The Definitive Guide to External Social Collaboration and Indirect Channel Marketing

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The Definitive Guide to External Social Collaboration and Indirect Channel Marketing

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Harnessing the full potential of an indirect sales channel to maximize sales has always been one of the greatest challenges faced by businesses. In this compelling and comprehensive eBook, Mike......

Harnessing the full potential of an indirect sales channel to maximize sales has always been one of the greatest challenges faced by businesses. In this compelling and comprehensive eBook, Mike Morgan, one of the industry’s foremost experts in channel performance optimization and CEO of cloud service provider, Relayware assesses the business impact of social collaboration and multi-channel communication strategies and technologies on indirect sales and marketing and provides detailed insights into best practices in applying them to indirect channel lifecycle management. If you market, sell or support your products through an ecosystem of indirect channels, you simply have to read this book!

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  • 1. © Relayware, Inc. 2013 www.relayware.com Page 1 of 113 Collaborate beyond the enterprise eBook from Relayware The Definitive Guide to External Social Collaboration and Indirect Channel Marketing By Mike Morgan, CEO Relayware
  • 2. © Relayware, Inc. 2013 www.relayware.com Page 2 of 113 Relayware eBook Contents Introduction 5! Why Sell Through an Indirect Channel? 6! Challenges Posed by an Indirect Channel Model 6! Knowledge is Power 7! The Pareto Principle 7! The Nature of the Relationship 9! Evolution of the Channel into a Demand-Side Ecosystem 10! Changing Behaviors 11! Chapter 1: External Social Collaboration and Communication in Business 13! Evolution in Communication 13! The Rise of Social Technologies 17! Chapter 2: Business Social Collaboration and Communication Technologies 21! The Business Issue 21! Ecosystem Social Collaboration: What is It? 22! Ecosystem Social Collaboration: The Components 24! The Benefits of Ecosystem Collaboration versus CRM and PRM 30! Consequences of Misuse of Technology 34! CRM and Ecosystem / External Collaboration System Co-existence 35! Chapter 3: Selecting Your Ecosystem 37! Go to Market Strategy 37! The Importance of Good Data 38! Chapter 4: Segmentation, Accreditation and Tiering 40! Accreditation 40! Social Segmentation 44! Chapter 5: Indirect Channel Recruitment 46! What’s in it for Me? 46! Recruitment Campaign 47! Recruitment Process 48! Mediums 49!
  • 3. © Relayware, Inc. 2013 www.relayware.com Page 3 of 113 Relayware eBook Targeted Campaigns 49! On-Boarding 50! Chapter 6: Enablement, Education and Development 53! Market Making 53! Fulfillment Error! Bookmark not defined.! Chapter 7: Indirect Channel Motivation and Incentivization 57! Being the Company of Choice 58! Show Me the Money 60! Being a Pleasure to Do Business With 62! Chapter 8: Indirect Channel Collaboration 64! Proven Methods 64! Service and Support Collaboration 64! Sales Collaboration 65! Marketing Collaboration 70! Collaboration Among the Ecosystem 72! Chapter 9: Communication 74! Communication Strategy 74! Communication Objectives 76! Selection and Segmentation of Receivers 76! Medium 77! Message 81! Response 83! Repetition and Frequency 84! Chapter 10: Service & Support 85! Channel Segmentation Versus Quality of Service 85! Delivering High Quality Yet Cost-Effective Service and Support 86! Purposeful Portals 86! Mobile Apps 93! Chapter 11: Performance Management and Optimization 96! Introduction 96! Definition 96! Setting Performance Targets 97!
  • 4. © Relayware, Inc. 2013 www.relayware.com Page 4 of 113 Relayware eBook Performance Measurement 98! Balanced Scorecarding 99! Balanced Scorecarding for Indirect Channels 100! Purpose of Scorecarding for Indirect Channels 100! Practical Applications of Indirect Channel Balanced Scorecarding 101! Accreditation 102! Channel Program Hierarchy 102! Automating Indirect Channel Balanced Scorecarding 103! Alternative Methods of Indirect Channel Balanced Scorecarding 104! Optimizing and Rewarding Performance 106! Developing a High Performance Channel 107! Rewarding a High Performance Channel 108! Summary 109! Selection 109! Segmentation and Accreditation 109! Recruitment and On-boarding 109! Development and Enablement 110! Motivation and Incentivization 110! Communication 111! Collaboration 111! Service and Support 111! Performance Management & Optimization 112! Additional Information 113!
  • 5. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 5 of 113 Introduction Indirect sales account for more than 70% of global business. It was once thought that the internet would drive intermediaries out of business as direct distance-selling with low transactional costs rendered indirect channels obsolete. For some commodity sales where the company’s brand was strong, this did come to pass. But otherwise, the internet and ecommerce provided a low cost route to market for the very intermediaries that we once thought would put out of business by it. In fact, the internet is largely responsible for an explosive growth in indirect channels created specifically as “etailers” or for conventional resellers; supplementing their offline business with an online channel to market of their own. Amazon doesn’t write, produce or publish books. They’re an aggregator and an indirect channel and have followed their success in books and physical-media music with the sale of downloadable media and many other products. Most importantly, like many other indirect channels before them, they now own the customer and consequently they are far more powerful than any one of the vendors, content creators and publishers they represent – the tail that wags many dogs! Far from heralding the end of indirect channels as we thought it might back in the dotcom era, the internet has in fact provided a global network for indirect sales and a platform for the promotion of their added value. The internet became merely a conduit for marketing and commerce for those channels willing and able to adapt. Once again, Amazon provides us with a prime example as it has itself become a virtual marketplace for many thousands of other indirect channels. More recently, the advent of Cloud services seemed once again to ring the death knell for indirect channels in the hi-tech industry. I have spoken with countless software industry executives in recent years who have again predicted the demise of the software channel because they simply cannot envisage a role for intermediaries in the marketing and support of a service that is sold, delivered, managed and maintained by the company who also produces it. After all, products sold as a service that are simple to buy and easy to own suit an entirely direct go to market strategy. When more complex products are sold to large corporate accounts, again, direct makes sense, so far, so good. But complex products, direct selling and support and SMB’s don’t mix well. In every case throughout the history of commerce, these circumstances call for indirect channels and what companies must do is to develop a thorough understanding of the value chain, roles and responsibilities, rules of engagement and resolve the new challenges posed by the new business model. Such transitions from old to new business models have always accelerated evolution and adaptation among indirect channel ecoystems while spawning new ones. Far from heralding the end of indirect channels as we thought it might back in the dotcom era, the internet has in fact provided a global network for indirect sales and a platform for the promotion of their added value.
  • 6. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 6 of 113 Why Sell Through an Indirect Channel? So what’s so great about indirect selling and why do companies inevitably turn to an indirect go to market model at some point? The simple answer is that most companies have no choice if they want to keep on growing. Marketing and selling to customers and then supporting them directly just doesn’t scale well and costs spiral out of control. Here are the main reasons for companies choosing an indirect model: Extending reach • Whether you’re looking to expand into the next town, the next country or the next continent, indirect channels give you the most immediate and lowest cost route to market • They provide feet on the street that know the local market and speak the local language Augmenting capability • Indirect channels may just resell your products but it’s more likely that they add additional value • They may market, deploy and support your products • They may sell other complementary products and services that make your collective value proposition stronger than yours alone Minimizing cost • An indirect channel gives you instant sales, marketing and other resources in your chosen market with no incorporation fees, no start-up costs and no need for recruiting personnel • What’s more, they’re cheap to run and your overhead is predictable because they entail mainly point of sale discounts and modest support costs Challenges Posed by an Indirect Channel Model Ubiquitous, appealing and successful as indirect selling is, it brings with it inherent management challenges for those companies who adopt an indirect go-to-market strategy. If you sell direct, things are relatively straightforward. You own the sales resources, and you control the message. When you introduce single or multi-tier indirect channel things start to get complicated. Those sales and marketing resources don’t belong to you, most of the time you don’t even know who they are. You don’t pay them and you don’t task them. And you neither determine nor control the messages they deliver to your customers. Nor do you directly benefit from the feedback your mutual customers provide. Ubiquitous, appealing and successful as indirect selling is, it brings with it inherent management challenges.
  • 7. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 7 of 113 Traditional Simplistic Interpretation of a Hybrid Channel Structure Knowledge is Power The question of knowledge and intimacy is critical. Direct selling success is fundamentally based upon telling people what they need to know, telling them what to do and managing them doing it. But if you don’t know who is doing your selling, don’t know how to communicate with them and don’t know how to motivate them and influence their behavior even if you did, you have a big problem. Very often when we engage with a new customer, they scarcely have one named contact per channel organization. Even fewer of these have valid contact information – email address, social ID or telephone number appended to their contact data. If you don’t know who’s out there selling or how to communicate with them, you can’t talk to them and if you can’t talk to them, you can’t influence their behavior or effectively enable them to do what you want them to do. And performance management is of course out of the question. The Pareto Principle This in turn generates the second problem – a cycle of increased investment (of time, effort and resource) in and dependency upon a very small number or proportion of the indirect channel base for the vast majority of a company’s revenue. Most companies surround themselves with a hard-core of volume sellers – indirect channel organizations who consistently sell the most. As the channel grows while channel management resources continue to dwindle, channel management becomes increasingly difficult and we see the Pareto principle taking effect: Direct selling success is fundamentally based upon telling people what they need to know, telling them what to do and managing them doing it.
  • 8. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 8 of 113 Another Indirect Channel Challenge – The Pareto Principle The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. This distribution is claimed to appear in several different aspects relevant to business managers. For example: • 80% of your profits come from 20% of your customers • 80% of your complaints come from 20% of your customers • 80% of your profits come from 20% of the time you spend • 80% of your sales come from 20% of your products • 80% of your direct sales are made by 20% of your direct sales staff • 80% of your indirect sales are made by 20% of your indirect channels In practice we regularly see over 50% of all indirect channel revenues coming from 5% or less of the base. Shocked? Before you judge others, go and check your own sales data – I’ll be equally shocked if your story is any better. The Pareto effect typically worsens because more revenue generated by the fewest number of accounts leads to greater consolidation in investment by the company in those same accounts. These intermediaries typically offer limited opportunity for growth and yet they demand the best pricing, the deepest discounts and the greatest amount of effort to In practice we regularly see over 50% of all indirect channel revenues coming from 5% or less of the base.
  • 9. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 9 of 113 maintain. Without the means to cost effectively develop and monetize the potential that exists within the remaining indirect channels, our customers often reach a growth “glass ceiling” – a revenue threshold beyond which they cannot go with their top tier of intermediaries – a point beyond which they cannot go without investing in systems, tools, processes and best practices to exploit the latent potential that exists. The Nature of the Relationship The third challenge relates to the relationship lifecycle that exists between a company and its indirect channels. Any sales and marketing professional is familiar with the customer lifecycle – targeting, acquisition, nurturing and repurchase or resale. But the nature of a company’s relationship with their indirect channel is infinitely more complex and difficult to manage. This is because the objective is not merely to generate a sale by creating a desire to buy; it is to create a need and desire to sell, market and support on behalf of the company in question. The Indirect Channel Lifecycle
  • 10. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 10 of 113 This is a process of winning hearts and minds and requires a sustained, programmatic approach. Many of our customers mistakenly and unsuccessfully attempt to utilize social CRM systems to try to automate the management of this lifecycle but the sales and marketing automation capabilities they offer are wholly inadequate for the task. Evolution of the Channel into a Demand-Side Ecosystem If the indirect channel model ever looked like the simplistic illustration earlier in this section, it certainly does not resemble this today. Supply chains and value chains have evolved into sophisticated ecosystems made up out of many companies and individuals each providing products, services and knowledge to customers often acting independently but frequently collaborating to deliver business solutions to the customer. Your product is typically only one (small) part in such a solution. Where effective communication through the value chain was once the primary challenge for companies and one that programs and PRM systems solved in part, collaboration with ecosystems is now the number one challenge facing businesses with indirect go to market strategies. An Example of a Demand-Side Ecosystem If the indirect channel model ever looked like the simplistic illustration earlier in this section, it certainly does not resemble this today.
  • 11. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 11 of 113 Changing Behaviors Finally and very importantly is the significant behavioral shift that has taken place within the target audience for this lifecycle management process. The advent of social networking and the ubiquity of the software and technologies utilized to engage in social networking have transformed the way in which people communicate and otherwise interact. Indeed social media has become the communication medium of choice for the generation of individuals now entering the workplace and is rapidly displacing email for everyone else. Some interesting statistics: • Social media, communities and blogs are the number one generator of internet traffic • Instant messaging, activity streams and push updates are replacing email • Mobile devices will outnumber desktop/laptop computing devices 5:1 by 2015 • One to one communication is giving way to one / many to many communication • Marketing communications are giving way to collaborative conversations • Managed relationships are giving way facilitated communities • Individuals are more inclined to be influenced by the opinions and expressed consensus of fellow community members than by companies • Opt-out is giving way to opt-in (Follow, Share, Like) for communication preference setting These are just a few of the manifestations of this change but our customers are really struggling to adapt. Many are only just beginning to implement first-generation Partner Relationship Management (PRM) technologies only to find that their limited collaboration and communication capabilities are unable to address the needs of their audience or to overcome the challenges outlines above. Social CRM and PRM technology fails to address their needs because they enable only some aspects of the sales, marketing and program automation needed. Enterprise collaboration tools are great for facilitating collaboration but enable messaging, file and project-sharing inside a company not beyond it. Let’s recap on some facts that conspire to create a pretty challenging environment: • >96% of manufacturers sell through indirect channels to market • They are almost entirely dependent upon loyalty and goodwill to drive indirect revenue • Indirect channel lifecycle is inherently complex to manage • Communication to and throughout the indirect channel community is critical to success • Social paradigm and mobile technology are revolutionizing communication The key to success is to realize that you are part of a diverse community of businesses and individuals at the heart of which is your mutual customer.
  • 12. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 12 of 113 • Indirect channel needs, expectations and behaviors are changing • Social CRM, PRM and enterprise collaboration technology all individually fail to provide a solution With so many challenges, it would be easy and understandable if businesses gave up selling indirectly altogether. But they can’t and consequently won’t. Instead most tirelessly implement the same flawed strategies they have adopted for years or decades. To do otherwise would require a fundamental change in the way they think about indirect channels, some effort and a little cleverly applied investment. But for those companies willing to apply themselves, the competitive advantage alone will make it worthwhile. This eBook is the definitive guide to making it happen! The key to success is to realize that you are part of a diverse community of businesses and individuals at the heart of which is your mutual customer. Stop trying to manage your indirect channels. You cannot and will not succeed. No-one ever has. Instead collaborate and communicate with them like you’re on the same team, treat them as individuals rather than as an amorphous mass then sit back and watch the revenue roll in.
  • 13. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 13 of 113 Chapter 1: External Social Collaboration and Communication in Business The practice of communication by written documents carried by an intermediary from one person or place to another almost certainly dates back nearly to the invention of writing. However, development of formal postal systems occurred much later. The first documented use of an organized courier service for the diffusion of written documents is in Egypt, where Pharaohs used couriers for the dissemination of their decrees in the territory of the State (2400 BC). Evolution in Communication Apart from the introduction of the postage stamp and intercontinental postage services, nothing much changed until 1837 with the invention of the telegraph allowing messages to be conveyed long distances without the need for physical media. In 1876 the telephone was born followed by the radio in 1910. Since then, the rate of technological innovation in communications has accelerated fuelled by the human desire to interact with each other in ever more immediate and intimate ways. Rate of Adoption of Communication Technology – Time to 50 Million Users As new technologies and mediums for communication become available, so the access to them and the rate of adoption increases at an exponential rate.
  • 14. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 14 of 113 As new technologies and mediums for communication become available, so the access to them and the rate of adoption increases at an exponential rate. Contrast the time taken for radio to reach its first 50 million users compared to Twitter. Of course access to high speed internet has caused this acceleration and with the exception of cellular telephony, all contemporary communications are dependent upon it. Changing Demographic of Social Technology Usage as % of Total If we consider the most recent additions to the range of communication mediums available to us; Instant Messaging, Facebook, Twitter, YouTube, Skype, blogging, wiki’s it’s clear that they can all be described as social communication channels. They inherently facilitate social or “many-to-many” communication as opposed to older forms of communication. Early adoption was among the younger members of society but the demographic of social media users has changed dramatically in the last few years. Those of us over the age of 30 who do most of our communicating for business or during the working day experienced our communication revolution in the 90’s and 00’s with the advent of cell phones and email and we’ve been stubbornly hanging onto them ever since. Look how we have engineered our cell phones to become perfect tools for sending and receiving emails! But email is as its name suggests little more than a means of sending one- to-one or on-to-few correspondence. It is not social and it’s certainly not collaborative. Email has also long been hijacked by the spammers forcing us to adopt ever more creative ways of filtering our daily communication. Regardless, we business people have become eMail is not social and it’s certainly not collaborative. Regardless, we have become slaves to our eMail.
  • 15. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 15 of 113 slaves to our email – the first application we open in the morning and the last we close at night and the one we spend endless hours poring over all day. This has prompted many individuals and some companies to envision a world in which email is eradicated in favor of social communication and productivity is enhanced as a consequence. Take a look at these great examples taken from the media: Luis Suarez of IBM Abandons eMail
  • 16. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 16 of 113 Atos Phases Out eMail Communications are Shifting from Email and IM to Social After two decades of inexorable increases in global email usage, email is finally beginning its unavoidable demise.
  • 17. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 17 of 113 After two decades of inexorable increases in global email usage, email is finally beginning its unavoidable demise. This decline in popularity will accelerate as a new generation enters the workplace. And from personal experience, I can tell you that this new generation simply don’t understand the purpose or merit of email and have no interest in using it. The Rise of Social Technologies Social technology adoption among consumers still far outpaces social technology adoption among employees but this is because business themselves have been slower to adopt them. Until recently, many executives viewed social technologies with suspicion. They focused on their domestic usage and feared that they would cause employees to waste time rather than improve their productivity. But after a slow start, software companies including Jive Software, Yammer (now owned by Microsoft) and Salesforce.com with Chatter have made significant inroads into large enterprises since around 2009. Business Adoption of Social Technologies Lags Behind Consumer Here are some more interesting statistics in rapid succession. The hi-tech and telecoms industries lead the way in social technology adoption and they are showing the same enthusiasm for social technologies as they did for resource planning and relationship management technologies in the last decade or so. Other industries lag far behind. After a slow start, software companies including Jive Software, Yammer (now owned by Microsoft) and Salesforce.com with Chatter have made significant inroads into large enterprises since around 2009.
  • 18. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 18 of 113 % of Companies By Sector Using Web 2.0 Social Tools But this is understandable for a number of reasons. Firstly looking at the mix of employee types and job roles we can see that sales and marketing, IT and R&D combined with management, technical and frontline staff, are the biggest users. Web 2.0 Social Tools Used by Many Job Roles and Departments
  • 19. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 19 of 113 And secondly, there is a dependency on how well networked those employees are and this again comes down largely to the industry and the nature of the workforce. How Well Companies Benefit from Social Technologies Depends Upon How “Networked” They Are Given these statistics, it is easy to see why in a recent report, McKinsey concluded that among commercial enterprises those engaged in software, internet and professional services markets had both the most to gain by using social technologies and that they would find it extremely easy to capture the added value potential offered by them. Value Potential and Ease of Capture Through Social Technologies by Sector McKinsey concluded that among commercial enterprises those engaged in software, internet and professional services markets had the most to gain by using social technologies.
  • 20. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 20 of 113 The largest source of value that they identified is using social technologies for interactions within and between enterprises. McKinsey went on to estimate that social technologies, when accompanied by significant management, process and cultural transformation could improve the productivity of interaction workers by 20-25%. And we’re only just beginning this journey. Let us consider the importance of this conclusion for the reader of this book. You are probably reading this because you market, sell and support your products through an ecosystem of interaction workers – people whose work requires complex interactions with other people, yet because they work independently from your company their work also requires independent judgment. This group includes sales people, marketers, technical personnel managers and a range of other knowledge workers. Imagine the impact on your enterprise of implementing social and collaborative technologies that could complement or replace outdated communication technologies and experiencing a 20-25% improvement in productivity. Improved Collaboration and Communication Through Social Technology Between Interaction Workers Could Improve Productivity by Up to 25% Now imagine the impact of extending that productivity gain beyond the enterprise; to each and every member of your demand-side ecosystem. And imagine the impact upon those individuals of experiencing these productivity gains when working only with those business partners who help facilitate this transformation; namely those employing business social collaboration and communication technologies. The largest source of value that McKinsey identified is using social technologies for interactions within and between enterprises.
