We have recently been asked by a couple of clients to help them design, build and implement a new partner program, either as a re-launch of an existing program or as their first serious attempt at recruiting and managing partners. We hope this article provides an insight into what to do, what not to do, or even prompts you to do a quick check of your own partner program to see if it is suffering from complexity or “program bloat”.
Before going into the intricacies of program design, let us remember what a partner program is meant to do in the first place, what it is not, and ultimately why you need a program of some sort.
Let’s start with the definition of the word “program”. It is a noun, defined as a plan or schedule of activities, procedures, etc. to be followed. Simple, right? Then why do some vendors’ programs make it overly complex for a partner to engage, or even work out where they would fit into the program. Sometimes it is due to legacy issues that result in “program bloat”. This is where additional requirements or benefits are non-aligned but tacked on as an afterthought. Other reasons may include vested internal interests that can end up high jacking program ownership, adding on layers of compliance rules, or even changing the funding model without thinking of the partner consequences
Good partner programs clearly spell out how a partner does business with the vendor, and therefore what the requirements and associated benefits are. The simple and quick test is that you should be able to give the program outline to an independent third party and they can conceptually understand the rules and benefits of working with the vendor.
The first thing we do when asked to do a program review or design a new partner program is ask 5 simple questions. These questions are sometimes harder to answer than they appear:
1. Is the business strategy and the channel strategy clear and are they aligned?
2. What do you want the partners to do?
3. What do you not want the partners to do?
4. How many partners do you want to manage now and within the next 12-24 months?
5. What resources do you have, or plan to have to support the partners and the program?
1. Is the business strategy and the channel strategy clear and are they aligned?
The answer to this question should help you identify who your target customers are and consequently which partners or partner types will help you reach them.
2. What do you want your partners to do?
The answer to this question will be ‘to sell our products’. With that said, do you want all partners to sell your products or did you want to restrict access to some, offering them only to partner that invest in training and certification?
3. What do you not want your partners to do?
How do you want the partners to engage with both yourself and the customers? What are your rules of engagement? Answering this question will determine your sales model (direct sales, distribution etc) and clarify how you would like partners to behave when it comes to selling your products.
4. How many partners do you want to manage now and within the next 12 to 24 months?
This question will assist you to determine the basic structure of your partner program. It will aid in determining how many program tiers would be appropriate, how you will differ between these program tiers and what the extent of the associated requirements and benefits will be.
5. What resources do you have, or plan to have to support the partners and the program?
Answering this will result in defining the programs operational points such as:
Can you offer financial incentives to the partners (such as deal registration and rebate programs)? Do you have a training and enablement program for the partners to support the broader partner program? What kind of support can you provide the partners? How will you communicate with them and what will you use to report on program compliance and participation?
What the answers to these questions often reveal is that the program has become the centrepiece of the partnering strategy, designed, and built before the go to market strategy was finalised. In practice, the partner program should be close to the last piece of the partnering puzzle, and reflect the above questions in the order they are presented
In addition to this, the answers to these questions will provide you with the information you need to develop the key elements of a Partner Program. With this information on hand you are then in a position to design, build, and implement an effective and sustainable partner program suited specifically to your business.
Here are our four top tips for good partner program design:
1. Don’t over complicate it, design it for your needs.
Many smaller vendors look at the marquee vendors and their programs such as Microsoft, Cisco, and HP etc. and then try to emulate them. These massive programs were designed to manage thousands of partners on a worldwide basis, covering hundreds of product variants with thousands of SKU’s. They are complex programs because of the complexity and variations that come with being a multi-national vendor. If you are not going to manage thousands of partners, maybe you do not need 4 tiers that have a matrix of specialisations as an overlay. You need to ensure that you design your program appropriately.
2. Leave room for growth or change.
One certainty is that your product set will evolve, the market will change and therefore your partner program will also need to change over time. The program needs to reflect new products and the state of the market as it evolves and contain relevant partner requirements. Therefore, do not build a program that paints you into a corner, it needs to be flexible and adaptable. For instance, today you may not have a need to operate through distribution. Perhaps the direct to partner tiered pricing and benefits structure currently provides the maximum possible discounts i.e. lowest comfortable net operating margin for you as the vendor. That said, how would you fit in distribution at a later point in time without potentially upsetting all of the existing partners? Think what your channel go to market structure may look like in the next12-24 months and make sure you have the flexibility to adapt what is launched or in market today.
3. Ensure the requirements meet the rewards.
One of the key aspects of a program is to ensure that the requirements of doing business with a vendor (e.g. training, certification, inventory, services etc.) are aligned to the benefits offered by the vendor. The benefits offered (either financial or otherwise) should compensate the partner for their investment in the vendor while still enabling them to make a suitable profit from selling the vendor’s solution. A quick check is often required to ensure that there has not been “scope creep” related to the program. This is where the vendor requirements have gone up but the overall partner net margin is no longer aligned from a partner perspective.
4. Resource adequately, do what you say you will do.
There is no point offering a huge range of requirements, benefits and program features if you do not have the resources to provide consistent program delivery and management. For instance, if the program requires re-certification every 12 months is there an online portal with a structured and automated Learning Management System to manage this process? How are partners notified when they are due for recertification? Conversely, how do you plan to validate the results and decide whether a partner is in fact compliant? All of these aspects need to be considered when looking at program development and management from the vendor’s perspective.
The bottom line is that good partner programs are designed to complement and enhance the vendor’s go to market strategy. They are flexible and adaptable to allow for future business, product and market changes. They have aligned program requirements and benefits so it is easy for the partner to understand how to do business with the vendor and what is expected of them. Lastly they have been developed with vendor resourcing availability in mind ensuring that suitable program delivery and management is possible.
