Focusing on your existing, performing partners seems like an obvious way to reduce channel expenses.

    But have you really defined who your top partners are, beyond just YTD sales volume? And are they the best partners for your long-term channel strategy? Or are they only the best partners currently in your partner program. Having an effective, long-term partner coverage and capacity plan drives the ultimate success of your partner program. Recruiting partners will be a continual activity within that plan.

    Applying the proper process to partner recruitment is a powerful and important first step to determining how indirect channels play a role in your customer reach and influence model. This is true regardless of whether you are recruiting new partners or requalifying your existing partners. The real purpose of recruitment for most vendor programs is to identify and establish a long term business partnership or to maximize the opportunities created by ad hoc relationships.

    We know from the annual Amazon Consulting State of Partner Programs studies that partner recruitment continues to be a challenging issue facing many vendors. Providing effective field support and coverage along with conducting partner coverage and capacity planning are also key issues facing vendors. These issues, of course, ultimately impact recruiting strategies. In 2009, effective partner profiling and recruitment were the biggest priorities for vendors in enhancing their channel development strategy and program (Figure 1).

    Why Are You Recruiting?

    1. Identify the Problems You’re Trying to Solve

    There are many reasons to engage in partner recruitment. It may be part of your normal partner program activities, or you may have identified a new and unique situation requiring recruitment. Let’s look at some typical scenarios that provide the catalyst for new partner recruitment.

    Recruiting Scenarios

    Deal-Driven – A vendor may have uncovered an end user opportunity which needs to be delivered through a channel partner. If the vendor does not have a direct fulfillment channel, and there is not an obvious channel partner to present with the lead or opportunity, then a partner must be identified from the existing partner base or a new partner must be recruited to fulfill that opportunity.

    Market-Driven - Many vendors with direct field sales resources are not staffed to fulfill every end user opportunity. Yet the direct fulfillment arm may indentify end user opportunities, say in the SMB space or in a particular vertical market, which is better addressed by a channel partner than by the vendor directly. Again, a partner must be identified from the existing partner base or a new partner must be recruited with the right expertise to address that opportunity.

    Geography Driven – Based on the geography of the end user opportunity, the end user may be better serviced by a channel partner than the direct sales force. Depending on the accuracy of the vendor partner locator, and the level of detail captured about the geography adequately covered by partners, there may be a gap in coverage, and a new partner needs to be recruited.

    Program Growth – Often, vendors measure the success of their partner program by the number of partners enrolled. This is more often the philosophy of new partner programs. However, it is still seen as a measure of the maturity of the vendor partner program to have a significant number of partners enrolled, as opposed to a measurement of the quality or productivity of existing partners. Therefore, vendors can be on a recruitment drive to enroll new members just to increase the partner community breadth. If a vendor has outsourced some of the recruiting activities to a third party, that entity may target and profile the proper partners or may also drive volume over value in recruiting. They may simply market to their database of partner contacts to drive enrollment in a partner program. Or partners may be recruited in response to an online sign up request for more information regarding the partner program.

    New Products - When vendors introduce a new product or product line, often partner recruitment is part of the overall marketing program. Therefore, a call goes out to partners determining interest in the product line and recruitment for the program. Or with an acquisition or merger, there may be gaps in the quality or quantity of partners desired to support that new technology, and hence partner recruitment begins to fill gaps.

    Competitive Skills - If there is encroachment from a competitor, or perhaps the vendor has its sights set on taking market share from a more successful competitor, then partners are often targeted and recruited based on their enrollment in the competitors’ program.

    Consider these scenarios from a partner’s perspective. When the partner’s phone rings and there is a discussion regarding an enrollment or opportunity, which scenarios are most likely to lead to a long mutually successful business partnership and relationship? Each of these scenarios may generate a new partner recruitment conversation. If that is the measure of success, then recruiting is not difficult. However, since the real purpose in recruitment is to identify and establish a long term mutually beneficial business partnership then some steps have been omitted in these scenarios that will increase the success rate of recruitment.

    Current Recruiting Environment

    Most vendors today are focused on the quality of their partner ecosystem rather than just the quantity of partners signed up for their program. Partner programs are being tailored to expect partners to add value in the sale and services delivery process, and very often measure and reward the partners’ success in doing so. With the current focus on efficiency and enhancing sales productivity, recruiting is a key element in determining the highest quality partnerships with the greatest return of value for a channel program investment.