  • 21. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 21 of 113 Chapter 2: Business Social Collaboration and Communication Technologies The Business Issue It is often said that the cost of new customer acquisition is five times the cost of customer retention. Yet many companies have yet to benefit from these economies. More significant are the multiples generated by repeat purchases from retained customers and these come as a consequence of long term customer satisfaction. This in turn comes from a deeper understanding of each customer, their individual business challenges and proposing solutions for those challenges rather than a "one size fits all" approach. These principles are as relevant for the businesses that make up a company’s demand-side ecosystem as they are for customers. This is because the majority of businesses today are more dependent upon the sales and consequently the revenues generated by such entities as indirect sales channels than they are upon the revenues generated directly by their own resources. The key to success then, in part at least, is the successful “management” not only of customer relationships but also of indirect channel relationships. In the quest for high levels of customer retention and the generation of on-going repeat business many companies have introduced Customer Relationship Management software systems and, often inappropriately, these have been employed to also manage relationships with indirect channels. But unless the principles of CRM and what has come to be known as Partner Relationship Management (PRM) were adopted enterprise-wide, operationally, collaboratively and culturally, such software systems often achieved neither their potential nor the company’s business goals. Since the advent of enterprise social and collaboration strategy and associated systems at the turn of the last decade, business focus has turned from CRM to Social CRM and from “relationship management” to social collaboration. The principal behind this is that social and collaborative engagement is ultimately deemed more productive than the traditional management of transactional business relationships. Indeed in the recent McKinsey Global Institute report “The Social Economy: Unlocking Value and Productivity through Social Technologies”, MGI concluded that businesses could realize a 25% productivity gain through the adoption of social and collaborative strategies and technologies. McKinsey define social technologies as digital technologies used by people to interact socially and together to create, enhance and exchange content Social technologies distinguish themselves through the following three characteristics: 1. They are enabled by information technology. 2. They provide distributed rights to create, add and/or modify content and communications. Business focus has turned from CRM to Social CRM and from “relationship management” to social collaboration.
  • 22. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 22 of 113 3. They enable distributed access to consume content and communications. Collaborative technologies are more loosely defined but again appear to share three common characteristics: 1. They are enabled by information technology. 2. They help facilitate action-oriented teams working together over geographic distances by providing tools that aid communication, collaboration and the process of problem solving and achieving a common goal. 3. They may support project management functions, such as task assignments, time- managing deadlines, and shared calendars. The juxtaposition of social and collaboration technology is clearly well-suited to the application of enabling individuals separated by geographic distance to collaborate in the shared goals of a supply- and demand-side ecosystem. The goals of the latter, which we shall focus on in this document being namely marketing to, selling to and providing service and support to customers. We put forward the case then that by evolving existing Customer and Partner Relationship Management strategies and technologies into one’s in which social collaboration is central, businesses can help to achieve long-term customer and channel partner satisfaction, ensure repeat purchases, improve customer and partner relationships, increase loyalty, decrease customer and partner turnover, decrease marketing costs (associated with customer or partner acquisition), increase sales revenue, and thereby increase profit margins. This document sets out to define the components of such a strategy and identify the technologies available to implement it. Ecosystem Social Collaboration: What is It? Ecosystem social collaboration is a system of methodologies, strategies, software, and web-based capabilities that help an enterprise to facilitate and engage in collaboration with and among the ecosystem of companies and individuals that engages in both supply and demand generation and fulfilment. It is the collection and distribution of all associated data to all areas of your business and the socialization of data among constituents of the ecosystem. The general purpose of such a business strategy is to enable your organization to better leverage your ecosystem through the introduction of reliable systems, processes and procedures for collaboration and collaborative communication. Enable your organization to better leverage your ecosystem through the introduction of reliable systems, processes and procedures for collaboration and collaborative communication.
  • 23. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 23 of 113 Social Technologies In today's competitive business environment, a successful collaboration strategy cannot be implemented by simply installing and integrating a software package designed to support CRM, PRM, Marketing Automation (MA), Enterprise Collaboration (EC) processes or indeed any combination of social technologies. A holistic approach to collaboration is vital for an effective and efficient collaboration strategy. This approach includes training of employees, a modification of business processes based on the needs of employees, customers, suppliers and indirect channels to market and an adoption of relevant IT systems and/or usage of IT services that enable the organization or company to follow its collaboration strategy. We use the terms “collaboration” and “social collaboration” here to describe the whole business strategy and ethos (or lack of one) oriented on ecosystem needs where the company itself is one constituent in the ecosystem rather than as a description of a software system although we will consider those in due course. To be effective, collaborative engagements need to be facilitated end-to-end across the entire ecosystem. Successful implementers of an ecosystem collaboration strategy: • Identify and understand ecosystem success factors • Create an ecosystem-centric culture • Adopt ecosystem-based KPI’s • Develop end-to-end processes to collaborate with and foster collaboration among constituents in the ecosystem A successful collaboration strategy cannot be implemented by simply installing a software package.
  • 24. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 24 of 113 • Utilize integrated systems to enhance ecosystem collaboration to best suit their needs • Share information, tools and resources with ecosystem members • Engage in and facilitate social and collaborative discussions with and among your ecosystem • Monitor and analyze all aspects of ecosystem collaboration Ecosystem collaboration attempts to integrate and automate the various demand-side processes within a company and expose them to the external ecosystem to facilitate collaboration and communication with those processes and the individuals responsible for them. Ecosystem Social Collaboration: The Components There are five components of a strategy: 1. Operational Collaboration - automation of collaborative marketing, sales and service business processes and engagements 2. Community Collaboration – facilitation of peer to peer and workgroup collaboration 3. Multi-Channel Communication – facilitating collaborative discussions with and throughout the ecosystem 4. Analytical Collaboration - support to analyze ecosystem behavior, implementing business intelligence-like technology 5. Cultural Collaboration – transformation your company culture into a collaborative culture 1. Operational Collaboration Operational Collaboration is the transformation of so-called "front office" business processes, which include all aspects of ecosystem contact (sales, marketing, learning and service) into collaborative engagements. This involves a shift from linear “cascaded” business processes “downstream” to the facilitation of team working between two or more companies or individuals and the collaboration on shared tasks. Operational collaboration provides the following benefits: • Facilitates personalized, efficient and collegiate engagement • Enables a 360-degree view of members of your ecosystem and the focus of collaboration (e.g. customer, project, support ticket) while you are collaborating with them • Allows members of the ecosystem to interact and collaborate autonomously Operational Collaboration is the transformation of so-called "front office" business processes, which include all aspects of ecosystem into collaborative engagements.
  • 25. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 25 of 113 • Everyone in your organization from sales people to service personnel can access complete history of all ecosystem interaction regardless of the touch point The operational part of ecosystem collaboration typically involves four general areas of business: Sales Collaboration Sales collaboration should encompass the most critical sales and sales force management functions carried out by your direct sales force (and automated by CRM) but in this case now extended to address these for your entire ecosystem. These functions include account management, contact management, quote management, lead management, pipeline management, forecasting, sales administration, keeping track of customer preferences, buying habits, and demographics, as well as performance. Just as Sales Force Automation (SFA) tools are designed to improve field sales productivity, ecosystem sales collaboration tools are designed to improve ecosystem sales productivity. Key components of sales collaboration are the ability to facilitate joint management of sales processes with ecosystem members using web, social and mobile tools and tight integration with CRM, product catalogues and pricing. Marketing Collaboration Marketing collaboration enables the sharing of information about the business environment, including competitors, industry trends, and macro-environmental variables. It is the execution side of joint-campaign management, demand generation and lead management. The intent of marketing collaboration applications is to improve marketing campaign efficiencies and effectiveness across the ecosystem. Conventional Marketing Automation (MA) applications on the other hand are solely focused on managing these for the company alone.
  • 26. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 26 of 113 Collaborative and Cooperative Learning Learning collaboration and cooperation enables the transfer of knowledge between the source and individuals within the ecosystem that is specific to the role the individual performs on behalf of the company or their employer. A transfer of knowledge among ecosystem members may also be facilitated. The underlying premise of collaborative learning is based upon consensus building through cooperation among the participants. Cooperative learning is defined by a set of processes which help people interact together in order to accomplish a specific goal or develop an end product which is usually content specific. It is more directive than a collaborative approach and is best suited to guided learning. The knowledge transfer or training may take various forms ranging from sales or technical skills to product, market or customer-specific information. It may be ad-hoc or structured in personal “certification” schemes or accretive organization-level “accreditation” programs for which tests must be taken and compliance assured. The intent of learning collaboration applications is to improve personal and organizational knowledge, skills and expertise and so increase effectiveness of resources across the ecosystem. Conventional Learning Management Systems (LMS) on the other hand are solely focused on managing these for the company’s internal resources alone. Service and Support Collaboration Conventional Customer Service and Support (CSS) applications automate service requests, complaints, product returns, and information requests leveraging shared customer information. The assumption here is that customer support interactions are owned by the company. In practice, most service interactions are handled by external members of the ecosystem and the company typically becomes involved with escalations. Service and support collaboration encompasses the shared responsibility for providing customer service and support and provides the means for joint management of service and support processes with ecosystem members using web, social and mobile tools and tight integration with CSS systems. Widely available CRM and PRM software systems are often known as "front office solutions." This is because they deal directly with the customer or sales “partner”. Their purpose is to automate operational tasks and processes and their functions can be broken down in a similar way as we have done here. But they cannot be considered “collaborative” solutions for the following reasons: • CRM systems encompass SFA and to some extent MA but they are strictly focused on processes associated with the customer which are typically transactional and involve little or no interaction. • PRM systems primarily address marketing program automation e.g. opportunity management, incentives, rebate programs etc. and while some degree of web- based interaction takes place through “partner portals” but do so while utilizing The operational part of ecosystem collaboration typically involves sales and marketing collaboration, collaborative and co-operative learning and service and support collaboration.
  • 27. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 27 of 113 conventional linear, downstream communication between no more than two parties. Few if any processes can be deemed truly collaborative. 2. Community Collaboration While operational collaboration largely deals with processes and program collaboration, community collaboration requires the company to facilitate collaborative dialogue and engagements between it and the ecosystem and among the members of the ecosystem. This is achieved through the provision of online community and group networking and discussion tools through which individuals who share common roles, experience, skills and interests can interact, share knowledge, information, files and documents and engage in collaborative conversations. Through the integration of portals, social networks, instant messaging and mobile apps, community collaboration tools ecosystem collaboration allows members to interact and communicate using the widest variety of mediums. 3. Multi-Channel Collaborative Communication Ecosystem collaboration facilitates interactions through all channels (personal, letter, phone, web, e-mail, social and mobile) and through these mediums supports co- ordination of employee teams and ecosystem members. It is a solution that brings people, processes and data together so companies can work together to better serve and retain their customers. The data/activities can be structured, unstructured, person- to-person, group-to-group, community-to-community, conversational, and/or transactional in nature but always interactive and collaborative. Collaborative communication provides the following benefits: • Enables efficient productive interactions across all communication channels to, through and within the ecosystem • Enables autonomous, online collaboration to reduce customer service costs • Integrates offline communication channels enabling broadest possible monitored, tracked and recorded interaction • Enables 24x7 collaboration regardless of location • Ensures that communication and collaboration takes place through a medium of the participant’s choice • Dramatically improves success rates Community collaboration requires the company to facilitate collaborative dialogue and engagements between it and the ecosystem and among the members of the ecosystem.
  • 28. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 28 of 113 4. Analytical Collaboration In analytical collaboration, data gathered within operational collaboration and/or other sources are analyzed to segment ecosystem communities according to profile or behavior or to identify potential to enhance peer-to-peer, workgroup or community collaboration. Ecosystem analysis typically can lead to more effective interaction and more targeted campaigns to increase skills, shared knowledge and mindshare. Examples of campaigns directed towards ecosystem members are: • Selection and segmentation – profiling and separating the ecosystem into multiple overlapping groups with common attributes or behaviors • Recruitment and onboarding – acquiring new companies or individuals for the ecosystem and nurturing them so that they are productive • Training and enablement – developing skills and instilling knowledge within ecosystem members to enable them to be more effective • Motivation and incentivization – providing tactical and accretive inducements to improve performance • Performance management – setting and measuring attainment against joint targets Analysis typically covers but is not limited to: • Decision support through dashboards, reporting, metrics, performance etc. • Predictive modeling of ecosystem attributes • Strategy and research • Analysis of data may relate to one or more of the following analyses: • Campaign management and analysis • Communication channel optimization • Contact optimization • Recruitment / reactivation / retention • Segmentation • Satisfaction and success measurement / increase • Sales coverage optimization • Marketing coverage optimization • Financial forecasting • Pricing optimization • Product development • Program evaluation / optimization • Business process optimization • Risk assessment and management
  • 29. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 29 of 113 5. Cultural Collaboration Cultural collaboration aligns the culture of the company with the aim of achieving holistic collaboration internally and externally with the ecosystem. Cultural collaboration can be attained by: • Identifying and understanding ecosystem success factors • Creating an ecosystem-centric culture • Adopting ecosystem-based KPI’s • Developing end-to-end processes to collaborate with and foster collaboration among constituents in the ecosystem • Utilizing integrated systems to enhance ecosystem collaboration to best suit their needs • Sharing information, tools and resources with ecosystem members • Engaging in and facilitating social and collaborative discussions with and among your ecosystem • Monitoring and analyzing all aspects of ecosystem collaboration Few software systems deliver to their full potential. This is partly because most fail to offer a complete end to end solution, addressing the needs of the users. But failure can also be attributed to a lack of cultural transformation in line with basic principles. CRM and PRM are prime examples and when they fail, they often do so because company executives have failed to make the cultural changes necessary to ensure success. Enterprise collaboration is the subject of much attention (as well as investment) from company executives right now not least because it is highly acclaimed for its impact on productivity and efficiency. As company cultures evolve and collaboration gains its rightful place in corporate “DNA”, so the criticality of expanding the reach of collaboration beyond the enterprise will grow. Cultural collaboration aligns the culture of the company with the aim of achieving holistic collaboration internally and externally with the ecosystem.
  • 30. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 30 of 113 The Benefits of Ecosystem Collaboration versus CRM and PRM Ecosystem collaboration, in its broadest sense, means facilitating collaboration with and between members of a business ecosystem. A good collaboration strategy will allow a business to target, recruit, onboard, train and develop, motivate and drive improved performance with every constituent within the ecosystem while enabling multi-channel communication to and through every device and medium available. Specific benefits at every stage of the relationship lifecycle include: Selection and Segmentation It is crucial to build an ecosystem that addresses the needs of your customers. One must therefore define the nature of the ecosystem by aligning it with your go to market strategy: • Geography – what regions, countries, states, cities etc. does your ecosystem need to cover and what degree of coverage is required in terms of capabilities to service the markets there? • Horizontal Markets – what type and size of organization, knowledge and skills are required to address the large, medium and small business customers or consumers you wish to reach? • Vertical Markets – what vertical market expertise will you need to service the customers therein? • Products – what product knowledge, sales, marketing and technical skills will you need relating to your own products and complementary products from other suppliers? • Value Proposition – what will your joint value proposition be to the customer? Data can be sourced from a wide variety of sources to load into your system before profiling and segmenting your base, building coverage maps and identifying gaps in your existing ecosystem. CRM and PRM systems can store the data and provide reporting capabilities but few will afford the richness of capabilities for balanced score-carding and detailed profile-matching necessary. Ensuring that your ecosystem is selected according to the needs of your go to market strategy and your customer needs results in optimized market coverage and customer satisfaction. Enterprise collaboration is the subject of much attention and investment because it is acclaimed for its impact on productivity and efficiency.
  • 31. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 31 of 113 Recruitment and On-boarding When engaging in targeted recruitment to your selected and segmented lists, data is of paramount importance. This includes acquired knowledge about the individuals as well as the companies that make up your ecosystem. When it comes to the act of recruitment, any CRM or PRM system can manage a simple outbound recruitment campaign if it has contact names and a medium for delivery. But simple as it is to do; running an email campaign alone will severely limit your chances of success. Firstly, any outbound campaign must feature multi-channel and multi-media delivery. It must include direct contact by telephone, social networking, instant messaging and it must reach the recipients on and through any medium or device they choose to use. There must be a conscious act that the recipient must undertake to establish the relationship. This act may range from merely “Following” your communications through to downloading your mobile app and signing in or formally registering to join your community program and possibly even signing up to your commercial terms. All of these things require a web, social and / or mobile presence and some require an automated registration process hosted on a secure portal or mobile app feeding into an approval process and the automated distribution of security credentials. Here we have already gone far beyond the scope of CRM or PRM but it is in the next crucial stage of the process that a truly collaborative methodology and engagement is essential. The act of registration is merely the first step. What must follow is an extended on-boarding campaign (similar to a lead nurturing campaigns as supported by MA systems) in order to set the partner on the path to development. This campaign requires the production and delivery of time or event- triggered on-boarding communications. Once again, these must take many forms and utilize multiple communication channels and they must be personalized and profile- sensitive. Their purpose is to improve engagement and minimize early churn of new recruits. Recruitment can also be aided and your campaign’s reach extended through viral communications, social re-communication, community interaction and simple mobile and web tools like invite-a-friend drawing on personal contact data on the device. Ensuring that your ecosystem is recruited effectively in accordance with your go to market strategy and then nurtured through the formative stages of the relationship ensures higher levels of retention and far higher levels of engagement in later phases of the lifecycle. Training and Enablement No company would deploy a new member of staff into a sales, marketing or support role without providing proper structured and role-specific training, yet most companies expect their ecosystems to perform complex tasks with little or no formal education. Indeed after recruiting a new member, there usually follows an awkward silence while both parties wait for the other to deliver. Providing adequate knowledge and tools for their ecosystem is Ensuring that your ecosystem is selected according to the needs of your go to market strategy and your customer needs results in optimized market coverage and customer satisfaction.
  • 32. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 32 of 113 every company’s responsibility and when doing so is facilitated through simple email messages it is well within the capabilities of a CRM or PRM system. However when it comes to delivering training curriculum management, content creation, delivery, testing and certification, most organizations will look to a commercially available learning management system (LMS). However, these applications are typically geared to employee training and, on the whole, perform poorly when managing the complex processes associated with an ecosystem learning program. With the right technology, interactive training can be delivered online or via a mobile device to ecosystem members at the appropriate time to suit the stage in the development of the relationship and their personal profile and at a convenient time to suit their needs. This incorporates everything from simple time or event- triggered and context-sensitive multi-media updates or refreshers through to sophisticated multi-tier, curriculum-based certification programs. In the case of the latter, results can be automatically collated to determine organization-level accreditation which in turn will lead to further structured learning for the individual. A well trained ecosystem is inherently more effective and delivers significantly higher levels of customer satisfaction. Motivation and Incentivization Many companies outsource loyalty or incentive program management simply because they are too complex to manage and too time consuming to administer. Most are based on the simple premise that sales are rewarded with points, prizes or money. Most are unsuccessful because they usually only target those individuals who are in a sales role and who are already actively engaged in selling on behalf of the company or else they reward the company for hitting targets that were often predetermined to be easily achieved. As a consequence, they often simply reward people and companies for sales that would have been won regardless. Collaborative motivation and incentivization is focused on rewarding individuals for performing tasks, achieving objectives or otherwise making a contribution to overall ecosystem effectiveness and its goals cannot be achieved through the use of CRM or PRM systems. The practice monitors, recognizes and records all interactions with the members and represents a form of gameification. Just a few examples of activities that should and could qualify for rewards are: • Registration • Profile enhancement • Downloading an using a mobile app • Portal visits and social tagging of pages • Social interaction; Likes, Follows, Shares, Comments • Subscription to authors and communication topics A well trained ecosystem is inherently more effective and delivers significantly higher levels of customer satisfaction.
