Finding Gold in SMB Partnerships

By Channel Insider Staff  |  Posted 2004-05-06 Email Print this article Print
 
 
 
 
 
 
 

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Technology vendors realize there's gold in small and medium-sized business, but to mine these relations successfully isn't easy.

The next "gold rush" is upon us. The large technology vendors, like IBM and HP, have seen the glimmer and named it "SMB." Whether you call it "midmarket," "small and medium-sized business" or just plain "gold," the shovels and pans have been bought, and everyone is heading for the river.

But you can't pan for gold with a tractor, so the bigger companies have no choice but to concentrate on increasing market coverage for SMB via the channel. The trouble is that in the rush for the prize, all of the usual mistakes are being made. The tools being jointly used by vendors and their channel partners are not sharp enough. The methods being used are not efficient enough. Ultimately, there's an awful lot of gold spilling from those pans, and it's coming straight out of your wallet!

The joint sales and marketing activities being run by vendors and their partners are brittle, leaky and, frankly, need a good makeover. The good news is there is enormous room for improved sales productivity in this area, which will delight sales managers, directors and CEOs alike.

So what's the problem? Where to start! Here are some top line issues that we see every day while working with both large technology vendors and their partners:

At the channel level

You have signed up for the "Platinum" partner program that gets you referrals, sales leads and all the other wonderful benefits that will make your business take off. Pretty soon, however, you begin to realize that these "co-marketing" leads are pretty weak. After a while, your sales team starts to ignore them as a waste of time. One of the key benefits you signed up for has just proven worthless.

Then again, maybe you use "co-marketing dollars" or rebates from the vendor to 100 percent fund your lead generation or sales development. The trouble is, the vendor wants you to report back on the closed deals and how much of their "kit" you sold because of this, and you haven't the faintest idea. How many co-marketing dollars (let alone vendor mindshare) are you losing because of this?

At the vendor level

ROI is the phrase of the moment, and vendors need to prove this in their partner co-marketing as much as anywhere else. More importantly at the street level, the "client managers," "channel managers" or whatever the vendors are calling their people these days are ultimately salespeople. These people have sales targets to hit and commissions to earn. If their channel partners cannot accurately report on closed deals resulting from co-marketing, their pay and possibly their jobs are at risk.

Channel marketing teams need to prove ROI in order to secure budgets from within their organization. Unrecorded revenue means budgets get cut next time around, which ultimately means less co-marketing dollars for partners.

Plugging the holes.

While these challenges are not easy to fix, with the right systems, procedures and, most importantly, discipline, you can very quickly make an enormous impact on your co-sales productivity. Here are some golden rules that can help:

For partners

1. Leads alone are not the answer!

Simply throwing more leads at your sales team is more likely to reduce sales productivity than enhance it. You don't just need better-qualified leads or meetings. What you really need are "engaged opportunities." These are highly qualified opportunities, where the people generating them are also introducing your salespeople to the buyers and helping to embed them in that opportunity. After an initial discussion with the buyers, your sales staff should be free to push the opportunity back to the lead generation team if it does not "qualify in."

If you can't do this in-house, then outsource it to someone who can. You'll ultimately save money by enabling your sales team to concentrate on closing real opportunities instead of wasting time with the wrong people.

2. Qualify out, then nurture.

While IT spending is on the increase again, projects are still being delayed and suspended. If your sales team can't see near-term revenue opportunity, they will probably ignore this opportunity until it is too late to get back in.

If you have to, "qualify out" an opportunity, make sure someone stays in touch with the primary contacts on a regular basis. If you don't have the resources or discipline to reliably do this in-house, find a company that will.

3. Analyze sales/engaged opportunities by market segment, then adapt.

There are only so many companies and market segments you can effectively cover with a limited budget. By continuously analyzing which micro-segments your "engaged opportunities" or sales are coming from, you can zone in on the most profitable areas and substantially increase your sales productivity.

For example, you may focus on the market segment "retail companies with more than 100 employees." However, if you break this down to companies with employee numbering between 100 and 300, 300 and 600, 600 and 1,000, and 1,000+ you could find that 70 percent of your opportunities are coming from the 600-1,000 bracket, so you can afford to do much more resource-intensive selling to this group.

For vendors

1. Benchmark partners against each other.

Vendors must analyze which partners are "playing ball"—reporting on status of leads, wins, losses, ROI—and which are throwing your co-marketing funds down the drain.

Most importantly, if you track wins and losses, you'll begin to find out if there is a stronger potential partner out there that is consistently beating your existing partners in a particular area. In this way, channel co-marketing becomes part of the channel recruitment cycle.

2. Sales must take responsibility.

One of my colleagues recently spoke with a company sales director who admitted having a problem generating new "real" opportunities for his salespeople. This was affecting sales results but his attitude was that lead generation is marketing's problem, not his.

The fact is that marketing teams are usually incented to generate "quantity of leads." Sales teams are encouraged to spend time closing well-qualified opportunities. Sales directors can moan about the leads from marketing, or they can accept the responsibility and force a new solution.

Mike Kelly is managing director of Technology Sales Leads (TSL), an outsource company based in Ireland and Boston. TSL works with technology companies to increase sales productivity in both direct and channel sales through consulting, lead generation and sales metrics analysis. More information is available on www.tsleads.com, or Mike can be contacted at mkelly@tsleads.com.

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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