    In this economic climate, vendors are forced to reevaluate their spending on both direct resources and channel programs. Channel programs come under increased scrutiny for increased sales and decreased costs. Reducing cost of sales often swings the pendulum toward a heavy reliance on channel sales to maintain or scale top line revenues. With the overlying blanket of a deep recession looming, more vendors will be approaching partners to extend their reach into markets such as SMB at a lower cost than direct sales. Partners also offer the added benefits of reaching specialty markets, or delivering certain levels of technical services.

    The current trend points to vendors requalifying partners, adding more technical requirements and being much more selective about the partners they recruit. Performance expectations and associates rewards have become a lot more stringent in many channel programs. The Channel Insider 2009 Market Pulse study indicates that partners see adding new vendors as a key driver for sales growth in 2009 (Figure 2). In fact, 85% of partners indicated that adding new vendor lines in 2009 was “somewhat/very likely”. On average, this data also suggested that partners would add 2.8 new vendor lines in 2009.

    From nearly 11 years of working with vendors and their indirect channel programs, it’s the observation of Amazon Consulting that in order to effectively recruit partners toward the objective of creating a mutually depending, long-term relationship, there are four sequential steps that should be followed. They are detailed below:

    1. Have a Plan

    2. Start with the End in Mind

    3. Use the Right Tools

    4. Create Accountability

    So, let’s now explore these steps individually and talk about how they are being applied by other high tech vendors.

    Having a plan before recruiting certainly sounds like an obvious step. But how many of the scenarios described earlier in “Why Are You Recruiting?” occur every day without adequate pre-planning? As we go through the stages of successful recruiting, we’ll see that if a key step is omitted, then your chance of a long term mutually beneficial relationship is diminished.

    Your plan should begin with an analysis of the desired coverage model and capacity from your indirect channel partners. Start with the realistic market opportunity requirements for your partners; only a fraction of the total addressable market is achievable. Setting the proper percentage of attainable revenue market share is a foundational element in establishing your coverage goals.

    Do you have a current and accurate assessment of your existing active partner market coverage? We find many vendors rely on the self-reported partner portal or partner locator profile information to assess their current coverage and capabilities through partners. But if you review the actual data within most self reporting partner identification tools, you’ll find the data woefully inaccurate and out of date. Many partners exaggerate their selling scope when joining partner programs.

    They indicate a greater geography than is realistic. While it’s true today that most partners can fulfill orders nationwide in the USA, or even internationally, how many can actually service and support those same customers in their identified locations? An accurate and current assessment of the true coverage and capacity of your partner ecosystem is the first step to creating your plan. In creating this plan, you should evaluate two separate and distinct elements: coverage or market reach and capacity.

    Creating a matrix of actual verified sales, technical and services capabilities of each geographical location will eliminate the exaggerations of self reported capacity.

    This overall assessment is one of several activities that is appropriate to consider outsourcing to a third party. However, the coverage and capacity of partners that are directly covered by your field channel sale force should be the nucleus of this data, and reporting against it should part of the ongoing objectives of any channel sales manager’s job description.

    The next stage is to define your specific needs by product and by region. Going back to the core question, “What problem are you trying to solve?” will drive the specificity for this stage. Create concrete and measurable objectives to develop a real coverage model by geography or product or service (or a combination) that fits your problem or opportunity. Setting a goal of enrolling 50 new partners is simple, but how does that solve your problem of utilizing the extended sales and service capabilities of your partner ecosystem?

    To differentiate yourself in a ‘buyers’ market for partners, ensure you have clearly defined coverage and capacity in your channel program model by completing a field coverage analysis.

    To be successful with recruitment, start with the end in mind. This stage requires identification of the characteristics for the partner you are going to recruit and examines the specific metrics around which you will evaluate the partners ultimate performance, both short and long-term.

    After completion of Step 1, you should know your specific purpose for recruiting partners. The output of Step 1 will guide the process and details of Step 2, but each activity in Step 2 is independent and necessary regardless what need is driving recruiting. At this stage you will know what gaps you are trying to fill in coverage or capacity and can start to craft the plan to execute the recruitment.