  • 33. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 33 of 113 • Reading emails • Interaction with and contribution to community and group discussions • Training participation and certification achievement • Watching videos • Downloading documents • Submitting joint business plans • Lead acceptance, updates and closure • Deal registration, updates and closure • Launching joint marketing campaigns • Achieving ROI targets for marketing activities • Compliance • Completing service calls and installations • Meeting first-time fix rates Of course making sales is still important but collaborative ecosystem motivation is focused on rewarding everyone for making a contribution no matter how small to collective success. Rewards themselves need not be prizes or money. The application of basic gameification principles can ensure that the reward of merely monitoring your achievements and being able to share them with others can be enough to motivate otherwise cynical individuals to participate. Well-motivated and incentivized people perform better. And a more highly performing ecosystem delivers improved results and heightened levels of customer satisfaction.
  • 34. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 34 of 113 Sales, Marketing, Service and Support Collaboration Just as companies need to monitor their performance and the performance of their staff against defined KPI’s, it is essential for them to pay close attention to the performance of individuals within their external ecosystem and of the ecosystem as a whole. While sales analysis and reporting is a common feature of any CRM and PRM system, there any many other metrics used to measure ecosystem performance beyond merely revenue delivered including ecosystem engagement (examples of which are detailed in an earlier section of this document). While a CRM or PRM system requires integration with various external systems to import critical data for a balanced assessment of performance, an ecosystem collaboration solution captures not only all of the data associated with the constituents within your ecosystem but it also captures information about each and every interaction with and between them and with your mutual customers as well because all of the associated apps and communications channels reside on or interact with the same platform. Ecosystem performance cannot be effectively measured merely through tracking sales performance. Instead companies have to establish a broad set of performance KPI’s linked to every activity and every interaction they have with their ecosystem and that takes place within it. By doing this they can take a holistic and objective approach to performance management. Consequences of Misuse of Technology Companies who use CRM and MA systems to engage in ecosystem collaboration have an extremely poor record of success. These are customer-centric sales and marketing tools and wholly unsuited to the task. A good compromise can be achieved by deploying a PRM system but this technology has failed to keep up with the times and the changes to collaboration and communication that the last decade has brought. Currently, only a small portion of companies have adopted a PRM strategy or employed a software system to execute it. Indeed most are still driving their business as they always have done by using spreadsheets and manpower. Minorities have chosen to use an incumbent CRM system to support basic contact, lead and opportunity management, but that is as far as it goes. Hence, the results are almost always disappointing and the business doesn’t reap the benefits from the tools. Ecosystem collaboration solutions effectively replace PRM systems as they offer all of their functionality but additionally they fulfill contemporary needs for peer-to-peer and community collaboration and multi-channel communication incorporating social, messaging and mobile thereby rendering PRM obsolete. Operational ecosystem collaboration displaces PRM and channel programs and takes both the depth and breadth and interaction to an entirely new level improving efficiency and operational effectiveness for all members of the ecosystem.
  • 35. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 35 of 113 CRM and Ecosystem / External Collaboration System Co-existence Any company that has made an investment in a CRM system is unlikely to want to discard it and the investment it represents in order to deploy a system specifically designed for facilitating collaboration beyond the enterprise. So the question “can we link our CRM system with a complementary system?” is often asked and the answer is “yes!” Integrating CRM and external collaboration systems allows organizations to bring together all parties in the ecosystem including the customer into one virtual database while preserves the integrity and uniqueness of customer and non-customer systems and tools. Several of our customers use a CRM system as: a sales automation system for direct sales teams, an MA tool for business environment analysis and the execution tool for campaign and lead management. Relayware Ecosystem Collaboration Solution Meanwhile, Relayware manages all demand-side ecosystem interaction including sales and marketing collaboration, service and support and learning. Relayware also provides Integrating CRM and external collaboration systems allows organizations to bring together all parties in the ecosystem.
  • 36. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 36 of 113 valuable channel reporting, analysis and decision-making support; it is therefore widely used by a broad range of internal functions as an invaluable business tool and data source. With its broad range of communications channels, including web, email, social networking, messaging and mobile, Relayware also ensures that companies can get their messages to the right people at the right time no matter where they are or through which device they choose to communicate. PRM is obsolete but (Social) CRM is here to stay. However, since CRM lacks the capability to facilitate collaboration, integration between CRM and ecosystem / external collaboration and social communication solutions will become commonplace and, will be in our view both an optimal solution to significant business challenges and a means of capitalizing on many significant business opportunities. The rest of this book examines the relationship lifecycle between companies like yours and their demand-side ecosystems and establishes best practice in using external or ecosystem collaboration and social communication technologies to substantially improve productivity, outmanoeuvre your competition, drive increased revenues and improve your return on investment in sales, marketing and support activities associated with your indirect channels.
  • 37. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 37 of 113 Chapter 3: Selecting Your Ecosystem Earlier, I described the indirect channel relationship lifecycle which by its very nature is a continuum. But we have to start the process somewhere and it seems logical to begin where all channel engagement strategies should, but often don’t begin – selecting the type of organizations needed to achieve your business objectives. I also drew the analogy between your relationship with your indirect channels and your relationship with employees. Logically before recruiting, on-boarding, training, motivating and managing new sales or marketing personnel, you would start by writing a job description defining the location, role, responsibilities, required skills and competencies associated with the job. Incredibly many companies embarking on an indirect channel strategy for the first time ignore this step and companies with mature strategies rarely if ever review their channel selection. The former often examine the channel landscape and try to reverse-match what they see with their needs. The CEO of a Silicon Valley cloud security software start-up typified this behavior recently when he told me ”we went after the VAR channel that sell Symantec and McAfee but we’ve found it very tough to get traction.” Of course they have. Symantec VAR’s have no motivation to sell a start-up’s cloud service when they already sell the market-leader’s conventional licensed software! The latter stubbornly stick to an established channel even though over time, they’re target markets and / or products may change significantly. Go to Market Strategy The first step in developing your indirect channel strategy is to ensure that you have a clear understanding of your existing go-to-market strategy. This seems obvious. But ask yourself: • What are our target markets - geographic, product, horizontal and vertical? • Who are our target customers - who benefits from our products and services, what size and type are they? • What kind of indirect channel addresses these customers offering the kind of product and services they want to buy? • What products and services do we have that will address the needs of the customers and which will appeal to the channels that service them? • What are our value propositions to both customer and channel indirect channels? Answering these simple questions will lead you to the right indirect channel channels and help define your indirect channel selection and recruitment strategy by establishing selection criteria. The first step in developing your indirect channel strategy is to ensure that you have a clear understanding of your existing go- to-market strategy.
  • 38. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 38 of 113 The Importance of Good Data All too often, companies choose their indirect channels based upon small amounts of data that can be easily accessed, or make attempts to gather more detailed information with a manual approach. The result is that important clues about why certain companies are unlikely to make good indirect channels are missed and more importantly, companies fail to discover the companies that could become some of their most successful indirect channels. Remember the words of the cloud services executive from earlier in this chapter? Many companies mistakenly assume they know who the ideal indirect channels are based upon local knowledge and ‘gut feel’. Whilst this approach may work on a local scale it cannot succeed as a basis for a regional or global strategy. To get a complete picture of your potential indirect channel landscape, you must consider detailed research, data pooling and if necessary data acquisition. Before you start, decide what kind of information you will need to know about each indirect channel in order to: • Assess their suitability for partnership (your selection criteria) • Benchmark them against their competition • Communicate with them when the time is right Pull together as much data as possible from internal sources on as many existing and potential indirect channels as possible. Leave no stone unturned. Draw from your marketing databases, contact lists, ERP, SCM, LMS, MA and CRM systems and create a single central repository in which to store your indirect channel data. When you have exhausted all existing internal sources, consider utilizing low-cost resources to conduct web-based desk research, find out who is selling for your direct competitors, contact your distributors for sell-through and contact data or as a last resort, approach a data specialist with a very tight brief. Ask the provider to map the data you already have against the total data they have available ensuring that you are supplementing your existing data rather than replacing it with exactly the same companies - at your own expense. Most importantly, ensure that you acquire current contact information on key personnel - understand who you can’t sell to, market to or recruit through, choosing only the contacts right for you. Don’t be surprised if the indirect channels you subsequently select are very different from those you expected or the channels you have now. Most companies outgrow their indirect channel network as their go-to-market strategy evolves but as I highlighted earlier, surprisingly few take proactive steps to do anything about this. Remember, indirect channels don’t always evolve at the same pace or in the same direction as the companies whose products they sell. To get a complete picture of your potential indirect channel landscape, you must consider detailed research, data pooling and if necessary data acquisition.
  • 39. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 39 of 113 Few companies have the patience or nerve to invest in indirect channel development or reselection. History offers many examples of companies who have found a very real and urgent need to find alternative channels to market. Note that when Apple launched the iPod, the company’s global franchise network of Apple Center’s had little to offer the company in taking it to market. And cannily, Apple chose to complement established retailers with its own chain of retail outlets. Common Data / System Complexity with CRM as the Hub Above all, start with defining what you need to know to achieve your goal of indirect channel selection, create a single data repository with a consistent data structure that meets your current and your future needs. The resultant indirect channel database should be accessible as a business tool by all those in your company who will need to interact with your indirect channel network. It is important also that you develop a strategy and a methodology for maintaining the data’s currency such that it continues to be fit for purpose. As we shall see later, CRM systems seem like the obvious choice but beware! Think about what you intend to do with the database once you have built it and then decide whether a CRM system will be flexible enough to support the complexity of an indirect route to market while enabling self-profiling and the range of programs you will no doubt wish to automate. Sales automation alone addresses few if any of the key lifecycle components alone. Common Data / System Simplicity with CRM as the Hub and Relayware as Channel-Centric System Think about what you intend to do with the database once you have built it and then decide whether a CRM system will be flexible enough to support the complexity of an indirect route to market while enabling self- profiling and the range of programs you will no doubt wish to automate.
  • 40. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 40 of 113 Chapter 4: Segmentation, Accreditation and Tiering Once you have decided which indirect channels you need in order to implement your go to market strategy, it’s time to establish a framework for your ecosystem. Engaging with your channel as an amorphous mass is as unthinkable as engaging with your customers in the same way so you need to create communities of entities that share common attributes so that you can communicate and ultimately collaborate and facilitate collaboration in the most effective and productive way. Once again, data is critical here. Just as with selection, you need to decide which attributes are important to you and how you will use them to segment your channel. Accreditation I will illustrate segmentation methodology by using channel accreditation as an example. This is because if it is done properly and utilizes balanced scorecarding, it can be very effective. First a word of caution! Using an accreditation or certification scheme to segment an indirect channel has been the norm in several industries for decades but just because accreditation is the accepted approach does not mean that it is right for every company. Before you consider it, ask yourself a few questions to assess your true objective: • Do I want to maximize the number of indirect channels I recruit? • Conversely, do I want to recruit and retain only those indirect channels who meet stringent criteria? • At what stage in the technology lifecycle is my product? • What do I want to measure and can I measure it? • Can I monitor and manage an accreditation program? • In who’s best interest is an accreditation program - ours, the customer’s or the indirect channel’s? • What would compel indirect channels to join a program? • What commitments will I require in return? Accreditation programs are typically unappealing to mainstream channels because they require investment to participate and generally deliver limited rewards. By contrast, value added channels (Value Added Resellers and Distributors – VAR’s and VAD’s) keenly Using an accreditation scheme to segment an indirect channel is not the right approach for every company.
  • 41. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 41 of 113 embrace them because they provide a means of specialization and differentiation. Specialization is the key. VAR / VAD channels don’t want to maintain multiple accreditations unless they are complementary. It is therefore important to understand your objectives in developing and implementing such a program. Any product’s adoption lifecycle can be visualized using a bell curve as shown below: Aligning Indirect Channels with a Product’s Lifecycle If accreditation seems like the right approach, take a pragmatic approach to defining the criteria: • What knowledge, skills, facilities are actually required? • Will accreditation be awarded based upon quantitative or qualitative criteria or both? • What exactly will I measure? • Do I have the necessary information and if so, how will I analyze it? • How will I administer and manage the program? • How will we play our part in supporting the channel to maintain their accreditation? • What will happen to defaulters? • What are the rewards for retention? • Do I have the systems, processes and resources to manage the program? The first rule is ‘don’t set criteria that are not absolutely necessary’. If your channel can see no point in your criteria and they have no knock-on benefits to the customer, then your channel will be less inclined to try to achieve them. The next point is very subjective but our view is that revenue, volume and unit sales targets sit rather uncomfortably alongside value-based accreditation criteria. Accreditation schemes that start out with conflicts of As the market’s familiarity with the underlying technology grows and the product or underlying technology begins to enter the mainstream, a more ‘inclusive’ indirect channel strategy is needed to drive widespread adoption and higher sales volumes.
  • 42. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 42 of 113 interest rarely succeed and in our experience, the need to achieve quarterly revenue targets often outweighs the need to maintain the credibility and respectability of an accreditation program. It is important to ensure that criteria can be accurately and consistently measured and properly audited. You must be in possession of all of the data required to award an accreditation. As a general rule, data that can be sourced from and verified upon internal systems and data sources is more reliable than data that is sourced from third party sources, especially the indirect channels themselves. By now, many companies will be thinking ‘the only irrefutable data I have relates to sales results and numbers of trained personnel’ and it is for this reason that most companies often distil their accreditation scheme criteria down to these two factors. Beware! If an accreditation scheme is to be truly valued by indirect channels and customers alike and if it is to deliver results, you must be much more thorough. Value Based Segmentation A tried-and-tested approach for value-based indirect channel segmentation is based upon the balanced scorecard method. Using this approach, you can identify all of the criteria both quantitative and qualitative and assign those scores and weightings that reflect their importance, scoring each indirect channel or potential indirect channel accordingly. The balanced scorecard approach works well in two different scenarios: 1. When relatively small numbers of indirect channels are involved and hence the process can be managed adequately using manual methods 2. When larger numbers of indirect channels are involved and a suitable technology solution is deployed to conduct automated analysis Both scenarios require good data sourced from a variety of places: • Your transactional or ERP systems • Contact databases used by marketing staff to distribute channel marketing communications • Contact management systems used by channel account managers • Training or learning management systems • Technical support systems • External sources such as data companies, industry directories and trade show catalogues
  • 43. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 43 of 113 Input from these various sources needs to be brought together into a single repository and one must ensure that it is accurate, consistent and uniform. When these conditions are met, you can scorecard your indirect channels. Multiple Measurement Criteria Establishing multiple measurement criteria creates a need for repetition and continual validation. This is complex to manage and nowhere will this complexity be felt more than in the areas of fulfilment and administration. Before embarking on this route, ask yourself: • Who will transfer the knowledge to your indirect channels to the level you require? • Who will monitor and manage accreditation criteria attainment across your channel? • What systems processes and supporting resources will be made available to them to do it? • How will you manage education, examination and certification? • How will you manage certification expiry? How will you punish defaulters? And what of those indirect channels who do maintain their accreditation? Those who do everything that is asked of them? How will you reward them? How will you protect their investment? How will you support them to maintain their accreditation? And how will you manage those who create demand for you without actually fulfilling it? After all, many companies have the expertise and customer relationships to influence buying decisions and yet they have no interest in actually supplying the customer with the solution. Your accreditation scheme must be sufficiently robust and flexible to cater for such indirect channels for which revenue criteria and product margin will be completely irrelevant and counter-productive. Indirect channel segmentation through accreditation is a proven and successful method of targeting a suitably qualified indirect channel network or channel but only if your product is in the right phase of its lifecycle. Exclusive models such as this will deter volume channels from selling mainstream products if alternatives exist in the market. For value added channels selling early-life, specialist or low volume/high value products, accreditation can work well depending on the approach to effective administration and management of data, systems, processes and resources that exist to implement such a program. Your accreditation scheme must be sufficiently robust and flexible to cater for such indirect channels for which revenue criteria and product margin will be completely irrelevant and counter- productive.
  • 44. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 44 of 113 Social Segmentation Segmenting your indirect channel based upon compliance with a predefined set of criteria that is unique to your company, product, market or customers and according to company profile is for many companies the end of the line. It should be the beginning because so far you have only satisfied your own needs. As I intimated earlier, in the past, vendors saw themselves at the top of the food chain with a succession of indirect channel tiers between them and the customer. They pushed programs and information downstream and attempted to “manage” their indirect channel. It just doesn’t work that way today. I’m not really sure it ever did. Your indirect channel represents a rich and diverse ecosystem of companies and individuals. This ecosystem is a community that is comprised of many smaller communities of businesses and people each with shared attributes and each sub-community is comprised of still smaller groups with shared interests. Companies wanting to be successful in harnessing the potential of their indirect channel ecosystems in the future will have to acknowledge that they are nothing more or less than members of these communities and that they must play an active role in collaborating with and facilitating collaboration among them. There is no food chain in contemporary business ecosystems. At a very high level, you know that the constituents in your ecosystem have some things in common: • They market, sell, support or recommend products or services like yours • They market to, sell to, service or support the customers that you want to reach • They are active where you are or want to be active • They want to make money Your task in segmenting this ecosystem is in facilitating collaborative conversations among companies and people who share common interests and then listening to and engaging in the dialogue. Do this and the ecosystem will form itself into multiple overlapping communities all by itself and if you possess the technology to make it happen and to monitor and track the interactions you will be able to learn more about those communities and have more effect on their behavior than you could ever imagine possible. Companies will have to acknowledge that they are nothing more or less than members of these communities and that they must play an active role in collaborating with and facilitating collaboration among them.
  • 45. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 45 of 113 I will address this topic in more detail later in the chapter that deals with collaboration as we explore how to do it. But here I simply want to tackle the question of why you should. Earlier I talked about behavioral change in the context of communication methods and preference. I also referenced a shift in the way individuals are influenced - by the opinions and expressed consensus of fellow community members than by companies. Logically then it follows that building communities, facilitating collaborative conversations, and through them encouraging members to endorse your company, your products and your strategies will play a big part in generating positive feelings about you and influencing positive behavior. What is more, eventually the community will become self-sustaining and a font of knowledge for all of its members. In time reducing the need for you to fuel conversations and provide answers and support. Since you facilitate these conversations, they take place on your systems and the output can be recorded and analyzed you can now use this data to create usable segmentations of your communities based upon the groups and discussion topics to which they subscribe, their shares, likes and comments. This in turn enables you to engage in much more effective targeting of conventional communications. Better targeting and topic relevance improves response rates and outcomes. We will address much more of this later. Facilitate collaborative conversations among companies and people who share common interests.
  • 46. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 46 of 113 Chapter 5: Indirect Channel Recruitment In the previous chapters, we examined methodologies for identifying the attributes of suitable indirect channels and for segmenting those indirect channels into the most appropriate groups. Now it is time to get those indirect channels on board. What’s in it for Me? Many companies now throw together a few deliverables that are cheap and easy to deliver and dress them with a logo and a brand name. This was fine in the days when the market was less crowded, less competitive and when companies could differentiate themselves through their unique technology. But in the age of technology commoditization and convergence, most lack the means to compel their indirect channels to work with them simply because their product was the best or the only available. Today, indirect channel programs themselves have to be the differentiator and through them, a company needs to convey actions as well as words that motivate indirect channels to work with them rather than their competitors. But what do indirect channels want to hear? In essence: • You will develop products or services that are superior to your competitors • You will create a desire within your mutual customers to buy new products / services or upgrade from existing ones • You will invest in demand generation • You will make customers receptive to buying your products and your brand • You will direct customers to your indirect channels • You will direct your indirect channels to potential customers • You will minimize channel conflict • You will provide the necessary information, education, tools and resources to assist your indirect channels in marketing, selling and if necessary supporting your products • You will ensure that the sale of your products / services will prove to a be a profitable enterprise • You will make it easy for indirect channels to augment your product / services offering with complementary products and value added services • Your will ensure that your products / services deliver on their promise, that they are of merchantable quality and reliable and encourage repeat purchases • You will, throughout be easy to do business with and treat your channel indirect channels with integrity and respect Today, indirect channel programs themselves have to be the differentiator and through them, a company needs to convey actions as well as words that motivate indirect channels to work with them rather than their competitors.
