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Channel Management Summit Partner Performance Management and Optimization- Establishing and Environment where Vendor and Partner Invest in Continuous Improvement A Case Study from actual experience Paul Flanagan 9/2009
Willie Sutton Bank Robber "Why did I rob Banks?...because that were the money is.. go where the money is and go there often!!"
Partner Commandment #1: Partners go where the $$ and Margins are and they go there often Partner Commandment #2: Partners are not risk takers. They need a partner centric business model
The Case Study Background/ Channel Environment: $ Multi Billion Networking Company Over 500 Enterprise System Integrators, VARS, OEMS, Resellers and Distribution Partners Introduction of new VOIP, Wireless,Content Data Video Networking Products 100 + Channel Sales Reps and 12 Channel Sales Managers Partners are Regional, National and Global in scope Partners /Sales Teams have a feature benefit function sales perspective New Sr. Director of Channel Sales Non Productive Alignment of Channel Sales Teams and Partners Channel Sales Teams Have $$ Goals/Quotas. Partners have $$Targets Partner Sales Teams $$ compensated for product sales..no Goal/Quota relief Discount pricing structure fosters account cannibalization. negative impact on revenue/ market share growth and No Metrics for Channel Management and Evaluation
Problems: Heterogeneous mix of Channel Partners Sales Teams don’t know how to sell solutions Quotas based on aggregate $$ as well product sales goals Non Effective Channel Sales Team to Partner Coverage ratios Need to Re-architect Channels Coverage Model based on metric
Challenges: Re-architect Channels Coverage Model based on metrics Change Partner Discount Pricing Model to minimize account cannibalization and promote revenue/market share growth Develop and implement joint Business Planning Process with quantitative metrics
Re-architect Channels Coverage Model based on metrics BCG Model Adapted
Analysis/Ranking Criteria: Re-architect Channels Coverage Model based on metrics: Past/ Current Revenue Growth Analyzed by Product/ Total Willingness to be “ inch wide/mile deep( GEO or Technical) Willingness to accept joint measureable $$ quotas/goals Willingness to commit to development of joint business plan and quarterly review Ability to provide $$/ Resources for targeted Sales/Marketing events
Channel Ranking Metrics: Rising Stars: Revenue Growth 25% or Greater Develop joint business plans reviewed quarterly Acceptance of Quotas Contribute Resources for Sales/Marketing Activities Commitment / investment to be go to partner for a technology/geography 1: 1 Channel Sales Team Coverage Question Marks: Revenue Growth 15 -25% Develop joint business plans reviewed quarterly Acceptance of Quotas Contribute Resources for Sales/Marketing Activities Commitment / investment to be go to partner for a technology/geography 2/3: 1 Channel Sales Team Coverage
Channel Ranking Metrics Cash Cows: Revenue Growth constant in 15%-20% range Develop joint business plans reviewed quarterly Potential Acceptance of Quotas Potentially Contribute Resources for Sales/Marketing Activities Commitment / investment to be go to partner for a technology/geography 3/4: 1 Channel Sales Team Coverage Dogs: Revenue Growth less 10 % positive or negative growth curve Develop joint business plans reviewed quarterly Non Acceptance of Quotas No Resources for Sales/Marketing Activities No Commitment / investment to be go to partner for a technology/geography 5: 1 Channel Sales Team Coverage or Web Based support
Channel Performance Management Dashboard Key Partner Performance Indicators: Product Territory Partner Enterprise/Mid Tier/ SMB % of Goal Top Ten/ Bottom Ten
Channel Discounting Model: Change Partner Discount Pricing Model to minimize account cannibalization and promote revenue/market share growth: Partner Model: Platinum- Gold- Silver Discount/ Pricing ranged from 15%-40% Discount/pricing based upon agreements to attain revenue targets If targets not met no readjustment Hold Partners accountable to targets Reduce discounts if warranted Partners with higher discounts preyed upon installed base with lower discounts Use Deal Desk Registration to determine if new or existing account 15% discount if deal is for an existing account taken from a partner
Results: FY Revenue Goals met at 130% of Goal Channel Sales Team trained to work with Partners to sell Solutions Partner Satisfaction Goals exceeded by 20% Effective Coverage models established $$ Goal Oriented Business Plans developed and reviewed Qtrly Account Cannibalization reduced
Lessons Learned: Think out of the box This was a major paradigm change. many speedbumbs Regular communication with partners ,management, sales teams Be visible in the field..engage Be prepared to teach , justify and explain a multitude of times Be prepared to lose some partners. most likely dogs Sell senior management before moving forward and have their support Be prepared to see Channel Sales Teams on the benefits to them Be prepared to lose staff that can’t or will not make the change Be prepared to sell Channel Partners on benefits to them Spend time in the field With Channel Sales Teams and Partners Be willing to tweak model as needed Be willing to alter KPPI on a quarterly basis Enjoy the ride!
Questions??? If your Channel Strategy /Programs need change Contact: Paul Flanagan [email_address] 650-799-1882