Despite the disruptions affecting every industry, enterprise technology vendors continue to rely on their channel partners to evangelize their solutions and optimize reach and relevance across diverse market segments. As the State of IT report 2021 confirms, the pandemic catalyzed hyper-accelerated digital transformation initiatives across industries and global en-masse migration to cloud and edge computing. The almost-overnight (now almost-permanent) shift to remote work and distributed teams has also multiplied the potential for productivity, collaboration, engagement, and security related technology solutions across every business function. These factors ensure that channel partners are more in demand than ever, helping companies make the right tech investments.
However, multiple factors are impacting the channel landscape today – and five key trends are significantly impacting the vendor-partner relationship. Mastering these will help channel marketers stay ahead of the curve and continue to drive revenue and profitability along with, and via, their channel partners.
Collaboration, co-creation, subscription – the new partnership paradigm
The nature of the IT vendor-partner relationship is evolving rapidly. In most cases, it has transitioned from being a transactional ‘product-reseller’ equation to one of ‘partnership’. But in the best cases, it has been elevated to one of ‘collaboration and co-creation’, prodded by the growing market preference for value-as-a-service approach to technology sourcing and deployment. The preference for value-based outcomes and SaaS rather than delivery or deployment models stems from changes in customer behaviour and expectations, who expect technology to deliver business value, coupled with agility and flexibility. This has almost forced the shift from a ‘license’ approach to a ‘subscription’ approach in technology purchases. In the last year alone, Cisco, Dell, and IBM have all moved to subscription or consumption based pricing models, and HPE has already announced plans to get there by 2022. This factor perhaps has the greatest impact on the vendor-partner equation, because it most dramatically underlines the importance of customer relationships, retention, renewals, and the way both vendors and their partners define customer service and success.
As a result, ‘owning the customer relationship’ has never been more critical – for successful enterprise channel marketers, it’s not a question of either-or. They understand that vendors and channel partners must collaborate and co-create value, as well as jointly own, nurture, and grow their most valuable customer relationships. As a benchmark, Microsoft’s CEO Satya Nadella calls Microsoft a partner-first company, and views every business model change through a channel lens, asking how it would impact partners and help them drive technology acceleration.
Automation and scale are central to managing complex channel programs
The expectation of personalized solutions and managed services for diverse customer segments also means that channel partner programs are increasingly complex. They demand more integration, data management, and tracking for channel marketers to continue optimizing ROI on MDF investments. For enterprise scale organizations that already enjoy a mature channel program, it’s increasingly critical to invest in a full channel tech stack capable of delivering end-to-end partner management solutions and manage the hundreds of moving parts that make up a well-oiled channel marketing machine. Forrester defines seven solution areas for the ideal channel tech stack: channel learning and readiness, through-channel marketing automation (TCMA), channel incentives and program management, channel marketplaces and financing, channel data management (CDM), and ecosystem management. A comprehensive tech stack is essential not just for creating seamless partner experience but also to yield incremental sales by aligning brand marketing and partner selling processes seamlessly. It closes the loop by reporting back on ROI, and improving decisioning quality.
PX (partner experience) takes centre stage
It’s a no-brainer that in a value-driven selling environment, good partner experiences will drive good customer experiences. The challenge for channel marketers is to understand their partner’s key priorities and align them with their own business objectives. There is growing competition for the best performing VARs and MSPs, who often have multi-brand portfolios. Getting and keeping their attention and loyalty needs more than the standard channel partner programs – it needs differentiated PX strategies that make it easy, predictable, and profitable for them to sell the vendor’s solutions.
Channel marketers are experimenting with and reinventing several of the core components of PX in order to build a stronger, more engaged community of partners. They are finding new ways to offer agility and flexibility to execute selling programs in highly dynamic markets; and enabling partners with the skills and tools they need to evolve smoothly into the digital age. This often means investing heavily in expanded training programs and curriculum to drive strategic selling of flagship product lines, and providing technical and operational support to measure outcomes and ROI reporting. They are also architecting highly complex and customized tier-based programs based on size, business potential, value, level of engagement, and interest. The outcome is that the channel partner has deeper opportunities to engage meaningfully in the product development roadmap, and this can be very valuable on both sides.
Working as one team for seamless CX
Streamlining and aligning channel marketing with the brand’s direct sales and marketing efforts is a key trend that’s helping channel marketers take outcomes to the next level. When the brand’s entire strategy is built around customer-centric buyer journeys, keeping channel marketing in a silo is counter-productive. Alignment and streamlining is central to removing the inherent friction that exists between corporate objectives and channel partner goals. Large brands are still figuring out how to combine channel marketing platforms with their broader marketing platforms, providing reusable and transferable content across these platforms, and streamlining and automating the process of syncing partner campaigns and other channels in the marketing mix. Such an approach also calls for providing more upstream and downstream visibility into MDF investments for all stakeholders – marketing, sales, channel marketers, and channel partners.
For vendors, channel partners who are aligned to and in sync with the overall strategy can also be an invaluable voice on the team when it comes to defining go-to-market (GTM) and product strategies. They can offer deep insights and feedback as they are directly in touch with diverse customer segments before, during, and after the deployment of various technology solutions.
From partner channels to partner ecosystems
A major industry trend in recent years has been the addition of ‘non-transactional’ partners to the channel partner list. These are parties that are highly influential in the sale but do not actually sell software or technology. In fact, Forrester has divided channel partners into three categories: influencers, transactional, and retention focused partners, based on the role each plays in the technology selling value chain. In disruptive years like we had in 2020, when there may be a slow down or complete pause on immediate buying activity, it’s important to not just keep the brand top-of-mind via multiple influential channels but also keep the pipeline alive and ensure subscription renewals are protected.
Social media influencers, brand or technology evangelists and ambassadors, content marketers, referral and affiliate agencies, and community thought leaders such as analysts play a critical and influential role in creating awareness around the investment business case and creating interest in new ideas. These ‘engagement – or non-transactional’ partners, aside from highlighting aspects of the technology or solution beyond purely technical aspects, also help marketers reach a much wider base of the decision-making or IT buying collective which itself is growing in size and complexity. For example, a technology purchase that involves employee experience (EX) will involve not just IT but also HR and other functional leaders, who do not consume the same media as ITDMs. They need to be reached through HR influencers who can speak to the importance and value of such an investment, and marketing leaders who face talent retention challenges. Similarly, recognizing and enlisting digital marketing agencies as influencers and even gatekeepers in martech investments, or privacy and security consultants for security tech are examples of expanding the scope of partners.
This expanded set of micro and macro influencers and non-transactional partners, working together with the more traditional transactional channel partners, make up the new channel partner ecosystem. Such ecosystems demand that channel marketers relook at how they approach channel incentives, performance attribution models, and challenges around data privacy when it comes to sharing prospect and customer information across a wider set of internal and external stakeholders.
In conclusion
All these trends present new opportunities and risks for IT vendors and partners, and while they certainly bring the promise of more value-driven and sustained business opportunities, especially in the subscription economy, they also demand new approaches and significant investments of effort and resources from channel marketers to drive effective change.