  • 47. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 47 of 113 • You will facilitate collaboration between you and your channels and among your channel communities • You will communicate with them when, how and how often they choose to be communicated with • You will provide easy access to the information, tools and resources they need to be successful This constitutes your channel value proposition. Many of these expectations depend on having great products but if I had a Dollar for every time a company told me they had the best products but they couldn’t motivate their channel to sell them, I’d be a very rich man indeed! In fact if you get the other elements of the value proposition right and implement them better than your competitors, it is entirely possible to have inferior products but a far more dedicated and motivated channel than they do. We will discuss best practice in indirect channel program deliverables later in the eBook, but at this point, there are two important principles to remember: 4. The best recruitment campaign in the world will fail if your indirect channel program is not compelling 5. The notion of ‘build it and they will come’ - having the best program but failing to market it and proactively and systematically drive recruitment will also fail Recruitment Campaign You would not set out to recruit a sales person or marketer without first documenting the following: • For what purpose is the role being created? • What is the context for the appointment? • What are the goals, fiscal or otherwise of the individual to be hired? • What resources will be made available to the individual to assist them in achieving their goals? • Which markets or customer segments should they be targeted upon? • To whom do they report? • How will their performance be monitored and reviewed? • How will good performance be rewarded and poor performance punished? • What compensation and benefits will be given? • By what contractual obligations will employer and employee be bound? • Why should the candidate join you instead of another company? If you get the other elements of the value proposition right and implement them better than your competitors, it is entirely possible to have inferior products but a far more dedicated and motivated channel than they do.
  • 48. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 48 of 113 You would also establish a candidate profile and a brief to the recruiter. Similarly, you should not embark on an indirect channel recruitment campaign without ensuring that you are clear on all of these points: • Why are you looking to recruit new indirect channels? • What does it mean for the indirect channels you already have? • What is the context for the campaign? • What do you want your new indirect channels to do for you? • What targets will be set, if any? • How will you establish joint business plans and ensure they are implemented? • What resources will be made available to new indirect channels to assist them in achieving your shared goals? • Which markets or customer segments should they be targeted upon? • How will the indirect channel make profit from the relationship and how much? • What other benefits are on offer? • Who will be responsible for managing the relationship? Who or what will be their point of contact? • How will their performance be monitored and reviewed? • How will good performance be rewarded and poor performance punished? • By what contractual obligations will company and indirect channel be bound? • What makes your package of offerings better than any other company with whom you are competing for the indirect channel’s attention? • Which channels of communication will be used to drive the campaign? Ultimately, your aim is the same - to recruit the best indirect channel organizations, sales people and marketers to work, albeit indirectly for you to help you to take your products to market at the expense and exclusion of your competition. If you think of it this way, your recruitment campaign will proceed with greater vigor and purpose and both you and your potential ‘candidates’ will have a much clearer understanding of your objectives. Recruitment Process Whether you adopt the ‘big bang’ approach of launching a new indirect channel program with accompanying PR campaign or the more low-key approach of augmenting your existing indirect channel-base as part of your existing program, it is important to preface any communications with messages reinforcing the points above. You must set the context of the recruitment, why you are doing it, what it will mean for you, what it will mean for
  • 49. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 49 of 113 existing indirect channels and most importantly what it will mean for and how it will benefit your target indirect channels. Putting the actual marketing communications activities to one side; we will deal with them in later section, let’s turn our attention to creating a low cost and efficient means of inviting indirect channels to join you and processing their applications. Mediums Email has been the de facto standard communication medium for many years but it is in decline and also statistically weak in generating responses. Spam filters and security software have exacerbated the problem. As we discussed earlier it is generally in decline. Social media has, by contrast exploded in popularity as a communication medium. It has a role in channel recruitment in three ways: 1. As a medium for promoting membership of your program in general terms 2. As a means of viral dissemination of your program and associated value proposition 3. As a means of new recruits re-messaging their participation in your program to their own social networks The first two can be achieved through any concerted social marketing campaign. The latter requires the necessary social through-marketing technology such as Relayware. Targeted Campaigns You must remember that in order to have whole companies to partner with you, you must start by recruiting individuals – companies don’t form relationships with other companies – people do. It is essential therefore that you gather accurate contact information; names, job roles, email addresses, social ID’s etc. of you are to target the right people with the right message. We discussed this in earlier chapters but here it is critical. Sales people will have different motivations to join your program to those of a marketer or support person. You must play to these motivations effectively in your communications if you are to succeed in making your campaign above average in terms of response. This means that you will need to engage in targeted and personalized campaigns using every conceivable communication channel including online, email and social media, segmented by organization type, market focus type and job role type and so on - communicating multiple value propositions to each. This takes time and effort but the results will be worthwhile. Communications should direct the individual ideally to an online or mobile registration point within which you can gather more information about them, populate and enrich your database whilst ascertaining if your judgment in inviting them to join you was correct. The Communications should direct the individual ideally to an online or mobile registration point.
  • 50. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 50 of 113 same registration point must be available via your corporate website to catch stray applicants that you may not have invited or who missed your recruitment campaign first time around. Since by now you will have devised your indirect channel selection and segmentation criteria, you may now begin the process of mapping applicants against them and either approving or rejecting their application. This can be an arduous and time consuming task best automated especially if your campaign has been broad. Needless to say, ensure you have the necessary systems and/or business processes in place before you begin. On-Boarding Imagine going on a first date with someone in which you have a vague but as yet unqualified interest and half way through your appetizer they start talking about taking a long vacation together or having children. “Slow down!” I hear you cry. But indirect channel development is a lot like dating. Move too fast too soon and the relationship may come to an abrupt end leaving you wondering what it was that you said or did wrong. Indirect channels tell me all too often about companies who initiated a recruitment campaign promising a commitment to a long-term strategic partnership. They committed to the provision of a range of benefits, information, tools and resources to help them to profit from the relationship. But the minute they expressed their interest, the company insisted on training them, certifying them, setting revenue targets and joint business planning. They wanted them to close poorly qualified sales leads and register deals. Incentive programs followed and meanwhile, they cried, “slow down!” In signing up to your program, a new recruit has likely said to you: • “I am interested in partnering with you. What now?” • “I may have a short term requirement to sell your product but let’s see how this goes.” • “I bought into your value proposition but I need to see how you deliver.” • “I like your story, now let’s experience the substance.” • “I don’t like or I am losing interest in your competitor. Can you do any better?” …or something similar. What you do in the coming weeks and months will set the tone for the coming years. Prematurely introducing programs or initiatives that require the indirect channel to make more commitment than they are ready to give or which require them to make investments that you can’t or won’t match may turn them off. Before an indirect channel can reasonably be expected to proactively sell or market your products, you need to nurture them through a number of steps. Remember the relationship lifecycle we discussed before: What you do in the weeks and months following recruitment will set the tone for the coming years.
  • 51. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 51 of 113 This illustrates the steps to consider: • Before you can optimize indirect channel performance, you need to be able to manage and measure performance, • Before you can manage and measure performance, you need to be able to provide adequate service and support to facilitate it, • Before you can provide service and support for sales, marketing and customer service activity, you need to facilitate collaboration in those and other areas, • Before you can collaborate on sales, marketing and customer service, the indirect channel must be sufficiently motivated and/or incentivized to work with you, • Before you can incentivize and build loyalty with an indirect channel, you need to have adequately developed and “enabled” them to perform the tasks that you require of them, • And before you enable them, you need to recruit and then on-board them so that they feel sufficiently ready, willing and able to invest the time and resources necessary. Going back to my earlier analogy, on-boarding is a courtship. A succession of small steps taken at the indirect channel’s own pace towards a close and lasting indirect partnership in which both parties have made a significant investment of some sort. I’ve seen some a handful of well executed on-boarding strategies and they typically work something like this: • Immediately after registration, send them portal and (if you have one) mobile app download instructions and login credentials together with a soft welcome pack • Prepare your portal and mobile app so that they display welcome content and a short video tutorial “how to work with us” for the first-time visitor • Consider also a “how to use our online tools and resources” video tutorial • Invite them to update their profile and share their own interests in the partnership to help your targeting • If they don’t engage immediately, be prepared to follow up very frequently by automated time-triggered mail, push-messaging and by telephone in those early days while they still remember why they took the first step • After the first portal or mobile visit, track their activity constantly. Apply scoring and nurturing techniques to segment your channel base into usage / engagement / activity-level groups and target them with communications designed to increase activity • Make ongoing use of time- and event-triggered communications, e.g. “they did X today so in Y days, we’ll send them a communication about Z.” using email and social updates Statistically, indirect channels who were well nurtured during the first 6 months stay with you and go on to deliver higher performance for longer.
  • 52. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 52 of 113 • Use social media to deliver short “teaser” messages – video clips on YouTube, Tweets and photos on Facebook but always take them from there to your portal to access the “full story” where you can track their activity • Introduce next steps at a pace that’s suitable to the usage / engagement / activity- level group • Introduce training gently. No tests, certification or anything too onerous at first. Get them used to watching short, interesting video clips of no more than 5 minutes to wet their appetite • Ensure that there’s a tangible benefit for them in completing any task that is consumptive of their time and resources • Re-enforce the partnership value proposition regularly • Ensure that portal / mobile content is tailored not just too indirect channel organization and individual profile but to an individual’s usage / engagement / activity-level. They should see content that feels like it was created for them or people like them • Content should be designed to encourage them to take the next step in the relationship • Encourage them to enrol in and interact with your communities • Keep communicating regularly with messaging and content relevant to their usage / engagement / activity-level group designed to lead them into the next stage of the partnership • If they falter or appear to have lost interest, you may be moving too fast or too slowly for them. Reengage directly and ask them for their feedback so that you may understand what you can do better to help them to the next level Effective on-boarding costs time and money. But it’s worth every penny and every moment you invest. Because if you fail to execute well, the rest of your program will typically have an audience of less than 20% of your indirect channel base. The remainder will fall by the wayside and most likely they will be working proactively with your competitors. Statistically, indirect channels who were well nurtured during the first 6 months stay with you and go on the deliver higher performance for longer. Key to long-term success however is how well you take the next step; enablement and development. Effective on- boarding costs time and money. But it’s worth every penny and every moment you invest.
  • 53. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 53 of 113 Chapter 6: Enablement, Education and Development So now you have successfully recruited your preferred indirect channels. Now you have to educate and develop their staff - sales, marketing and technical - to sell, market and support your products more effectively (ideally to the exclusion of competitive products). You must provide them with the skills and knowledge to adequately perform the functions you had in mind for them when you recruited them. If your product is mature and advanced in its lifecycle or one that has become a commodity, then you must at the very least impart basic product knowledge and feature differentiators versus your competitors. If, however, your product is earlier in its lifecycle or you require your channel to assist you in developing the market for it, then you will be required to provide them with much more. Because the approaches for indirect channel enablement differ so much according to the nature of the product being sold, we will examine these two scenarios separately. Market Making Unless a channel can be motivated to create or develop a market for a company through the adoption of a highly restricted distribution model, higher margins or other incentives, they would typically prefer to leave this task to the company while simply fulfilling demand. The challenge for the company here is that among the channels’ greatest assets are its proximity to, relationship with and influence over the purchasing decisions of their customers. Hence it is difficult for a company to convince customers that they need to invest in the latest technology by means of conventional marketing activity alone. The big companies fair better here as they often benefit from direct-touch relationships with key accounts. The rest, however, must educate their indirect channels to the same level as they might educate their own staff. The purpose of this step is not to discuss training content or methodology; this is neither our expertise nor intention. Rather it is to share what we see as best practice in general execution of this component of the indirect channel lifecycle and the programs that address it. For example, let’s look first at training delivery for ‘market makers’. Ten years ago, almost all training was delivered face-to-face in a classroom environment. Today computer-based or online training delivery has superseded this for all but specialist technical training. It’s easy to see why: • Online training delivery has improved in variety, quality and accessibility • Internet access and bandwidth now support the delivery of multi-media rich content to any device • Users are now well accustomed to using computers, mobile devices and the internet for accessing multimedia entertainment and information Unless a channel can be motivated to create or develop a market for a company through the adoption of a highly restricted distribution model, higher margins or other incentives, they would typically prefer to leave this task to the vendor while simply fulfilling demand.
  • 54. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 54 of 113 • Standards have been established (SCORM) to which software and content providers subscribe • Specialist content and test creation software has become easier to obtain and use and increased competition in the market has driven down the costs • Few companies can now afford to operate in-house training functions or outsource to 3rd parties • Product lifecycles have become ever shorter meaning that training frequency has necessarily increased • Online delivery offers the flexibility and convenience of language, time and place • Mobile technology offers even greater levels of convenience In summary, it’s easier, cheaper, more convenient and more accepted today. Leading companies integrate online functionality with their portals through the use of B2B collaboration and communication software to deliver and manage complex and frequently changing training programs in multiple languages at any time and in any place. Others utilize conventional Learning Management Systems (LMS’s) primarily designed for internal training delivery although these often have significant limitations for external programs. A critical component is verification of participation and knowledge transfer. Several excellent content creation tools exist which not only generate the courseware but also the testing materials and are capable of outputting test results. This facilitates online testing with questions in a wide variety of formats and test scoring. When implemented in conjunction with an LMS or external collaboration and communication solution, this will allow a company to track training participation, measure personal learning performance and test results and aggregate these by individual to contribute towards personal certification and, where this impacts company accreditation to manage this also. Of course, such analysis can be extremely time-consuming if managed manually. We would advocate some form of automation as detailed above if you have a significant number of indirect channels. However, testing, certification and accreditation are excellent collaboration tools and incentives to encourage indirect channels to learn to sell, market and support for you during the market-making phase. What is more, if they are a prerequisite for being able to perform these roles at all and meeting such criteria is commercially viable for the indirect channels given the opportunities on offer, then they will represent incentive enough to drive indirect channels to participate in your training program. If the numbers don’t add up, then you may additionally need to consider some of the methods detailed in the next section. Fulfilment Where your indirect channel is selling a volume product which is more mature, which has become a commodity or has multiple competitors, one has to take a very different approach to imparting knowledge. In this scenario, channel indirect channels often merely Leading companies integrate online functionality with their portals through the use of B2B collaboration and communication software.
  • 55. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 55 of 113 fulfil demand from their customers i.e. they sell what the customer wants to buy, they sell what they have in stock, or else they sell what they know best. This presents a company with some challenges. Principally, how to encourage indirect channel staff to take valuable time to train on your product when: • Selling it does not represent an incremental sales or margin opportunity • They already understand the basic concepts of the product without your help • They already know about and perhaps sell your competitors product • The product may have a low unit value • They don’t currently sell or stock it • The margins or incentives to sell competitor products are more attractive than yours • Your demand generation activities do not generate enough ‘pull’ from their customers In this scenario, conventional online training is not attractive to indirect channels and while you may develop the most compelling training program with the most attractive and entertaining multimedia courseware, time and time again, companies fail to attract trainees. You have to try much harder and you must give them a compelling reason to take the time to learn about your products. Fortunately, some very successful programs in which companies have used every trick in the book to drive indirect channel traffic to the training section of their portal or mobile app. The main methods are: • Closed-loop marketing of product lifecycle events e.g. launch or refresh tied to portal pages or mobile app containing passive learning materials • Extensive use of social media for promotion leveraging YouTube for delivery • Personal incentives - cash, voucher or gift - linked to both sales performance and points earned through training participation • Company incentives - rebates, margin or MDF linked to both sales performance and numbers of trained staff • Company or personal inclusion within lead generation program • Availability of training content via mobile device and mobile apps for greater convenience with in-app promotion No indirect channel training program related to commodity products will succeed unless the channel can clearly see some tangible business or ideally personal benefit associated with participating in it. Also critical to your success is the understanding of your audience. Sales people in particular will rapidly lose interest if: No indirect channel training program related to commodity products will succeed unless the channel can clearly see some tangible business or ideally personal benefit associated with participating in.
  • 56. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 56 of 113 • Accessing the training requires them to remember multiple login details and passwords • They need any cookies or widgets to be installed on their PC first • The training courses are boring • The training course are too long • They can only access it on a PC – you must support tablets at the very least • They can’t take a break and return later from where they left off • They are not informed of their progress through the course on an ongoing basis e.g. ‘you are now on part 3 of 5’ • They have to sit a test for no clear reason • The test is too difficult to pass Keep it simple - Inform and Reward. And do these things in a way in which they will be appealing to your audience. Of course, addressing all of these needs and preparing the very best content is of no use if you lack the ability to track who attended which training module, at what time, whether the training was fully completed and whether sales increased as a result. Keep it simple – inform and reward in ways that are appealing to your audience.
  • 57. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 57 of 113 Chapter 7: Indirect Channel Motivation and Incentivization Sales people sell for many reasons; their innate competitiveness, their desire to be the best, a need to gain approval from their management and peers and their appetite for career advancement all play a part. But by far the greatest driver of sales activity is financial compensation and benefits. Hence when a company employs a direct sales force, motivation is a relatively straightforward affair: • Pay a competitive salary • Pay attractive rates of commission on sales • Offer a compelling package of benefits to the sales person and their family But there are also several other less tangible sources of motivation: • Provide them with desirable high quality products that offer competitive benefits • Generate demand and channel it to them in the form of sales leads • Own a strong brand behind which they can feel some sense of pride to unite or at least form a positive personal attachment • Provide them with the sales tools and resources necessary for them to do their job • Minimize bureaucracy and red tape in order to be an easy company in which to operate • Celebrate and reward success • Be seen to reward performers and punish / marginalize persistent failures • Be prepared to offer additional incentives when the business requires its sales people to go the extra mile There are, of course many more but these are common to most companies. What is also common is that your direct sales people have a contractual obligation to sell on your behalf and yours alone. They are also obliged to meet your performance targets consistently or else put their job at risk. What is more, you manage them, you direct their actions and therefore their performance is itself a direct result of the effectiveness of your own management. But can these principles be applied to the motivation of an indirect channel where none of these latter conditions apply? Well it is certainly the case that unless you are a market leader, indirect channel management by coercion does not work. And if you are a market leader, such coercion can only apply to the indirect channel’s business - not their individual sales people. For example, you may penalize an indirect channel partner’s business by offering fewer discounts and therefore less margin should they fail to meet your accreditation criteria. But this penalty may not be felt by the individual sales person at all By far the greatest driver of sales activity is financial compensation and benefits.
  • 58. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 58 of 113 and if it is, faced with weaker margins and less competitive pricing, the sales person will often sell a more attractive competitive product instead. Hence, indirect channel sales people must be motivated and incentivized to sell your products especially when, as is most often the case, competitive products are available for them to sell. It goes without saying that indirect channel sales people are just as motivated by money as your own but you have little or no influence over what they are paid or how they are compensated. Interestingly however, if we review the list of less tangible motivators above, we can see a direct correlation between the needs of direct and indirect sales people from the company. It is through addressing these that you will have more success in winning over your channel sales people. Being the Company of Choice Indirect channel sales people are like any other. They prefer to sell brands that they know and trust and that require a minimal amount of selling to get the deal. They are also much happier having the company create demand for their products in the market without having to do all of the work themselves. With this in mind, here are a few recommendations: 6. Generate demand and be seen to do it. Whether your marketing budget is $1,000 or $10,000,000 per month, give your channel advance notice of what you will be marketing, to whom, when and via which medium. This makes it much easier for them to capitalize on your activities with their customers. Give them the opportunity to leverage your marketing investment with sales and marketing efforts of their own. This sounds obvious but indirect channels are usually the last to find out about company campaigns! If you can share your campaign materials with them and even let them customize and execute joint campaigns of their own, all the better. 7. Allow brand-hijacking. Your branding campaigns do little to drive demand but they do create brand awareness and brand association. Indirect channels will prefer to work with companies whose brand values are closely aligned with their own or where they can only aspire to have such brand values themselves. Quality, reliability, innovation, performance, speed. Think about this because if your brand image isn’t one that your channel may want to share, they will be less inclined to proactively sell and market on your behalf. Share your branding campaigns with your channel as well your demand generation campaigns. Let them hijack your brand campaign and turn it into a direct demand generator by supporting co- operative marketing activity. 8. Channel demand to your best indirect channels. When a customer is influenced to buy as a result of your website or closed-loop marketing campaign, direct them towards your indirect channels to fulfill that demand. If you don’t have an indirect channel locator tool on your website yet - get one. Customers won’t dial your 0845 Indirect channel sales people are like any other. They prefer to sell brands that they know and trust and that require a minimal amount of selling to get the deal.