    The first activity is to clearly identity the target partner profile. An in-depth recruiting plan can contain as many as 20 to 25 business attributes to pin- point the specific type of partner with which you plan to establish a business relationship. Obvious characteristics that fit most profiles are:

    • Size of partner
      • Revenue
      • Sales reps
      • Technical staff
    • Geographical coverage
    • Market coverage (vertical or industry focus)
    • Technical certifications
    • Vendor authorizations
    • Maturity of service practice(s)
    • Age of the business
    • Maturity and stability of senior management team

    In addition to the general characteristics, your specific needs can complete the profile. Profiling doesn’t always require 20 attributes; the level of specificity is driven by the goals of your plan from Step 1. Broad based recruiting will require less focus than a need to recruit partners with very specific skills sets.

    Once you’ve identified the optimal partner profile, now is the time to clearly define the partner performance metrics, both short term and long term. Unless you can clearly articulate your performance expectations or the desired outcome of the business relationship, you will not be able to identify each of the business attributes of the profile; nor will you be able to have a meaningful conversation with your target partner about a business relationship and expected returns for both parties.

    Clearly define the expectations of the business relationship, beyond just expected revenues. Create the outline of a business plan that could be used on a quarterly basis for review of the partner performance. Even if you allow partners to participate without completing and reviewing quarterly business plans as part of your program, the knowledge of what is expected from a performance perspective is part of the process of profiling.

    Many vendors target different end user segments with different partner types and thus have more than one profile for recruiting. By defining the different relationships up front, you increase your chance of a successful match.

    In the Amazon Consulting 2009 Partner Program study, we regularly track the top value-based metrics used by vendors and how that drives partner performance expectation and associated rewards. Figure 3 lists the top value-based partner metrics identified by vendors for the last three years.

    The basic tool used in recruiting partners is a solid business and economic value proposition. By providing a concrete proposition for the partner, you establish the basis of the ongoing relationship. This is not as simple as delineating the partner benefits from the existing partner program, and may require you to rewrite or update an existing standard partner value proposition. Tailor the tools that you have for partner enablement and on boarding so that they are appropriate for the plan created in Step 1 and targeted for the partners that have been profiled in Step 2.

    When examining the economic models for different scenarios, you may find the value proposition is more attractive in certain situations and prohibitive in others. This may require an additional cycle of refining the profile developed in Step 2, with the elimination of the profiles that do not have an attractive value proposition. If the value proposition is not compelling for certain profile segments, it is ineffective to continue to recruit that type of partner.

    Developing concrete tools for delivery to the partner during the recruitment with detailed economic analysis on expected return-on-investment is critical. This should include both required (and desired) partner investments, allowing the partner to make an informed decision. The strongest long term relationships are built on the ability for both parties to understand the expectations of investment and return, and the expectations of behaviors to achieve those returns.

    The value proposition should create partner loyalty, and ultimately partner profitability, through illustration of how the vendor will support the partner in the following key areas (Figure 4):

    • Financial incentives
    • Competitive differentiators
    • Partner enablement & training
    • Overall partner support and onboarding

    Finding Qualified Prospects

    Today there are many innovative social networking vehicles to attract and germinate new partner relationships. On-line business networking sites such as LinkedIn and Plaxo are the business equivalent of the social networking sites Facebook and MySpace. Currently such sites are more geared toward individuals than companies, but the phenomenon is driving partner database creations by third parties.

    An online database owned and updated regularly is frequently more accurate than the vendor partner locator. Partners are members of dozens of partner programs and there is little incentive to update the partner profile after the original admission. Partner websites are also notorious for leaving certifications on their websites which were once achieved but no longer valid. So the quality of profiling by internet trolling for sourcing potential new partners is as accurate as the data contained in those sources.

    And, don’t rule out old school networking. Meaningful business relationships rely heavily on regular, ongoing face to face communication. Networking events like those offered by the major distributors (TechData’s TechSelect community and Ingram Micro’s VentureTech Network) and industry associations (MSPAlliance, CompTIA) offer meaningful business conversation opportunities. Meeting face to face and vendor/partner conferences provide a context and setting for in depth conversations that cannot be duplicated with phone calls and emails. Don’t overlook the opportunity to network at these events. Just make sure to go in with a Steps 1 and 2 pre-defined, and potentially having screened partners in advance, allowing you to hand-pick partners for face to face conversations which meet your target profile.

    Step 4 is the final stage of effective recruitment and initiates the process for the ongoing relationship after the initial engagement. This is arguably the most important step to cementing meaningful long-term channel partner relationships. For it is through personal accountability to the success of a new relationship where real traction and results are generated.

