by Hobart Swan , originally printed in CCI’s Channel Management Insights Blog located here: http://outreach.channelmanagement.com/NL-2015-07-July-CMI_Main.html
The maxim leading many technology manufacturers’ channel strategy has long been the 80/20 rule: the top 20 percent of partners deliver 80 percent of sales so only focus on the top 20 percent. But what if the increasing sophistication of marketing technology can help alter that rule a little bit. Vaughn Aust, Executive Vice President for Digital and BI Solutions at MarketStar, says that advances in analytical and automation technology make it possible to get more business out of that often overlooked bottom 80 percent of partners. He’s been in the business a long time and just might be on to something.
Fresh out of college, Aust went to work for Laser Direct, a direct mail printing company. He soon left and was a founding member of a channel marketing company called Cohesion, which was later purchased by Hawkeye. Two years ago, Aust was recruited by multi-channel sales company MarketStar. For more than 25 years, MarketStar has proactively engaged business partners of companies like HP, Whirlpool, VMWare, and Google to drive sales and loyalty from targeted channels and maximize ROI across the entire channel. It is at MarketStar that Aust has focused his attention on helping manufacturers get the most out of their partner ecosystems.
Are SMB Partners Worth the Effort?
“We typically work with the mid- to lower-tiered channel partners,” Aust says. “Our clients usually handle the first tier using their own channel account management group. Clients sometimes employ us to re-engage the “long tail”; those smaller partner organizations that maybe at some point in the past purchased a product or registered for the partner program or responded to some marketing campaign. Looking at their RFM (Recency, Frequency, and Monetary return), vendors just don’t think it’s worth it to try to establish relationships with them.”
But, Aust says, given the heightened competition among vendors for the best partners, the rise of cloud services that require a different partner set and the potentially enormous new deals hidden in the long tail, some manufacturers are seeing the light. They understand that it is more than worth effort to identify those overlooked partners that have the potential to become very productive.
Large Vendors See Success from “Partnermation”
“The long tail is usually ignored because of the cost of engaging with them. We’ve asked our clients to give us a shot at finding the diamonds in the rough—to see if we can re-invigorate the bottom of the channel. “
A few very large vendors have taken MarketStar up on their offer and seen some very impressive results. In the first month of its work with HP’s lower-tiered partners, MarketStar closed $750,000 in sales. HP’s won opportunities soon rose to nearly $9 million with an open pipeline of $45 million. VMWare closed $1.5 million in incremental sales in the first six months.
If the goal is to efficiently locate these diamonds in the rough, then Aust’s solution is to use some very strong lenses. And that’s where technology, and people power, come in. Aust calls this combination “partnermation” and defines it as the use of lead-nurturing technology and personalized channel-account management to surface opportunities and close deals. Partnermation enables clients to first, reach every partner in the vendor’s ecosystem; to do it affordably, efficiently, and to scale; and then to prioritize the attention each partner gets based on its level of interest.
It Takes More Than Just Good Modeling
“I spent time early in my channel career building propensity models to see what a top-tier partner looked like: how many people worked in the firm, how many had a technical background, where was the partner located? We would look at tons of factors and attributes to understand what made a top-tier partner and look for similar partners to identify lower-tier partners to pay attention too.”
Like other companies, MarketStar ran propensity models and coverage models to try and determine what lower-tier partners to pay attention too. In the process, Aust realized something: The element they were missing was an understanding of a partner’s level of interest in doing business with a vendor. And to gauge that, he turned to lead-nurturing technology.
Good Technology + Real People
“You can use lead-nurturing technology to create value streams based on personas. If you have data about these partners—if you know that a partner is technology-oriented, or if the contact is the owner-manager, then you can use that information to start tailoring your messages.”
Identifying partners with the most potential comes down to sending tailored messages via values streams to the entire partner pool, and then seeing who has interest. The trick to engaging partners is to not send generic messages from the brand or the channel company.
“We send messages from a specific MarketStar employee—a real person we have hired and trained to represent a specific vendor. This is the person who, if the partner shows enough interest, will pick up the phone and call them. What this does is signal to these otherwise ignored partners that they are important, that we’ve got someone who wants to nurture their interest in doing business with the brand.”
The Scoring Rubric Table
Picking the right messages to the right personas and partners is a both an art and a science in itself. Marketing automation technology uses the concept that every bit of partner activity to marketing messages equals a score. If an otherwise unresponsive partner opens an email, they might get a score of one point. If the partner visits a key website, maybe they get three more points. A click on an email links, add five, then ten more for attendance at a webinar or trade show. Adding up these points enables the channel representative to understand a partner’s actual level of interest.
When the point total reaches a certain threshold, the human side of the partnermation model kicks into gear. That usually takes the form of a phone call from the sales representative MarketStar has hired and trained to represent that vendor.
Giving SMB Partners the Personal Touch
“Our rep might say something like, ‘Hey, I saw that you looked at our email about registering a deal, and that you clicked through and spent some time looking at our newest security product. If you want some more information on it, I can send you a brochure. And if you’re interested in registering a deal on it, I can get you three points on the deal.’ ”
And so begins the process of singling out those lower-tier partners that seem to have both the interest and the competence to make it worth the vendor’s money to engage with them.
“It’s absolutely true that it takes way too much money and time to go after the entire long tail. Our partnermation process enables us to efficiently find the 3 to 5 percent of the larger partner pool that we can graduate up to a higher, more productive tier.”
Make Things Easier for Partners—Even Small Partners
There has been a lot of effort on the part of vendors with a large channel presence to make it easier for partners to work with them. We’ve seen improved partner portals, better written documents, easier access to training tools, and similar actions. Partnermation is really a matter of extending that same welcoming attitude toward the long tail.
“If you’re a partner in the long tail, how are you going to get anything from a manufacturer that’s made up their mind you’re not worth the effort? How are you going to get information about their products or get support or training? But then you start getting a few tailored emails from the vendor, maybe you click on a couple of links and watch a webinar—and suddenly you get a call from a channel account manager saying, ‘Hey, it looks like you’re interested in selling our storage solution. I can get you an incentive.’ That can really get a partner excited.”
Speaking of Long Tails
Aust says he sometimes thinks of working with long tail partners as herding cats. This is not so much because cats are difficult to control, but because cats that have not been getting much attention tend to act in their own self-interest.
“Cats like you as long as you feed them and pay attention to them and scratch them behind the ears. But if you ignore them, they’ll just wander off and get their food from the house next door. Ignored partners tend to act the same way.”
Getting that Competitive Edge
Aust’s rollout of partnermation has clearly shown early success with companies such as HP and VMware reaping considerable upticks in channel sales. But Aust sees other benefits from this innovative mix of technology and human engagement, including greater pipeline visibility, more closed sales, and more channel engagement. There’s also more buzz for the vendor as long tail partners start talking about how the vendor has reached out to them and made them feel welcome.
“The bottom line is that those manufacturers that figure out how to get the return from their partner long tail without too much investment—those are the ones that are going to win. If they can find a way to efficiently generate value out of that lower 80 percent, then they’ve put themselves a much more competitive position.”