  • 59. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 59 of 113 number and hold for an agent to find out where they can buy, they may simply go elsewhere. Modern indirect channel locators don’t just search on postcode. This is because geographic proximity is only one profile attribute of many. Such a tool needs to match customer size, horizontal and vertical market, product requirement, value added services requirement and so on and it must search against your most recent and most accurate indirect channel database. It should also offer the customer a choice and notify the selected indirect channel(s) (with a lead) that a referral has been made encouraging them to proactively follow it up. 9. Give the leads to closers. If your marketing campaigns generate sales leads, make sure that they are given to the most appropriate person (a closer) within the most appropriate indirect channel without delay. Impose an SLA for lead recipients to respond and contact the customer and monitor the lead until it is closed whilst offering your support to the indirect channel to close it. Reduce the amount of manual intervention within the lead management process in your own company. Celebrate success and reward closers with more leads. 10. Accept leads from indirect channels and reward their transparency. If an indirect channel sales person registers deals in progress with you early in the sales cycle, it allows you to offer support or intervene to help win them. Make the registration process simple and available online. Make it easy for the indirect channel to update deals and request physical or pricing support. If a deal is won, reward the indirect channel generously and if someone else poaches the deal on price, reward the registrant anyway. You probably wouldn’t have won it without them. Some companies struggle to get indirect channels buy in for programs such as this due to a lack of trust or motivation. Make it worth their while, apply your rules for consistently and you will benefit from more new business, greater indirect channel loyalty and a very comprehensive sales pipeline. 11. Keep it simple. In countless indirect channel satisfaction surveys, there are a number of consistent stand-out comments made by indirect channels. They say that they like to work with companies who are “easy to do business with”. There is nothing wrong with being disciplined, well organized and even process-driven but being bureaucratic and forcing your channel indirect channels to endure excessive and painstaking administration or to jump through hoops unless absolutely necessary will demoralize and de-motivate them. Before applying any practice to your indirect channels or mandating any business process, think first if it will benefit the indirect channel, consider alternatives and if none exist. Needless bureaucracy is the preserve of the market leader. If you are not one, keep it simple! 12. Gameify the completion of tasks and achievement of milestones. 13. It’s nice to be nice. Your corporate culture and indirect channel-facing demeanor matters too. Your channel indirect channels want to be treated with fairness, respect and courtesy. And no-one likes an arrogant company. These things really do matter and can make a significant impact upon the levels of motivation your indirect channels exhibit towards working with you. As individuals we prefer
  • 60. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 60 of 113 working with people we like or who are like us. As companies, we should always ensure that we are: • Respectful • Courteous • Consistent • Supportive • Flexible • Easy to contact • Sales- and marketing-led • Keen to “do a deal” Show Me the Money Many of us have airline frequent flyer card. When close to being relegated from a higher tier, we can go to extraordinary lengths to make up the annual points total. And when the airlines are having a slow quarter, we often help them out by taking them up on their offers of double points or free upgrades. We don’t fly with any other airline unless there is no alternative and we do all this because of a plastic card and a free cup of coffee on a comfortable chair. But then deep down, so many of us are sales people at heart and we respond well to loyalty programs and incentives. 14. Loyalty programs. Such schemes are by definition strategic. In other words, such a program lasts for a long time or perhaps indefinitely and sets out to reward indirect channels who are consistently loyal to your brand or product range over time. There are a variety of different models most of which reward sales with points and points with rewards of some sort: • Gift catalogues • Vouchers with a monetary value • Vouchers for goods or services • Credit or debit card accounts All such schemes can work well and some are better suited to specific countries and cultures than others. Success can be governed by local pay and conditions, type of reward, threshold for entry and the time taken / effort expended to secure the all- important first reward. But such programs can be incredibly expensive to operate, promote and fulfil. There are many marketing agencies out there eagerly waiting to take your money so consider automation in house before taking this route. 4. Incentives and promotions. Tactical campaigns can be much more effective at helping to mould behavior amongst your channel where short term goals become paramount e.g. selling out end of line product, supporting a product launch etc. But you must be lightning fast and communicate directly with the channel sales people. Deep down, so many of us are sales people at heart and we respond well to loyalty programs and incentives.
  • 61. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 61 of 113 Don’t rely on distributors or your channel account managers to do it - they won’t unless there’s something in it for them as well and by the time they reach everyone with the message, it will all be over. Tactical incentives are a great way of solving short term problems or creating a buzz and increasing activity for a short period of time but build them in under the umbrella of your strategic loyalty program and don’t run them too frequently or too regularly. 5. Top performers. Years ago, when margin was more plentiful, companies used to treat their top channel performers to no-expense-spared ‘business trips’ or ‘conferences’ in exotic places. The problem was that it was inevitably the same faces every year and the events became clichéd thank-you’s for services rendered rather than an effective incentive for greater performance. But rewarding top performers can be effective if properly implemented and well communicated. It is important to consider your objectives first though. What defines true success? What really makes a difference to you? For example, is it better to reward an indirect channel for winning new customers rather than simply selling the most to the one’s you already had? 6. Investing in collaborative marketing. “MDF”, “soft dollars”, marketing rebate - whatever you call it, it has a poor reputation for delivery of a good return on investment and throughout the history of the industry, most has ended up propping up channel balance sheets. So much so that companies have introduced many restrictions, limitations or else withdrawn it all together. This is a mistake. It is also a mistake to believe that administering such funds is difficult and time consuming. A suitably-equipped external social collaboration and communication system can manage these funds with ease and link in to both your financial systems to manage accruals and credits and your portals to facilitate self-service funding applications, approvals, redemptions and ROI reporting. Giving access to such funding in a disciplined, controlled and administratively ‘low-impact’ manner will encourage proper use and will facilitate comprehensive reporting and analysis to ensure your get value for money and a good return whilst motivating your indirect channels. 2. Gameification. This quite modern term describes an incentivization methodology that has been around for a while but which has become widespread since the advent of social media and mobile devices. In this context it can be defined as: • Applying game design thinking to non-game applications to make them more engaging • Bringing together game mechanics and marketing to create engagement and solve problems • Giving people challenges or missions to accomplish, tracking the progress, giving them status, and giving them a reward I have seen it used effectively to drive selling behavior but perhaps gamefication’s biggest benefit is in encouraging indirect channel personnel to engage in more
  • 62. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 62 of 113 mundane but nevertheless important activities that help the vendor or the wider ecosystem: • Self-profiling • Recruitment and onboarding • Training • Incentives • Joint sales and marketing • Community engagement • Portal or mobile app usage • Survey participation Participation and completion of tasks can be rewarded in a number of ways for example: • Products • Consumables • Sales and marketing tools • MDF or joint marketing $ • Community status in the form of a badge, such as identifying the winner as an "expert” • Early access to content • VIP status at events • One-on-one time with executives Of course gameifying participation in your indirect channel program is incredibly complex and requires a suitably equipped external collaboration and communication solution like Relayware. Being a Pleasure to Do Business With Now I know what you’re thinking. “Is he for real?” But I am quite serious. Sometimes, when the pressure is on, the market is tough and we just need to hit our revenue goals we forget that as marketers and sellers we’re in the people business and people buy people. They also respond well to being treated with courtesy and respect, honesty and integrity. They like working with people and companies who exhibit an interest in their wellbeing and success and who in word and deed go out of their way to improve both. And they like to work with people who are essentially and for want of a better word, “nice”. We’re in the people business and people buy people.
  • 63. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 63 of 113 Building a reputation as a company that is a pleasure to do business with takes time but word spreads fast especially since the advent of social networking. It requires you to develop a culture in your company and an ethos within your workforce that acknowledges that indirect channel employees are at least as important as customers and should be treated as such. Of course with familiarity comes relaxation and the relationship matures into camaraderie and teamwork but you have to earn this. Unquestionably, those companies who have “partnering” in their DNA do far better with leveraging the full potential of their indirect channels than those companies who do not and those companies always score most highly in indirect channel satisfaction surveys. Being a pleasure to do business with is sometimes the most powerful incentive of all when it comes to maximizing channel performance.
  • 64. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 64 of 113 Chapter 8: Indirect Channel Collaboration Proven Methods In the 1990’s and 2000’s, collaboration with indirect channel networks centered squarely around plugging the gaps - either extending a company’s reach into geographic, vertical or horizontal markets or else utilizing channel indirect channels as a means of augmenting a company’s capabilities where services were a key component of the solution required by the customer. In this way, companies gained a more complete offering and were able to meet the needs of their customer wherever, whenever and however they were needed. Collaboration has taken many forms, the four key areas have been: • Education or learning • Professional or support services • Sales and pre-sales • Marketing We covered learning collaboration in Chapter 4, so here we will cover the remaining three plus the next generation of collaboration facilitated by companies for and among their demand-side ecosystems. Service and Support Collaboration Of the three, undoubtedly the most consistently well implemented has been collaboration in the provision of customer services. Starting first with break-fix warranty support by resellers themselves and then over time migrating to such work being carried out by large TPM’s. The most significant change to service and support collaboration has been the ability for vendor’s to provide access to information, tools and resources to service providers and their (field) service engineers. With their multi-channel communication capability and mobility solutions, external collaboration and communications systems can give personnel instant access to vast amounts of multi-media content to support them in their jobs. Portals and mobile apps accessing vast libraries of information, schematics and streaming video have transformed the lives of support staff in the same way that the GPS has transformed the lives of taxi drivers around the world. Sales and marketing collaboration has been less consistently well executed and typically with a number of stand-alone programs. I’ll cover the most common, good and bad. The most significant change to service and support collaboration has been the ability for vendor’s to provide access to information, tools and resources to service providers and their (field) service engineers.
  • 65. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 65 of 113 Sales Collaboration Lead Management Programs Converting company generated demand into sales leads which can be distributed in a fair and consistent manner to indirect channels most suited to close them has got to be one of the most basic initiatives to get right. Why? Because most companies spend a great deal of money on marketing but, as we have explored in earlier sections of this document, when you go to market through an indirect channel it can be extremely difficult to assess whether you are seeing a reasonable return on your investment. That’s because in general, you don’t talk to the customer and you consequently do not know why they chose to buy your product. Most of the companies Relayware encounter still struggle with lead management programs. The main stumbling blocks are: • Lead qualification: How to qualify a lead on behalf of an indirect channel? • Indirect channel selection: Which indirect channel should get the lead? • Lead distribution: How to issue the lead and to whom within the indirect channel? • Lead interaction: How would the indirect channel receive the lead, interact with it and update it? • Lead tracking: How do I know if the indirect channel followed up the lead? Did they close it? • SLA’s: What response times are needed and are reasonable? What to do if they’re not met? • Follow up: Who, when, what is the process, what are the prompts, what are the actions? • ROI analysis: Per campaign, how many leads generated, followed up, won, lost, pending, time to close, value? • Reporting and CRM: What did the customer buy? What else did they buy and will they buy again? Companies trying to manage lead management programs using CRM systems that are not fit for purpose or worse, they manage the process with spreadsheets should expect results that are predictable and disastrous: • Poorly qualified or ‘cold’ leads being issued to the wrong person at the wrong indirect channel • Leads being given to the same ‘preferred’ indirect channels every time • Poor response times • Lack of follow up • Poor or non-existent reporting Converting company generated demand into sales leads which can be distributed in a fair and consistent manner to indirect channels most suited to close them has got to be one of the most basic initiatives to get right.
  • 66. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 66 of 113 • Poor ROI Indirect channels are left wanting and companies feel cheated because their marketing investment and the leads produced appear to deliver poor sales in return. The simple answer is automation. There are a number of commercially available lead management systems either as stand-alone solutions or as integrated offerings as part of a PRM or external social collaboration and communication system that do a fine job. But if automation is not an option then manual processes can be made to work on a small scale. Some simple things to remember: • DO formulate a detailed workflow for the process • DO establish a clear set of business rules • DO develop a detailed understanding of each of your indirect channel’s geographical, technical, skills and market coverage limitations to ensure correct lead-to-indirect channel matching • DO define a consistent selection criteria to determine which leads go to which indirect channels and on what basis • DO insist on indirect channels signing up to SLA’s and response times • DO insist on accurate and timely reporting • DON’T distribute sales leads though your account manager’s unless they can exercise some degree of indirect channel-agnosticism • DON’T send leads to reseller principles or other top management, they will rarely find their way to the sales team and if they do, they will have gone cold by then • DON’T assume, check! Make sure you contact the customer shortly after distributing the lead to ensure that they have been contacted and that their experience was a positive one Some of the most sophisticated and the most successful programs involve automation, allowing internal or 3rd party sales agents to be able use a PRM or external social collaboration and communication system to drive the campaign management and prospecting activity. They can create and document leads, build a sales pipeline, qualify and then select the most appropriate sales person at the most appropriate indirect channel to receive the lead and deliver it via the indirect channel portal and email. The lead can then be tracked through to closure and the indirect channel sales person is able to request support (e.g. special pricing) online and get that support within hours or minutes. Furthermore, tracking and reporting is made easy and whilst managing the opportunity from campaign to closure the company was able to effectively assess ROI. Some of the most sophisticated and the most successful programs involve automation.
  • 67. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 67 of 113 Deal Registration Programs Providing channel indirect channels with a means to register and track their own deals or leads with you is an excellent way of developing a holistic sales pipeline and forecasting process whilst minimizing channel conflict and potentially rewarding indirect channel loyalty and transparency. Such programs fail for a variety of reasons: • Lack of publicity • Lack of incentive for the indirect channel • Inconsistent company behavior, disregard for incumbency and/or customer preference leading to greater channel conflict • Indirect channels able to register deals regardless of incumbency or customer relationship • No win - no reward for the registrant regardless of whether the company wins the deal or not Whether automating the process or not, you will have to think long and hard about workflow and business rules once more or else these programs can be costly failures and create a great deal of channel dissatisfaction. The rewards have to be worthwhile and attractive - for example – an indirect channel sales person registers a deal with you and drives the sale - the registrant could receive a reward even if the deal is ultimately won by a competing indirect channel. All too often channel partners lose interest when a low cost competitor wins a deal on price when the registrant put in all the work and the company refuses to pay out. Deal registration must be quick, easy, accessible online and consistently executed by the company. It needs to be marketed continuously to your indirect channels too otherwise interest and activity will fade. A word of warning though, deal registration programs can be almost impossible to manage manually unless numbers of registrations are expected to be very small. The process of validation, incumbency checking, approvals, closure verification and reward remuneration can tie up significant administrative, sales and marketing resources very quickly and very easily. Renewals Many of our customers are in the business of selling renewable software licenses or subscription based services. Increasingly these are becoming one and the same with the rapid growth in Cloud services. While the need to generate leads and new sales opportunities is as critical for these companies as any other, they have the added advantage of a (potentially) recurring revenue stream and the added challenge of protecting it from attrition or “churn”. Churn not only wipes out recurring revenue, it kills growth because few software companies have a business model that assumes a 100%+ The rewards for deal registration have to be worthwhile and attractive.
  • 68. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 68 of 113 new business revenue year on year. Most are reliant upon a 50%+ retention of their customers and their subscription fees just to stay afloat. Clearly, if churn > new business revenue you are in trouble. Most companies manage this quite well when they’re selling direct. The industry average for retention seems to range widely from 60-80% according to the type of software and the target market. In his excellent blog, Chaotic Flow, Joel York sets out metrics for Cloud service / SaaS customer retention and sets a goal of 80%. Any less than that for a young SaaS company and growth can be challenging. Direct selling is the key here. The customer is yours and yours alone. All you have to do is maintain their loyalty and keep the competition out. But for the purposes of this book, I’m interested in companies who sell subscriptions through an indirect sales model. This is the most common model in the B2B market and though many question the channel’s role in the sale of cloud services, I can tell you that the software companies we talk to think of little else. What companies fail to acknowledge adequately in my opinion is the impact of the relationship that their indirect channels have on their customers buying behavior – especially in the small and mid-sized enterprise market. Here the indirect channel can often act as trusted adviser and for example in the hi-tech market as an extension of the IT department or as a substitute for an IT department entirely. Such customers may have less loyalty to a given supplier than a consumer or large enterprise buyer and will very often view company marketing aimed at securing a renewal as something of an irritation or an irrelevance. Obviously much depends upon the nature of the product or service – complex, mission critical systems or those with intensive use by large user communities have less to worry about. But coincidentally and again in the hi-tech sector, SMB is the sector that is embracing the Cloud more than any other right now and many Cloud services, tools, utilities and ‘background’ applications like security and storage are far more at risk. So you would think that companies would pay a great deal of attention to driving indirect renewals wouldn’t you? Unfortunately, we have seen little evidence of this. As I say earlier, a great deal of effort goes into lead management and deal registration initiatives but these are focused entirely on new business. Renewals are driven through a pull model in many cases. This is disappointing and entirely avoidable. Due to the very nature of the business model, subscriptions are: • Predicable • Associated with a named customer • Associated with a named reseller / indirect channel • Associated with set dates or timelines • Typically managed in a system with a centralized database These factors are the foundation for an easily automated program in which a company can: Customers who have empowered their indirect channels and involved them proactively in the renewal process have typically experienced renewal rate increases exceeding 10 percentage points year on year in their first year with continued growth thereafter.
  • 69. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 69 of 113 • Make information available to an indirect channel online all of the information they need in relation to their customers and their subscriptions • ‘Firewall’ customer information according to indirect channel incumbency • Issue time- or event-triggered renewal reminders to incumbent indirect channels in plenty of time prior to expiration • Enable the indirect channel to manage the renewal as if it were a new sales opportunity • Associate discounts, rebates and rewards with successful closure of renewals (which have an inherently higher margin due to the lower acquisition costs) All of these things can be achieved by linking your external collaboration and communication system to your subscription / licensing database via integration or data loads. Relayware features an app in it’s sales collaboration suite that offers this very functionality from Professional Edition and above. In practice this segments your sales pipeline into three; company initiated new business opportunities, indirect channel initiated new business opportunities (deals) and license / subscription renewals; in other words new and recurring revenue. Customers who have empowered their indirect channels and involved them proactively in the renewal process have typically experienced renewal rate increases exceeding 10 percentage points year on year in their first year with continued growth thereafter. So essentially, this is one of those components of your B2B collaboration and communication strategy that becomes a must simply because of the very high levels of ROI and the very short timescales in which they can be realized.
  • 70. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 70 of 113 Marketing Collaboration Joint Marketing In its simplest form, this is providing marketing contacts within channel indirect channels with advance information in relation to your own marketing campaigns and providing access to marketing materials to enable them to run their own in parallel. Simple, but often poorly executed. In practice, indirect channels typically find out about company marketing campaigns at around the same time that their customers do. While we all know that planning, budgeting and implementing any marketing campaign can take many days or weeks, companies most commonly leave their indirect channels with insufficient notice to develop their own campaigns and run them concurrently. This is quite simply insane. Indirect channels are often eager to find new ways to communicate with their customers and new messages to communicate to them. If they and you can leverage your collective investment and your collective firepower simultaneously and with a consistent message you have a chance to multiply your return on marketing investment significantly. What it takes to succeed is for companies to see indirect channel marketing teams and marketing budgets as extensions of their own resources. Create a virtual marketing team or community, protect your confidentiality with NDA’s if necessary but share information about upcoming product launches, promotions, demand generation campaigns and even branding campaigns by whatever means you have available. There are a number of tools on the market along with agencies able to support online co- branded collateral creation and these ensure that when an indirect channel does participate in collaborative marketing, they can adhere to your brand, message and creative look and feel which again serve to maximize impact for the company. Sub- programs work best when linked to market development fund programs, such that the company contributes toward the cost of co-op campaigns as and when they are implemented in adherence with their own guidelines. The key here though is timely communication and information sharing amongst your channel indirect channel community. On this note, in our experience, company databases of channel contacts on average hold less than one marketing contact per eight company records! Remember, you can’t market through companies, only through people! While we all know that planning, budgeting and implementing any marketing campaign can take many days or weeks, companies most commonly leave their indirect channels with insufficient notice to develop their own campaigns and run them concurrently.