    Define the responsible parties to manage and grow the vendor/partner relationship, for both your company and the partner. This may transform as the partnership matures from recruitment to on-boarding to growth. But identifying the roles during this phase ensures a successful transition after recruitment. Even if the same people are involved, the activities will be different and it’s important to identify the milestones during the phases to smooth the transitions.

    Attach clear role definitions for each of your various partners facing staff, including frequency and types of contact. Set expectations for the partner how many face to face visits, calls, webinars, and emails they should expect from the following partner-facing roles:

    • Channel Sales Managers

    • Phone based support teams

    • Systems Engineers

    • Trainers – Technical and Sales

    • Channel/Field Marketing

    At this stage of recruitment, you can align which partner performance metrics are the responsibility of which vendor role and how often check points will be conducted against those metrics. That mapping should drive performance management on both sides of the relationship and related compensation.

    Allocate Resources

    Who will do the actual recruiting? Is this just another task that is going to be assigned to the field based partner team? Vendors frequently assign this are part of the business objectives of Channel Sales Managers with the belief that the CSM’s are the most knowledgeable of the territory and will ultimately be held responsible for the success of the relationship. However, their role might be only partial during the recruiting phase with some of the activities more ideally suiting for outsourcing to another department or third party. Figure 5 illustrates the various typical duties of a Channel Sales Manager, and how partner recruitment might fit in an allocation of priorities. Set a realistic allocation of time, no more than 20 percent of established CSM’s, and make sure their compensation is aligned to this allocation.

    On boarding

    On boarding should be considered the final stage to launching a new partner into productivity, but still very much part of the recruiting process. It must be integral throughout the process, with activities in each stage being geared toward the initial ramp up of activity and transactions. By creating mutually agreed upon objectives with metrics and time frames for during recruitment, you enhance the success rate of on boarding.

    The largest single contributor to ultimate failure in recruitment is the lull in the period between the initial sign up and run rate business. Both parties must nurture the relationship during this period. If an initial sale looms, partners certainly tend to meet their initial training and investment objectives quickly. But if that does not lead to run rate transactions, partners often lose focus.

    Establishing goals for both parties and short time frames for commitments to be met, as well as steady and frequent communication during the initial six months is critical. The onboarding process should be driven by scheduled activities and follow-ups to ensure commitment to the program. This should be considered a probationary period for the partner (and the vendor) with de-authorization or the relationship being dissolved as the ultimate resolution. Create specific targets for activities and schedules such as:

    • Number of joint sales calls
    • Number of leads pass from vendor to partner
    • • Timetable for follow up on leads by partner
    • Reasonable expected close rate for leads
    • Role playing or sales training for partner sales team

    During this period, the partner will be testing the precepts of the business value proposition that enticed them to invest. Therefore, the value proposition needs to have phased aspects to show progress for the partner during the on boarding period.

    Identifying, soliciting and formalize new relationships is both an art and a science. The “art” is in the methods by which personal contact is made and how timing factors into both parties’ need and desire to do business together. This paper addresses more of the elements of the “science” here. Our experience indicates that the methodologies used in recruitment and the discipline required in the process are not insignificant. However, when a strong methodology is utilized in a consistent manner, the staying power of the ultimate vendor/partner productivity is enhanced significantly.

    To summarize, the key steps to ensuring a clear, well defined partner recruitment plan are:

    1. Have a Plan to ensure you have a clearly defined coverage and capacity in your channel coverage model.

    2. Start with the End in Mind identifies the characteristics of the partner you are going to recruit and examines the specific metrics you will evaluate the partners ultimate performance against, both short and long-term.

    3. Use the Right Tools for maximum efficiency and effectiveness in recruiting.

    4. Create Accountability initiates the process for the ongoing relationship management after the initial recruitment.

    Tim Lowe is a senior consultant with Amazon Consulting and brings over 15 years of management experience in identifying and executing core business strategies which include channels as a fundamental element. Tim’s channel specific experience includes extensive direct and channel sales management expertise with companies such as Apple, BEA, Plumtree, Tech Data and Compaq.

    Established in 1997, Amazon Consulting, LLC, (Mountain View, CA) increases the impact of partnering by designing, implementing and automating effective partner models. Amazon Consulting’s clients entrust them to formulate growth strategies, build route-to-market models, perform competitive benchmarks, design partner programs, facilitate partner advisory councils, and provide temporary experts for project management and program execution. For clients looking to optimize the partner relationships and improve organizational efficiencies, Amazon Consulting offers PartnerPath, a modular partner management automation system.  For more details visit us at www.amazonconsulting.com.

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