  • 71. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 71 of 113 Market Development Funds or MDF We talked about the pros and cons of MDF as an indirect channel incentivization tool in the last chapter. Now let’s look at it as a practical facilitator for collaboration. Indirect channel marketing budgets are geared around promoting the indirect channel and the things that they sell to their own customers. Few channel partners are philanthropists so if they are going to invest any portion of their own budget in promoting a company instead of themselves, there will have to be a very good reason or else a financial contribution by the company in question. In the 90’s and 00’s, MDF became little more than a bribe. Most propped up the balance- sheets of indirect channel who came to rely upon it to stay in profit. As margins fell for companies and the need for greater financial transparency and compliance became more critical, many companies tightened up the rules of MDF programs or stopped them altogether. Accrued MDF based upon a fixed percentage of sales can often be seen as an entitlement and can become a contractual obligation for a company to provide it. Instead it should be a discretionary fund to which channel indirect channels apply under strict guidelines for part financing of activities deemed likely to generate sales directly or indirectly for the company. It should be positioned as unlimited’ and an indirect channel should be able to utilize it as often as they wish provided that a number of rules are applied: • A company should look to pay no more than 50% towards any campaign or activity • Criteria should be laid out under which the 50% will be paid subject to achievement of agreed KPI’s • Ideally campaigns or activities should be implemented through company-aligned agencies through which they (and hence the indirect channel) may enjoy volume discounts thereby minimizing the cost of the initiative to all • Indirect channels should receive no payment from the company until after the activity has been completed • Indirect channels should demonstrate that they have achieved the prescribed KPI’s and reimbursement should be made accordingly • ROI should be tangible and measurable We have worked with companies who have implemented such a scheme to replace an accrual-based model. Their message: “more control but more available funds”. Naturally, if the MDF spent delivered a better ROI than before then, by definition, this meant more sales and hence more marketing budget. In reality, we saw significant reductions in fund redemptions but a significant improvement in the quality and alignment of indirect channel- led campaigns. Such campaigns were considerably more effective than before leading to better results. A virtuous circle and one which has seen massively increased marketing productivity from the indirect channels and massively decreased company costs whilst In the 90’s and 00’s, MDF became little more than a bribe.
  • 72. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 72 of 113 leaving the channel as a whole happy in the knowledge that unlimited funds are available to them so long as they can demonstrate that they will spend them wisely. Collaboration Among the Ecosystem As we’ve said many times, the last decade has seen a surge in usage of web-based personal and business networking services including the likes of Facebook and LinkedIn. It has long been the vision of some of the larger companies to be the catalyst for bringing indirect channels with complementary skills and services together to encourage collaboration not merely between company and indirect channel but also between all constituent members of the indirect channel ecosystem for the purposes of delivering the most comprehensive solution to their collective customers wherever they are in the world. Big players like Microsoft and Cisco have launched initiatives in recent years to set the trend yet over five years ago we presented at numerous channel-focused conferences on the topic of harnessing the power of the indirect channel ecosystem and leveraging the web to do it. You don’t have to be Microsoft to achieve it either. But you do need the right systems and tools. Building Networks Earlier we examined the evolution of the linear value chain between vendor, indirect channel and customer into today’s complex demand-side ecosystem. Within it, there are many businesses and huge numbers of employees engaged in marketing to, selling to and supporting our customers. Many of them simply compete so collaboration is not on their mind. However many have the capability and desire to partner or at least selectively engage in co-operation as the need arises when they themselves need to augment their capabilities or extend their reach. Where else would they turn but to the very ecosystem of which they are a part? But how do they do it? Where do they go to find a searchable database of companies containing an objective assessment of their skills, competencies and their geographic and market coverage? The answer is simple. By turning the basic principles of the age-old partner locator that we spoke about earlier on its head you offer the ability for your indirect channels to search for likely collaborators based on location, skillset, customer or market focus and service offering and to be the facilitator of secure communication between them. Network building tools like this should be a part of any external collaboration and communication system. It has long been the vision of some of the larger companies to be the catalyst for bringing indirect channels with complementary skills and services together to encourage collaboration for the purposes of delivering the most comprehensive solution to their collective customers wherever they are in the world.
  • 73. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 73 of 113 Facilitating Collaborative Conversations Vendors have offered basic forums, blogs and information tools for some time as a component of their indirect channel portals but few would describe them as being a resounding success. Many cheat and pose as members of their audience to stimulate dialogue. Social media and social networking have changed expectations of these tools and they have changed behaviors too. LinkedIn have done an excellent job of harnessing the power of a very large business social network and allowing it to take on a life of its own. The provision of tools to allow individuals to create discussion groups and then to invite people with common interests to join or else apply to join before engaging in collaborative discussions was a stroke of genius. It works - some of the time. By allowing individuals from all over the world with diverse interests to interact, share information, ideas and opinions, LinkedIn provides a great platform but precisely because of the nature of their network, they have also provided a medium for advertising and self-promotion. Many of the once invaluable groups to which I once belonged have been hijacked by individuals who blatantly market their products or services to other group members. So I did what I am entitled to do – I left the groups along with many others and moved on. LinkedIn showed us the way, but the execution does not work well in practice because the community is very open to start with. Imagine then a community made up of members from your demand-side ecosystem. Each individual or company has a role to play in the ecosystem but none is a potential customer. They have valuable experiences and have a thirst for knowledge that could make them more successful in achieving their business goals and servicing their customer. In a global, networked world in the depths of an economic downturn, specialization and focusing on what you are good at and can make money doing makes sense as does the forging of alliances with people and companies with complementary qualities and skills. So providing your indirect channel with the means to form groups and engage in collaborative discussions online via your portal or via an app on a mobile device places you at the center of the network and positions you as a facilitator of ecosystem collaboration. Why Facilitate Collaboration? I think it’s simple. We are living in the age of pervasive personal and business networking, perpetual availability for interaction and inter-business collaboration. Never has it been easier to identify and communicate with like-minded individuals and those with complementary business models with which to indirect channel. And never before have we all been so receptive to it. If the companies don’t make themselves the facilitator and sit at the center of their indirect channel ecosystem; encouraging and enabling collaboration, others will be only happy to do it for them. Providing your indirect channel with the means to form groups and engage in collaborative discussions online via your portal or via an app on a mobile device places you at the center of the network and positions you as a facilitator of ecosystem collaboration.
  • 74. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 74 of 113 Chapter 9: Communication Communication is defined as “the process of conveying information from a sender to a receiver with the use of a medium in which the communicated information is understood the same way by both sender and receiver.” Effective communication can be challenging enough between two people who know each other well, who are familiar with each other’s thoughts, ideas and communication styles and who are in close physical proximity to each other. It becomes more difficult for a company attempting to communicate with the indirect channels with which it has the most intimate of relationships. But what of the difficulties faced by countless companies who must communicate daily with 100’s or 1000’s of indirect channels with whom they have only the most basic of relationships and about which they have little or no knowledge? The tendencies are either to deluge indirect channels with daily generic email blasts, newsletters, announcements and direct mail in the vain hope that a handful might find them of some interest or value or else do nothing and maintain “radio silence”. Not surprisingly neither of these approaches ensures optimal indirect channel performance. In this whitepaper, we will examine methods for improving your chances of turning indirect channel communications into sales. Communication Strategy In most companies, the CMO is a member of the main board or executive management team. The incumbent presides over and oversees the execution of the company’s marketing strategy. Curiously, even in companies who sell entirely through indirect channels, the individual responsible for the somewhat more complex task of marketing to, through and with the indirect channel does not enjoy such a senior position in the company. Very often, they do not even reside within the marketing organization at all. This is unfortunate because it leads to a number of issues that I have come across time and time again: • Channel marketing is disenfranchised from corporate marketing • Channel marketing is seen as a tactical activity and an extension of channel sales and product marketing • Channel marketing staff are often not party to nor are they made aware of strategic marketing planning • Channel marketing fails to communicate important and useful information adequately or early enough to the channel to allow them to act upon it • The channel fails to market collaboratively with companies - on message and on time Effective communication can be challenging enough between two people who know each other well, but what of the difficulties faced by countless companies who must communicate daily with 100’s or 1000’s of indirect channels with whom they have only the most basic of relationships?
  • 75. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 75 of 113 • Companies consequently fail to leverage their channel indirect channel’s marketing resources and budgets effectively • Since indirect channels fulfill the demand generated by company campaigns, the company fails to maximize ROI on marketing spend The publication of this eBook is unlikely to address the lack of organizational development evident within most companies. However, recognizing the problem and taking steps to minimize its impact would be good first steps. Channel marketers should adopt the same approach to indirect channel communication as their corporate brethren take to corporate marketing communications to customers, they should develop a strategy, take a proactive rather than reactive stance and adopt an approach most likely to maximize the effectiveness of their indirect channel communication activities: • Objective - What do you want to achieve through this or any indirect channel communication? • Selection and segmentation of receivers - Who do you want to target and why? • Medium - What is the best means of delivering your message • Message - What is the message? • Syntax - What do you want to say? • Semantics - How will you say it and how do you want it to be interpreted? • Call to action - What do you want the receiver to do next? • Response - What response do you want to solicit and how will it be made? • Repetition and frequency - Will you repeat the message and if so when and how often?
  • 76. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 76 of 113 Communication Objectives While you can communicate with your indirect channels too infrequently, the opposite is certainly also the case. As with all forms of communication, if you have nothing worthwhile to say, don’t say anything. Indirect channel communications must have a purpose each and every time. They must inform, educate or form a proposition of some sort. You must stop and think: • Why are we communicating? • What are we trying to achieve: o Quantitatively? o Qualitatively? Selection and Segmentation of Receivers Your message must be relevant and interesting to your receiver. Therefore prior to creating the message, it is essential to determine who your audience will be and consider adapting your communication according to your audience: • Restrict your audience to only those receivers for whom the specific message is relevant • Adapt the medium of the message so that it is relevant • Adapt the syntax and / or the semantics of the message so that it is relevant • Adapt the timing of the message so that it is relevant • Adapt the call to action of the message so that it is relevant This step can often be difficult for companies who lack sufficient personal profile data on the individuals in their channel. It is common to hear of companies sending indirect channel communications to the indirect channel principle or to the sales@ or info@ email address. All of these are of negligible value and send out a poor impression of your level of indirect channel intimacy. Quite simply, if you do not have a detailed, up to date indirect channel database with multiple contacts in all disciplines for each of your indirect channels, your communication strategy will at best deliver sub-optimal results. Prior to creating the message, it is essential to determine who your audience will be and consider adapting your communication according to your audience.
  • 77. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 77 of 113 Medium eMail eMail has become the default communication method in business replacing the direct mail piece of the past, However, while volumes continue to increase, figures showed that in 2011, email user numbers declined for the first time and this trend seems set to continue. Social communication and instant messaging is now displacing and will continue to displace email at an accelerating rate in my view and I will discuss these mediums later. In the meantime, email is still a key medium though making it an effective one is increasingly difficult. To make it work properly for you, you need to: • Ensure that you have accurate, up to date email addresses for individuals in your indirect channel community • Ensure that you have their permission to send mail to their private email address (business addresses are generally exempt from DPA restrictions) • Ensure that you have a means to dispatch sometimes large numbers of emails at onetime • Have a repeatable process for communication creation that avoids duplication of effort • Offer a means for the recipient to unsubscribe • Make the title sufficiently compelling to ensure the mail is opened • Keep the content short and present it in such a way as to make it look and sound interesting • Have a means of tracking the communication: o Who did it go to? o Who received it? o From whom did you receive a “bounce-back” and why? o Who opened and read it? o Who responded to your call to action? • Ensure your communications are not mistaken for spam It is often worthwhile targeting selected sub-audiences with complementary communications using other mediums such as telephone, social communication where a more personal touch is required or where the message needs to be reinforced. Social communication and instant messaging is now displacing and will continue to displace email at an accelerating rate.
  • 78. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 78 of 113 Portals Portals should be seen as the final destination and the medium for hosting the message in its entirety. All other mediums should be used to direct traffic to your portal. This is important for two reasons: • Your communication should be brief and to the point directing the indirect channel through a call to action to visit your portal do take the next step: o Read o Learn o Sign-Up o Download etc. • Your portal contains so much more information of value to the indirect channel. Use their visit resulting from your communication to retain them on the site a little while longer to enable you to impart more information. I will go into significantly more detail later on the topic of portals and their importance in providing service and support to your channel together with advice on constructing them and deploying them successfully. Social Communication We examined the statistical data supporting the argument that social networks and social communications are displacing email in chapter 1. Social communication is inherently many-to-many and collaborative and it requires recipients to have opted in to receive your messages. There’s a lot of evidence to show that it is more often read and more often acted upon than email. Portals should be seen as the final destination and the medium for hosting the message in its entirety.
  • 79. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 79 of 113 Company Pages Obviously, email starts with the premise of messaging large numbers of people and attempting to solicit interest in specific communications based upon relevance of content. If the recipient merely decides not to unsubscribe from your communications, this does not necessarily make them a fan! If you plan to use social networks to communicate, you need to adopt an entirely different strategy. Remember, your aim is to encourage people to engage with you and in so doing to expose them to your messages. For this to happen, they need to become a “follower”. In order to make them follow you, they have to know that you are there to be followed so you will have to resort to some old fashioned and contemporary techniques to do this: • Announce via email that your company has a social presence and tell them why they should follow you there and what you’ll be posting. Make it enticing • Encourage or mandate employees to add links to your company pages in their email signature alerting people they interact with outside the company that your company has a presence on social networks • Use your existing social networks to announce that your company is there and encourage them to share and like you • Add social page links to your website and portals with clickable icons that makes it easy to follow you • Add social page links to printed collateral • Add social page links to your mobile app(s) Advertising Some social networks including Facebook and LinkedIn offer paid advertising to promote your company or channel page and attract likes and followers. You will need to be careful to make the targeting as precise as possible in order to attract the right audience but remember that once your page is out there, anyone can see it. Be prepared, your fan-base may become quite diverse! Collaborative Discussions Some social networks like LinkedIn allow users to create communities or groups within the network. You may then invite your target audience to join or they may join of their own volition. Forming and managing these groups enables you to stimulate collaborative discussions between members of your ecosystem while moderating membership and content. Their disadvantage is that they take place in the social network rather than in your own environment and limit your opportunities for self-promotion. Sadly, they’re also open to hijacking by individuals more intent on promoting themselves. External social collaboration solutions like Relayware allow the creation of social groups but restrict the audience to those within your ecosystem and /or those actively participating in your programs.
  • 80. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 80 of 113 Some external social collaboration solutions like Relayware allow the creation of social groups in a similar way but restrict the audience to those within your ecosystem and /or those actively participating in your programs. This makes for tighter, more cohesive groups and discussions on a narrower set of topics while allowing more depth in those discussions. The groups can be more numerous, specialized and better tailored to your ecosystem members. Direct Social Communication When registering your contacts or facilitating self-profiling, it is good practice to capture their personal and company social ID’s. If you have an external social collaboration and communication solution, this brings benefits for them: • Enables them to login to your portals or other online or mobile tools using a single- sign-on using with their social ID’s • Saves them time and the need to memorize multiple ID’s and passwords • Enables them to sync their social profiles with your database again saving time and effort In turn it also brings benefits for you: • Makes registering quicker and easier so increases registrations and reduces abandonment rate • Improves profile data accuracy and completeness • Enables you to view social profiles for both company and individuals in your external social collaboration and communication system • Provides you with social contact data to facilitate direct social communications This is a key last point because if you have the necessary social communications tools, you will be able to send personalized social messages direct to the individual. It also means that the individual’s interactions with you, your program and with others in the ecosystem can be shared through automated social updates with the individual’s social networks. Finally, messages can be re-communicated through the individual’s social accounts into their social networks making them the medium itself. Instant Messaging SMS blasts became popular briefly a few years ago but since they were broadcast rather than targeted, and have more recently been used for often malicious spam marketing they have declined in popularity. Targeted instant social messaging is becoming a more common medium particularly when communicating with sales people and where immediacy is important. When this is combined with other mediums and tied into an activity-stream interface on your portal and/or mobile app, it can be an excellent means of Targeted instant social messaging is becoming a more common medium particularly when communicating with sales people and where immediacy is important.
  • 81. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 81 of 113 delivering targeted, timely information in such a way to attract the prompt attention of the recipient. Consider that portals often contain a great deal of static and often dated content that does not solicit frequent visits but when an activity stream (recognizable to anyone familiar with Facebook’s Timeline or LinkedIn’s homepage updates) is added, the site is brought immediately to life. When such tools (available with external social collaboration and communication solutions) are combined with a mobile app and mobile push-data technology, notifications provide the recipient with a compelling reason to read your latest messages. Combining Mediums Any effective marketing campaign combines mediums so none of the above should be considered in isolation. Through combination, you can reach your audience whatever the medium they prefer and wherever they may be when the message is sent. The Importance of Data It should be remembered that all mediums rely upon good contact information whether that be telephone numbers, email addresses or social ID’s. I will stress again that this is the biggest single source of failure. If your database is inadequate or out of date, you will fail to communicate effectively. Message Whatever the medium, the message consists of three basic elements: • Syntax - What you say • Semantics - How you say it and how you want it to be interpreted • Call to action - What you want the receiver to do next Syntax and Semantics I will not attempt to use this eBook as a means of providing instruction on the use of the English language but rather to look at practical ways of effectively targeting the message at different audiences of receivers and of adapting the message itself to be more effective at maximizing your chances of maximizing call to action response. The best way to do this is with an example with which we will also look at some other considerations relating to the message not covered elsewhere. If you intended to communicate the launch of a new product for example, you could adopt any one or all of If your database is inadequate or out of date, you will fail to communicate effectively.
  • 82. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 82 of 113 the following approaches to receiver selection and segmentation and message adaptation for the communication: • Restrict the audience to only those contacts within companies authorized to sell the product • Send the message out to field-based indirect channel staff. e.g. sales via IM, mail and mobile to maximize the impact and immediacy Then in consideration of the message itself: 1. Adapt the syntax of the message so that the message is relevant and interesting to: a. Sales people - features, functions, benefits and incentives etc. b. Marketing people - media plan, availability of collateral, MDF accruals etc. c. Pre-sales - competitive benchmarking, whitepapers technical information etc. d. Technical Support - Technical schematics, warranty policy, spare parts availability etc. e. Operations and purchasing - Pricing, part codes, options and accessories, availability etc. 2. Adapt the semantics of the message: f. Why should you sell this? g. How should you market this? h. Why should you recommend this to your customer? i. How can you service and support this? j. How can you buy and stock this? How does timing impact on this? Could you adapt the timing of the communication to maximize its effect? • Operations and purchasing may need to know first so the part codes and pricing can be set up on their ERP system • Technical and pre-sales may need to know next so that they can undergo training • Marketing may be next as they will need to plan media schedules and order collateral etc. Medium is important also: • Emails should be kept brief, contain key information only and link to portals, social pages, blogs, articles or other online mediums for more information • LinkedIn updates and Facebook posts should also be brief and link to portals, social pages, blogs, articles or other online mediums for more information. These should contain a relevant image as this will be used by the social site to display alongside the message to add interest Whatever the medium, the message consists of three basic elements: syntax, semantics and call to action.
  • 83. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 83 of 113 • Don’t just copy and paste content from one social update to another. Dull, business-like messages work on LinkedIn but they won’t win you fans on Facebook – make it fun! • Remember Twitter’s character limit if you want to avoid truncation Call to Action Each and every communication must have a call to action. If the recipient must do no more than read a message the chances of them retaining it and acting on it are small. If they must do something - make a conscious effort to take an action in order to: • Access more information • Download a document • Sign up for an incentive • Order collateral • Order inventory • Enrol for a training course • Participate in a social activity Or indeed in any way participate or interact with you they will remember the experience, it will have an impact and the chances of them following through with the desired behavior are much enhanced. There is some parallel to be drawn here with the psychology of the “freebie”. If something is free or if obtaining it requires no effort and / or no investment then it is perceived value is low. By contrast, (and of course there is a fine line that you need to tread) if something requires effort or investment to obtain then it must have a greater value. In summary, always have a call to action whatever it may be because a communication without one may well be forgotten in less time than it took to read it. Response When you deliver call to action, then you must also have in mind a desired response both in terms of: • Action - What do you want the receiver to do: • Immediately? • In future? • Medium - How do you want them to respond? Always have a call to action whatever it may be because a communication without one may well be forgotten in less time than it took to read it.
  • 84. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 84 of 113 By implication, if you are going to communicate and any communication must have a call to action then you must plan for the response and consider how you will: • Receive it • Monitor it • Report upon it • Act upon it In practice, this ultimately means content creation within your portal because that will be the ultimate destination of your audience if you get it right. It means making sure that the information or functionality exists within your portal to easily satisfy the call to action, to act upon it and to capture the interaction resulting from it. Repetition and Frequency Whether you send out weekly updates, monthly newsletters or quarterly bulletins, consider carefully how often your indirect channels want to hear from you. It is important that you consider how many companies are contacting them daily, through what mediums and how many different communications they are likely to receive and want to receive. Consider conducting research amongst your ecosystem before deciding for yourself. The results may differ substantially! We think that communicating more than once per week by email is dangerous because it increases the likelihood substantially of your messages being: • Ignored • Read selectively • Categorized as “Junk Mail” and never read again Send email sparingly and ensure that what you have to say is worth saying and interesting to your audience. However, if you issue an important message to your indirect channels, it is worth repeating it selectively to those who failed to respond to your call to action the first time. This “second bite of the cherry” can often produce more results than your first provided that you change the tone of the message to incorporate a more personal, appealing or even pleading tone. Other mediums can be used more frequently mainly because the audience will have opted in to receive your messages. Whether you send out weekly updates, monthly newsletters or quarterly bulletins, consider carefully how often your indirect channels want to hear from you.
  • 85. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 85 of 113 Chapter 10: Service & Support In this chapter we consider the best approaches for providing a service and support offering to your channel indirect channels for which the investment required is proportionate to the return yet the quality of offering is consistently high regardless of indirect channel status. Channel Segmentation Versus Quality of Service In an ideal world, indirect channel service and support should be provided in the spirit of European social welfare services - available to all, provided to a consistent standard and free at the point of use. In practice, things rarely work out this way. In a previous chapter, we looked at indirect channel selection and segmentation approaches leading to the development of accreditation hierarchies. These same hierarchies are commonly used to determine the nature and often the quality of service and support offered: Segmentation Hierarchies and their Consequences As we already discussed, this approach simply exacerbates the pareto effect - 80% or more of a company’s business derived from 20% or less of the indirect channel base. This appears to make perfect sense - higher tiered indirect channels get the best levels of service and support and the greatest investment. Lower tiered indirect channels receive the poorest service and the least investment. One could argue that this is only fair. However the model makes a key and often flawed assumption; that indirect channels generating low levels of sales today lack potential for growth. Making the same assumption about customers would be unthinkable! However, nurturing lower tiered indirect channels to encourage growth can be a difficult and time consuming task. It is for this reason that many companies simply don’t bother to try. But in difficult business and economic climates such as those we currently face, failure to exploit all of the sales and marketing resources and opportunities available to you is quite simply inexcusable. Our advice would be to invest in: Nurturing lower tiered indirect channels to encourage growth can be a difficult and time- consuming task; that’s why many companies simply don’t bother or try.
  • 86. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 86 of 113 • Profiling your lower tiers by applying balanced score-carding methodologies • Building a comprehensive database of your entire ecosystem • Segmenting your indirect channels based upon qualitative as well as quantitative metrics • Targeting those indirect channels with high growth potential • Offering a consistently high quality of service and support to all regardless of tier Delivering High Quality Yet Cost-Effective Service and Support So-called “managed” accounts will always receive some form of direct (human) support. What I will not attempt to do here is to discuss human indirect channel management best practice as this is a topic best addressed by sales force development companies. Instead, let’s take a look at some of the means of supporting both managed and “unmanaged” accounts while removing the stigma of the “disdained” and elevating their profile and contribution. When it comes to managing what is numerically at least the largest portion of your ecosystem, there really is only one cost effective solution – full automation. All of the information, tools and resources you offer have to be made easily and conveniently available to your indirect channel online via portals and mobile apps. Relayware have built and deployed some of the industry’s best and most successful “partner” portals and mobile apps. We don’t write content - our customers are the best at doing that - but we do advise them on best practice in portal design and functionality to offer the best possible online service and support. We also develop and market mobile apps that match them feature for feature. Here are some tips that our customers have found useful. Purposeful Portals Registration Registration for portal or program access needs to be quick and easy. You should facilitate social network integration to support a single sign on capability and profile sharing. Data capture should be phased to ensure that only critical information is gathered during the initial registration process as this reduces abandonment rate (when your registrant gives up part way through due to lack of time or motivation). Keep them informed about how lengthy this process will be and how far through it they are by breaking it up into short steps with an on- screen reminder of how far they are at any time. More information can be captured as part of the social profile exchange or else in the course of your on-boarding process. When it comes to managing what is numerically at least the largest portion of your ecosystem, there really is only one cost effective solution – full automation.
  • 87. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 87 of 113 Automate the approvals process by using your collaboration and communication system. Ensure timely responses to the applicant and keep them updated throughout. Self-Profiling In order to maintain data quality in your database and improve the targeting and quality of your communication, offer indirect channels access and editing rights to their profile data so that they can maintain themselves. Make this easily accessible to them from the homepage or as part of the navigation. Allow them to sync their social profiles with their profile in your database as this saves them time and makes for a more accurate and better- maintained profile for you. It also means that you capture their social ID’s for use later. On-Boarding As I discussed earlier in this book, on-boarding (similar to lead nurturing) is a critical step in the development of your relationship. It is a process in which you will engage in a series of time, event and interaction-triggered communications with recent registrants to share with them the information they need and expose them to the tools and resources available to them and to help them to make best use of them all as their knowledge and capabilities increase. Your portal needs to have the capability to present content and experiences to them as they progress through your on-boarding process and to do so intelligently and intuitively. For example, a simple on-boarding process might be keyed to portal visits: 15. Registration 16. Follow up welcome email with login credentials 17. Email advising them of your social network pages 18. Social messages to “new starters” directed to welcome videos on the portal or YouTube 19. Email inviting them to download your mobile app with a link to your portal or the app stores 20. Instant messages directing them to your product key features videos on the portal or mobile app 21. Combination of communications using multiple mediums encouraging signing up for your rewards program 22. Rewards program promotion of your training program offering bonus rewards points On-boarding processes can be as simple as this or far more complex based upon combinations of responses depending upon whether your system can manage such complexity. Your portal needs to have the capability to present content and experiences to your ecosystem as they progress through your on- boarding process and to do so intelligently and intuitively.
  • 88. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 88 of 113 Networking As we explored in earlier chapters, every ecosystem has interdependencies. Modern indirect channel ecosystems often have a need to locate and interact with other members of the ecosystem. You can provide an invaluable service by sharing your data and providing search and location tools to enable individuals to find other channel partners by location, capabilities, skills, expertise, market focus etc. and then connect or “network” using your portal as a communication medium. Activity Streams There is no better way of keeping your portal content fresh than incorporating a live activity stream in your homepage. Fresher content results in more frequent visits which are of course one of your key objectives for any website. Your external collaboration and communication solution should enable you to push any form of communication including: • Emails • Social communications • Instant messages • Social updates • Time- and event-triggered communications • Alerts Content should be filtered according to the profile of the visitor and the visitor should be able to view the entire communication, share, like and follow both author and topic. Collaborative Conversations Some companies have tried to facilitate interaction between the members of their ecosystems using portal-based forum tools. In practice, moderated forums just aren’t terribly interesting to the members of your ecosystem. But as LinkedIn has proven, private or public discussion groups are very popular – there are currently around 1.5 million of them on LinkedIn! Create your own groups and allow your ecosystem members to create their own on your portal. Allow them free-reign to engage in collaborative discussions and above all listen and learn from the social interaction you are facilitating. Record the interactions in your contact history and use the data to drive your own collaborative engagement. Online Learning and Certification Face to face sales and marketing training is typically not practicable or cost effective these days especially for unmanaged accounts but in its wake has been left a void. Some Content should be filtered according to the profile of the visitor and the visitor should be able to view the entire communication, share, like and follow both author and topic.
  • 89. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 89 of 113 companies have made attempts to stretch legacy internal learning management systems to support online indirect channel training but this presents a number of problems not least the creation of yet another portal for indirect channels to use and one more database to keep up to date. Leading indirect channel portals integrate e-learning with online testing and certification management to deliver a full range of indirect channel training programs including technical and pre-sales and manage the entire process from content management through delivery and the management of complex accreditation mapping and scoring. This ensures that indirect channels need only log in to one portal and all of their information is maintained up to date within the same database. Collaborative Business Planning Conventional business plans are prepared once a year for your managed accounts by your account managers in order to achieve their performance objectives. Once prepared, they are rarely used in my experience. You can make the formulation of these plans a truly collaborative exercise by preparing them using your external collaboration and communication solution using templates. Your channel contacts can then review, collaborate and update their own plans online via the portal and since you are working with data rather than mere text files, you can use that data to measure performance dynamically as the year progresses. Lead Management Coupling your marketing, lead generation and sales activities with automated lead distribution via the portal streamlines the process and delivers leads directly to the channel sales people best placed to close them. Additionally, if you provide a means for indirect channels to update lead status themselves online, they can keep you up to date and let you know when sales are worn or lost. This also ensures that you can monitor performance and ensure that closers receive more leads. Deal Registration Essentially, lead management in reverse, deal registration capabilities allows indirect channels to register their own sales leads via your portal in exchange for some benefit or reward. If their leads can be seamlessly deposited into your integrated sales pipeline and managed online is exactly the same way as your own leads, the process is streamlined, kept constantly up to date and indirect channels can be rewarded for deals upon closure. Deal registration also helps avoid channel conflict. If you provide a means for indirect channels to update lead status themselves online, they can keep you up to date and let you know when sales are won or lost.
  • 90. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 90 of 113 Renewals A renewal (e.g. policies, licenses or subscriptions) is essentially a time-triggered sales opportunity already associated with an incumbent channel organization. You have this information so you need to share it. Your channel is unlikely to keep tabs on renewal dates but it is in your interests to do so. Ensure that your indirect channel receive timely advance warnings of renewal dates and you will see an impressive rise in your renewal rates as well and channel and customer satisfaction. Locators Link your corporate website to your collaboration and communication system’s database to provide an intuitive indirect channel locator function that enables customers to match their needs to the most appropriate indirect channel. Complete the loop by notifying the relevant indirect channel immediately by delivering a lead with the customer’s information to ensure that the opportunity is followed through. These “soft” leads are often less well qualified but much appreciated by indirect channels. Special Bid Support Another process renowned for being at times painfully slow, bureaucratic and inefficient is the process of managing special pricing or bid support. Leading portals automate this process by managing product catalogues and pricing, bid requests, hierarchical approvals and imposing rules and controls. This once again enables indirect channels to use the portal as a one-stop-shop and enjoy a much more convenient, efficient and speedy experience in supporting you in business development. Marketing Tools and Management of Marketing Funding Many portals offer indirect channels the opportunity to download marketing materials, brochures and presentations and a number of software or services companies have in recent years offered plug-ins to facilitate online customized or co-branded marketing material creation. Best practice indirect channel portals integrate all of these capabilities but additionally they facilitate full marketing collaboration between company and indirect channel. This can include the facility to accrue and manage MDF accounts, claim funds and make redemptions against approved marketing campaigns all enabled by integration with the indirect channel database and other enterprise systems at the back end. Events You will want to invite your indirect channel to many events. Most will typically be online these days but conferences, seminars and training events do still take place locally so the Link your corporate website to your collaboration and communication system’s database to provide an intuitive indirect channel locator function that enables customers to match their needs to the most appropriate indirect channel.
  • 91. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 91 of 113 means to invite attendance and facilitate online registration and profiling via your portal is essential. Of course webinar tools like Webex and GoToMeeting can support registration processes of their own but their weakness is that the registration is not captured in your contact history in either CRM or in your external collaboration system. Directing registrations first through your portal ensures that you can capture attendee data and then use this information for subsequent audience segmentation in marketing. You can also use it to populate portal-based calendars if you have them. Incentive and Loyalty Programs Loyalty programs and incentive campaigns are another program component often outsourced to third parties by companies. Again, this results in multiple portals or websites, manual processes, inconsistent data and poor indirect channel satisfaction. Additionally the old-fashioned “points-mean-prizes” incentives just don’t work - rewarding as they so often do, sales that would have been made anyway by people already actively selling. High performance indirect channel portals support company and individual incentive and loyalty programs as an integral component and because they share data with the full range of collaborative sales, marketing, learning and support apps, they can support gameification which is, as I discussed earlier, the latest, most cost effective and arguably the most effective form of holistic incentivization for your ecosystem. Gameification works by providing small and often token rewards for good behavior – reading a message, clicking on a link, watching a video, downloading a document or taking a training course. A reward might be nothing more than a social update, a label or an “expert” avatar for a social persona but in the era of instant gratification, these often count for more than a TV or iPad earned from 12 months of selling.
  • 92. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 92 of 113 Performance Monitoring and Management You need to monitor the performance of your indirect channel at a macro level to ensure that they are helping you achieve your goals. Similarly, they may be very interested to know how they are performing at both an individual and a company level. If you have the data, share it. Placing performance dashboards on your portal that display data relating to the visitor in an attractive and easy-to-interpret way (preferably chart-based) is an excellent way of engaging them in monitoring their own performance against targets set – either formally in joint business plans or informally against their peer-group. Persuasion Elements As with any website, it is crucial to improve stickiness and the desire to explore the portal and make use of its functionalities. This is best achieved by using persuasion elements and calls to action on every page. These CTA’s should be user and context- sensitive to ensure that you maximize the chances of triggering a favorable response. Social Features As with any website, it is important to make every page and all content available to like, share, rate and comment upon. Care must be taken to extend these features only to pages and content that are unrestricted. However, since unauthorized viewers should be taken (via hyperlink) through the login / registration screens, social sharing can act as an effective viral recruitment tool. User Specific Content Indirect channels will be drawn to the portal and spend more time visiting it if they sense that the content is tailored to their specific interests or needs. Ensure that your content management system or external collaboration and communication solution can present content based upon visitor profiles and that profiles are fully populated with personal content preferences. Gameification works by providing small and often token rewards for good behavior – reading a message, clicking on a link, watching a video, downloading a document or taking a training course.
  • 93. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 93 of 113 Mobile Apps As much as possible, you should look to replicate all of the functionality you offer on your portal if not all of the content. Mobile apps are tools and are useful in completing tasks requiring minimal data entry and searching for information as opposed to acting as vast repositories for that information. For this reason, having a mobile app that runs on the same platform as your indirect channel database, collaboration apps and portal is a must. We will now consider each of the portal functionalities and without repetition of the preceding portal section, how these should be adapted to function on smartphones and tablets. Mobile Registration Some of the mobile app stores (most notably the Apple App Store) do not allow in-app registration. This is best done via the portal or by linking out to portal registration pages optimized for a mobile browser. Again, considering the limitations of the device, keep the process short. Mobile Self-Profiling Mobile devices don’t lend themselves to intensive data entry and mistakes are easily made so take advantage of social network profile syncing and portal-based self-profiling. Mobile On-Boarding Notifications are supported by most mobile OS’s are excellent ways to draw attention to an update or call to action and work extremely well for onboarding processes using a mobile device. The app itself makes an excellent delivery mechanism for streaming multi-media content which is again ideal for this purpose. Mobile Networking This functionality should ideally be replicated from the portal to the mobile platform and offers the added value of location-based services on the device. Mobile apps are useful in completing tasks requiring minimal data entry and searching for information as opposed to acting as vast repositories for that information.
  • 94. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 94 of 113 Mobile Activity Streams Mobile devices are perfectly and arguably best suited to this form of communication tool. The display of topic and headline only allows for more messages per screen with the option to view the full message on a separate screen or link out to a mobile browser. The app can also make great use of notifications supported by the OS to draw attention to new messages. Mobile Collaborative Conversations This functionality should ideally be replicated from the portal to the mobile platform though it works best on the larger screen of the tablet. Mobile Learning and Certification Mobile devices make excellent platforms for viewing on-demand streaming multimedia training material. The key is to ensure that content is matched to and accessible based upon the users profile and that it is easily searched, indexed, bookmarked and rated. Mobile Collaborative Business Planning This feature is best suited to the portal because it requires intensive data entry. Mobile Lead Management, Deal Registration, Renewals and Bid Support Sales automation of this kind is perfectly suited to a mobile platform and offers the immediacy that a sales rep is looking for – avoiding the need to return back to base and log into a portal they can manage their sales pipeline dynamically and collaboratively while on the move. Care should be taken to ensure that data entry is minimized as before and that where more data is required, this can be completed on the portal at a later time. Mobile Marketing Tools and Management of Marketing Funding Access to marketing tools and marketing programs is not in my experience necessary on a mobile device; these being predominantly office-based tasks and in the case of the latter, data entry-intensive. However, access to multi-media files including brochures, data sheets, technical specifications, images, schematics and video footage can be very useful if easily searched, indexed, viewed in-app, bookmarked and rated. Mobile devices make excellent platforms for viewing on- demand streaming multimedia training material.
  • 95. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 95 of 113 Mobile Events This functionality should ideally be replicated from the portal to the mobile platform and offers the added value of location-based services on the device. Mobile Incentive and Loyalty Programs The mobile device provides a perfect platform for incentive participation. In addition to engaging in task-based games, unlocking and viewing multi-media content, delivering IR code tokens and vouchers, the device’s inbuilt camera provides an excellent means for capturing images, scanning documents and recording transactions all of which can be instantly transmitted and stored in your external collaboration and communication solution’s database. Imagine the potential for point-of-sale incentives for retail channels where receipts can be “scanned” and recorded at the checkout as proof of sale to verify transactions and customers and so to avoid the necessity for manual verification. Mobile Performance Monitoring and Management Armed with notifications, activity streams and the ability to display dynamic reports and dashboards, the mobile app provides an excellent means of keeping your channel aware of their performance in real time. Mobile Social Features As with your portal, it is important to make all content available to like, share, rate and comment upon. Care must again be taken to extend these features only to content that is unrestricted. But again, since unauthorized viewers should be taken (via hyperlink) through the login / registration screens, social sharing can act as an effective viral recruitment tool. Mobile User Specific Content Indirect channels will be more likely to use your app if they sense that the content is tailored to their specific interests or needs. So as with portal content, ensure that your external collaboration and communication solution can present content based upon visitor profiles and that profiles are fully populated with personal content preferences. Armed with notifications, activity streams and the ability to display dynamic reports and dashboards, the mobile app provides an excellent means of keeping your channel aware of their performance in real time.
  • 96. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 96 of 113 Chapter 11: Performance Management and Optimization Introduction Several times during this eBook, we have drawn comparisons between the business practices adopted by companies for the management of their direct sales and marketing operations and resources and those of their indirect or “channel” operations and resources. Consistently, such practices are more rigorous for the former than the latter and not surprisingly they are typically far more effective in achieving business goals. In the final chapter, we combine the last two steps in effective indirect channel lifecycle management – managing and optimizing indirect channel performance. These are two areas in which we have seen little evidence of companies applying performance management best practice to their indirect channel networks even when they adopt such practices in the management of their own business and people. We have also noted that when companies are faced with poor indirect channel performance, their response is often to resort to tactical incentivization or the recruitment of more indirect channels. We will examine the reasons behind this behavior and explore alternative and more effective approaches. Definition Just as with performance management in a corporate sense, indirect channel performance management should be: • Strategic - it is about broader issues and longer-term goals • Integrated - it should link various aspects of the business, people management, and individuals and teams It should incorporate: • Performance improvement - throughout the indirect channel network, for individual, organizational, segment or tier effectiveness • Development - unless there is continuous development of individuals and indirect channel organizations, indirect channel performance will not improve • Managing behavior - ensuring that individuals and their organizations are encouraged to behave in a way that allows and fosters better working relationships between company, indirect channel and customer Indirect channel performance management is a process driven by the company which contributes to the effective management of indirect channel networks, indirect channels and individuals in order to achieve high levels of performance.
  • 97. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 97 of 113 Indirect channel performance management is a tool to ensure that company channel managers manage their indirect channel network effectively; that they ensure the indirect channels they manage: 23. Know and understand what is expected of them 24. Have the skills and ability to deliver on these expectations 25. Are supported by the company to develop the capacity to meet these expectations 26. Are given feedback on their performance 27. Have the opportunity to discuss and contribute to collective aims and objectives It is also about ensuring that managers themselves are aware of the impact of their own behavior and the behavior of their indirect channel-facing representatives on the indirect channels they manage and are encouraged to identify and exhibit positive behaviors. Setting Performance Targets It is human nature to establish goals for ourselves and others that either cannot easily be measured and hence performance is impossible to measure or else establish simplistic goals based upon metrics that are easy to measure and yet which may not provide an objective measure of performance. Many companies measure indirect channel performance based upon little more than revenue precisely because this can be relatively easily determined from sales-out data sourced from their own systems or those of their distributors and as we have seen from earlier steps in this series, revenue is only one measure. In setting targets for your indirect channels you must compromise and establish targets in the same way as you would set them for yourself or your people: • Specific - related to shared objectives • Measurable - input - output - outcome • Achievable - but also stretch the indirect channel organization • Realistic - able to reach the target • Timely and Timescaled - by when the target is to be achieved In practice this means that targets must be based upon metrics that: • Are important and have commercial impact for both parties • Can be measured using information and systems available to you • Have some historical pretext or are based on mutually agreed achievable projections • You both believe can be met • Are aligned with your own fiscal timetable – FQ and / or FY Performance measurement is the process of assessing progress toward achieving predetermined goals.
  • 98. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 98 of 113 The key is measurability. We will discuss effective ways of objective performance management later. Documentation and commitment is critical. A business plan for channel business drawn up by a company in isolation and without the collaboration of the indirect channels is worthless. A plan drawn up in collaboration with an indirect channel but to which they are not committed or which offers no tangible commercial risk / reward for both parties is also worthless. Indirect channel business plans must feature the following: • Goals - quantitative, qualitative and mutual • Strategy - clear plan of how the goals will be achieved • Objectives - the specific initiatives to be undertaken • Action Plans - assigned to people and with clear deadlines • Timescales - timeframe for implementation and target deadlines • Resource Plan - what resources will be required from both parties • Investment Plan -what joint investment will be made • Signatures - by directors from company and indirect channel Anything less than this does not count as a joint business plan. If a company cannot or will not invest the time and effort to develop these plans with at least that portion of the indirect channel network that generates 80% of the revenue, then any resulting revenue forecasts can be little more than wishful thinking. Performance Measurement Performance management is closely connected to Performance Measurement. They are sometimes mistaken for each other. In careful usage, Performance Management is the larger domain and includes Performance Measurement as a component. Performance Measurement is the process of assessing progress toward achieving predetermined goals. Performance Management is building on that process, adding the relevant communication and action on the progress achieved against these predetermined goals. To improve performance, you need to know what current performance is. Measurement provides the basis for providing and generating feedback, and therefore can build the platform for further success or identify where things are going less well so that corrective action can be taken. But what gets measured? Measure the wrong things, perhaps simply because they are easy to measure, and an entire performance management system can fall into disrepute. Use too many measures and you can’t see the wood for the trees. For measuring performance, the achievement of objectives, levels of competency, standards of Measurement provides the basis for providing and generating feedback, and thus can build the platform for further success or identify where things are going less well so that corrective action can be taken.
  • 99. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 99 of 113 performance and fiscal outputs are used but the emphasis varies according to indirect channel type. Historically, most companies have applied performance measures to indirect channels that are easy to measure – sales revenue, compliance with accreditation criteria etc. Increasingly, however, leading companies are using more sophisticated measuring techniques such as balanced scorecards or ROI (return on investment) analyses. But whilst many companies now use balanced scorecards for managing personnel and operation performance, few have adopted it for indirect channel performance management. Balanced Scorecarding In 1992, Robert S. Kaplan and David Norton introduced the balanced scorecard (BSC), a concept for measuring a company’s activities in terms of its vision and strategies. It gives managers a comprehensive view of the performance of a business. It is a strategic management system that forces managers to focus on the important performance metrics that drive success. It balances a financial perspective with customer, internal process, and learning and growth perspectives. The scorecard seeks to measure a business from the following perspectives: • Financial perspective - measures reflecting financial performance • Customer perspective - measures having a direct impact on customers • Business process perspective - measures reflecting the performance of key business processes • Learning and growth perspective – measures describing the company’s learning The specific measures within each of the perspectives are typically chosen to reflect the drivers of the particular business. This method, whilst suitable and very effective at providing a comprehensive view of the performance of one’s own business must be adapted in order to measure the performance of an indirect channel.
  • 100. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 100 of 113 Balanced Scorecarding for Indirect Channels In the programs we have developed for our clients, we tend to use the term “Indirect Channel Relationship Assessment” in external communications – Indirect channels don’t like to be “scored”! Purpose of Scorecarding for Indirect Channels Scorecarding forces channel managers to focus on the performance metrics that drive success. In this context, it: • Exposes strengths and weaknesses within the indirect channel at a macro and individual level in all of the key areas • Provides the basis of a relative ranking to compare and contrast performance of one indirect channel versus another and against the best, worst and mean • Establishes a set of performance benchmarks • Highlights specific areas for improvement or development • Provides an objective basis for the allocation of resources and benefits • Drives joint business planning and implementation. In this context, when fully deployed, the balanced scorecard or Indirect Channel Relationship Assessment transforms strategic planning from an academic exercise into the formula for and basis of your channel strategy. Scorecarding forces channel managers to focus on the performance metrics that drive success. The balanced scorecard (BSC), a concept for measuring a company’s activities in terms of its vision and strategies.
  • 101. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 101 of 113 Practical Applications of Indirect Channel Balanced Scorecarding Channel Strategy The basic completed scorecard provides managers with the means to make strategic decisions. For example, with regard to Coverage – does this channel indirect channel provide adequate coverage geographically and in terms of markets, customers and products? If not, can they be encouraged or managed in order to do so or not? If not can alternative or complementary channel indirect channels be found? Joint Business Planning The scorecard also provides an invaluable contribution to joint business planning by highlighting those areas in which investment or development is required in order to achieve mutual business goals. Channel Segmentation Once the channel indirect channel has been assessed in each of the key disciplines (the ‘5 C’s), a total score can be calculated and mapped against the sixth ‘C’ – Contribution in terms of revenue, profit or both. Mapping Scorecard Value Against Contribution Channel organizations who map within the upper right hand quadrant are those who are of greatest strategic importance. They typically account for less than 5% of your total channel base by volume. Those who appear in the bottom right or upper left quadrants should be the focus of targeted investment and development activity driven by joint business plans. Any channel organization that appears in the bottom left hand quadrant should be The scorecard also provides an invaluable contribution to joint business planning by highlighting those areas in which investment or development is required in order to achieve mutual business goals.
  • 102. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 102 of 113 assessed for suitability and or viability. Their presence here usually indicates that they should be replaced and/or alternatives or additions found. Accreditation We covered this topic in an earlier chapter when considering channel segmentation. Accreditation is a means of labelling an indirect channel organization based upon satisfaction of accreditation criteria. It was once seen as a form of company endorsement and some sort of guarantee of technical competence and quality. Channel accreditation schemes have become less and less useful and relevant in recent years as technology has become increasingly commoditized and customers and channels have become increasingly technically competent. They should only be considered when accreditation is considered valuable to the channel, the customer or ideally to both. Where accreditation is considered valuable, the scorecard quadrant mapping in figure 10 can be used to generate a three or four tier hierarchy based upon a balanced scorecard which may be based upon the ‘5 C’s – for a holistic performance-based assessment or upon other criteria, for example technical competency in given areas. Mapping Scorecard Value Against Contribution Channel Program Hierarchy It is increasingly considered good practice to use the accreditation hierarchy approach shown below to create an internal rather than external hierarchical structure. This can then be aligned with the allocation of resources, investment, commercial conditions and program benefits or deliverables. Accreditation is a means of labelling an indirect channel organization based upon their satisfaction of accreditation criteria.
  • 103. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 103 of 113 Converting Scorecard Quadrants into a Segmentation Model Automating Indirect Channel Balanced Scorecarding Some external collaboration and communication solution systems (Relayware included) or PRM systems have integrated scorecarding functionality. Relayware is aligned as standard (though it can be reconfigured to you own design) around the 6 C’s model. Once weightings have been applied, the system will analyze the available data and score each indirect channel accordingly. Data is presented in detailed reports, easy to read charts and dashboards. An external collaboration and communication or a PRM solution makes scorecarding quick and easy and the process can be repeated as frequently as you wish. Analysis is automated and the output presented in a variety of easy-to-read formats to enable you to make rapid and well-substantiated business decisions. Relayware’s auto-scorecarding can be used to drive a range of further processes including pricing, commercial conditions, accreditation, training and strategic business planning. Auto-scorecarding can be used to drive a range of further processes including pricing, commercial conditions, accreditation, training and strategic business planning.
  • 104. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 104 of 113 Alternative Methods of Indirect Channel Balanced Scorecarding It’s important to clearly define your scorecard criteria for each of the 6 C’s and then decide weightings for each. Manual Scorecarding The weightings are crucial because while you may have many criteria not all are equally important. You will need to train your Channel Account Managers via workshops in scorecarding methodology to ensure that the scoring process is applied in as consistent a way as possible. Many of the metrics are qualitative and / or subjective so you will need to try hard to remove personal opinion or prejudice in order to get an objective assessment. When the scorecards are complete, you will be able to chart the results in order to assess the relative strengths and weaknesses of each channel organization in each area. When the scorecards are complete, you will be able to chart the results in order to assess the relative strengths and weaknesses of each channel organization in each area.
  • 105. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 105 of 113 Manual Scorecarding Analysis: Plotting the 5 C’s By plotting the 5C’s against Contribution, you can go on to complete full scorecard mapping in quadrant form as I described earlier. Manual Scorecarding Mapping Results By plotting the 5C’s against Contribution, you can go on to complete full scorecard mapping in quadrant form.
  • 106. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 106 of 113 You can then go on to segment your indirect channels to assist in your decision making processes including collaboration methodology, pricing, commercial conditions, accreditation, training and strategic business planning. Converting Scorecard Quadrants into a Segmentation Model Optimizing and Rewarding Performance Performance optimization can be achieved through a combination of ‘carrot and stick’. In this context that is to say: • Providing indirect channels with the tools, resources and development necessary to improve performance. • Rewarding them for good performance and providing ongoing support to promote further improvement. • Penalizing them for poor performance and, where potential for improvement has been identified, providing ongoing support to promote further improvement. • Penalizing them for poor performance and, where potential for improvement has not been identified, taking positive action to de-commit further resources and investment or terminating the relationship Taking the final punitive measures with consistent poor performers is as important as rewarding and investing in performers. Companies must, after all invest their limited Taking the final punitive measures with consistent poor performers is as important as rewarding and investing in performers. .
  • 107. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 107 of 113 resources where they can deliver the greatest return. But this step should only be taken following an objective analysis ideally through scorecarding. Developing a High Performance Channel Throughout this book, we have already examined in detail the core components of indirect channel collaboration and communication as a strategy and methodology. In brief, engaging in ecosystem social collaboration and multi-channel communication as a strategy addresses every phase of the indirect channel lifecycle: The Indirect channel Lifecycle By implementing a social collaboration strategy for their indirect channel, a company commits to engage in: • Ongoing communication and knowledge sharing with the indirect channel network • Ongoing training and development of individual and organizational skills and competencies • Ongoing motivation, incentivization and loyalty building • Fostering sales, marketing, support and operational collaboration between indirect channel and company and across the wider indirect channel network • Providing an effective and high quality support infrastructure to the indirect channel network • Working collaboratively in planning for and achieving success against joint targets All companies have a fundamental responsibility to develop their channel for the future, not merely to reward it for the past.
  • 108. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 108 of 113 All companies have a fundamental responsibility to develop their channel for the future, not merely to reward it for the past. Rewarding a High Performance Channel Personnel performance management is often linked with performance-related pay (PRP), although by no means all organizations claiming to use performance management have PRP. Nevertheless, PRP is an important element in many performance management schemes because it is believed to motivate; it is said to deliver the message that performance and competence are important, and it is thought to be fair to reward people according to their performance, contribution or competence. A similar approach is often used with indirect channel performance management where performance-related discounts or rebates are made available according to an indirect channels performance against defined targets. Sometimes this is governed by attainment of accreditation criteria but all too often these criteria are too narrow and restricted only to those metrics that can easily be measured. This means that accreditation is usually based on subjective assessments of performance, and that a performance-related discount or rebating policy can often inhibit collaboration because of its individualistic nature, and occasionally lead to ‘short-termism’. An alternative to PRP for personnel is competence-related pay, which provides for pay progression to be linked to levels of competence that people have achieved, using a competence profile or framework. By combining performance-based and competence- based it is possible to operate contribution-related pay scheme which means paying for results plus competence, and for past performance and future success. This is precisely the model supported by indirect channel scorecarding and indeed indirect channel scorecarding offers the only methodology for contribution-based discounts, rebates or rewards for indirect channels. By combining performance- based and competence- based it is possible to operate a contribution- related pay scheme which means paying for results plus competence, and for past performance and future success.
  • 109. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 109 of 113 Summary In the coming months and possibly years, we will all be challenged to maintain and grow revenues, reduce costs and improve profitability while acquiring new customers and maintaining high levels of customer satisfaction; all this while battling the worst economic downturn in living memory. Companies who succeed in this climate and during what will doubtless be a slow recovery period will be those who find efficient and economical ways to gain competitive advantage and leverage it. If your company sells direct, then continue to invest in and develop your CRM, MA and workforce collaboration strategies to drive demand, tightly manage your sales activities and improve internal productivity. However, if you sell through an indirect sales channel or operate a multi-channel go-to-market strategy then consider implementing a complementary external social collaboration and communication strategy to improve the productivity of your demand-side ecosystem and address every phase of the indirect channel lifecycle: Selection Ensure that the indirect channels you have are the ones you need now and in the future to maintain and grow your business. Build a detailed profile on each of the companies to ensure that you have an intimate knowledge of your ecosystem and the sales, marketing and other resources they employ and who represent you in front of your customers. Segmentation and Accreditation Don’t implement accreditation programs for the sake of it. Make sure there is tangible value for everyone and don’t create disaffected 2nd and 3rd class citizens among your indirect channel network. Instead, consider utilizing the knowledge you have amassed to segment your ecosystem into circles and groups with shared attributes to improve targeting, go-to- market execution and communication. Segmentation is critical because it aligns your channels to market with the market’s you want to serve while ensuring more effective and productive communication. Recruitment and On-boarding Embark on a recruitment initiative only after analyzing your existing base to assess their potential. It may be easier to re-activate a dormant account or contact than it will be to attract an entirely new one. Recruit new indirect channels according to your selection criteria and then only in parallel with a balanced score-carding methodology. Recruitment isn’t a numbers game in which you recruit as many people as possible in the hope that some of them
  • 110. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 110 of 113 work out. Recruit indirect channels with the same care and conviction as you would apply if recruiting new staff. Once recruited, nurture them as you would a prospect customer. Take them on a journey of discovery and enlightenment that alters direction according to their behaviour and interaction. Communicate often and provide easy access to easily-digestible information, tools and resources through as many mediums of communication as possible while you learn your audience’s communication preferences. Make them feel valued and wanted as you encourage them to the next stage in your relationship. Development and Enablement Channel enablement, training and development are one of the most impactful elements of an indirect channel program and yet one of the least well executed by companies. The secrets to success are: 1. Recognize that learning is a collaborative process 2. Understand your target audience’s behaviors, preferences and needs 3. Realize that indirect channels largely don’t want or need to be trained by the company in order to do their job and earn a living 4. Provide a suitable delivery medium 5. Ensure that you can effectively test or validate training participation or knowledge transfer 6. Be able to instantly translate training participation into certification and accreditation outcomes 7. Incentivize or reward indirect channels for training 8. Link training-related incentives into program-wide individual or company incentive and reward schemes. Gameify of possible. 9. Deploy and utilize the infrastructure and systems to execute effectively and efficiently Point (9) is as critical to your success as it currently is to the failure of most companies in this area. Automation facilitates the simplification of the complex and indirect channel training and enablement is inherently complex yet incredibly rewarding if done well. Motivation and Incentivization Sales people typically respond well to being highly motivated and incentivized to sell. Indirect channel sales people are no different but don’t forget that motivation and sales-person loyalty has to be earned as well as bought so concentrate on providing high quality support and Channel enablement, training and development are one of the most impactful elements of an indirect channel program and yet one of the least well executed by companies. .
  • 111. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 111 of 113 behaving in a consistent, predictable and supportive way towards them. Don’t just focus on rewarding selling behaviors. Other activities are critical in nurturing and developing effective sales, marketing and support people so gameify all aspects of your program and reward all forms of collaboration including onboarding steps, training, deal registration, participation in collaborative discussions and communication response. Communication Indirect channel communications are arguably as important if not more important than the communications you initiate with your target customers. You should ensure that you take a strategic approach to planning and execution of indirect channel communications to maximize your impact and your likely return on investment. Ensure that you have the capability to communicate through every medium; email, web, social, messaging and mobile and make sure you allow your audience to opt in to the channels they prefer. Tailor syntax, semantics and calls to action to the medium and the response mechanism. Collaboration Going to market through an indirect channel requires a culture of collaboration to pervade through your organization. Your channel doesn’t market sell or support your customers for you, they do these things with you. Don’t expect your indirect channel network to do all of the work for you or in spite of you. Provide them with all of the tools, information and resources you would afford your own team. Let them benefit from your marketing activities with a steady flow of suitable qualified leads, reward them for bringing opportunities to you and establish robust ROI-focused programs for co-op marketing. Sell together, market together and support together. Service and Support Today, companies are recognizing the importance of ensuring that their indirect channels are as well informed as their own staff and that they are provided with the resources they need to an equal standard. Successful companies are making substantial improvements not only the content of portals but by replacing them with interactive web apps they are also making them “self-service” collaborative sales and marketing assets for indirect channels. They are now looking to complement them with sophisticated mobile apps that offer similar features and functionality while offering portability, mobility and instant access. In so doing they have recognized the importance and indeed the necessity of deploying their portals and mobile apps upon an integrated external collaboration and communication platform and providing an environment for real 24x7 ecosystem collaboration. Indirect channel performance management is about establishing a culture in which both company and indirect channels take responsibility for the continuous improvement of business processes and of their own skills, behavior and contributions.
  • 112. Relayware eBook © Relayware, Inc. 2013 www.relayware.com Page 112 of 113 Performance Management & Optimization Indirect channel performance management is about establishing a culture in which both company and indirect channels take responsibility for the continuous improvement of business processes and of their own skills, behavior and contributions. It is about sharing expectations. Companies must clarify what they expect indirect channels to do; likewise indirect channels can communicate their expectations of the company in terms of tools, resourcing and support. It follows that indirect channel performance management is about interrelationships and about improving the quality of relationships at all levels between the company and the indirect channel and indeed between members of the indirect channel ecosystem and is therefore a joint process. It is also about planning - defining expectations expressed as targets or objectives and in business plans - and about measurement; the old dictum is ‘If you can’t measure it, you can’t manage it’. It is a continuous process, not a one- off event. Last but not least, it is holistic and should pervade every aspect of running an indirect channel to market. And Finally… I have made a life, a career, a product, a business and a hobby out of effectively managing, leveraging and optimizing indirect sales channels. It is inherently difficult, much maligned and totally misunderstood by most senior executives. And it is precisely for these reasons that I still enjoy doing it, talking about it and writing about it after all these years. Like any poorly understood practice, executing a few basic principles well and adhering to a handful of golden rules can produce amazing results that to those less well informed can appear to be almost magical. I hope I have given you enough ideas in this book to go and work some magic of your own. Let me leave you with one final thought. Few executives will argue with the concept of improved workforce collaboration resulting in increased workforce productivity within their enterprise. If your company goes to market through an ecosystem of indirect channels, how then can your executives argue with the notion that the greatest productivity and hence the greatest revenue gains can be derived from collaboration beyond the enterprise. Spread the word. The greatest productivity gains and hence revenue gains can be derived from collaboration beyond the enterprise.
  • 113. Relayware eBook Relayware, Inc. 303 Twin Dolphin Drive 6th Floor Redwood Shores California 94065 USA Tel: 1 650 351 9150 Relayware Ltd. The Magdalen Centre The Oxford Science Park Oxford OX4 4GA United Kingdom Tel: +44 (0)1865 784 920 Collaborate Beyond the Enterprise ! Follow and recommend Relayware: Additional Information Additional information regarding indirect channel collaboration and communication and associated business processes and systems can be found on our website at http://www.relayware.com along with a detailed overview of how the Relayware external collaboration and communication solution can automate every phase of the indirect channel lifecycle and every component of your indirect channel program.