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Why it’s Important to Segment your Channel

Why it’s Important to Segment your Channel

 

Technology vendors, with channels, should segment their partners. It’ll lead to more revenue and better channel stickiness. It’s a bold, but correct, statement.

Let’s set something straight. When I talk to the industry about partner segmentation most vendors believe that they segment partners. However, this activity almost always starts and stops with one, or a combination, of these three approaches that are built entirely from a ‘vendor lens.’

  • Some vendors believe that “segmenting the channel” simply means they should align partners to the different programs or requirements associated with their diverse company offerings – and the segments are usually related to sales achievement and training and certifications. This approach is often conducted by Channel Sales or Operations people.  It’s important, but not sufficient to accelerate revenue.
  • The next level, which is an improvement on the first but not fully formed, is the approach that partners should have personas. And, when these partner types are named they can be marketed to. You’ve heard these names “one-truck Chuck” or “services lead Fred.” As important as these partner personas are, they still fall just a bit short of what I’m suggesting for your company. They’re usually derived by a creative Channel Marketing person, and use Marketing Interaction data. It’s helpful to know what partners you should market to, and when; but not sufficient to accelerate revenue at the level you demand in the current economy.
  • The third level is when you take these first two approaches, and bolt on a third layer that tries to historically view the partner ecosystem with your sales out data, or something that’s tagged in your partner database, like PRM interactions. This is a significant improvement, but it still provides a reactive view vs. a proactive view.

If you’re not taking one or more of these three approaches, YOU SHOULD. But, they’re still limited.  They are unable to drive revenue quickly enough because you’re sales and marketing people are always responding to (reactive), rather than driving to (proactive) sales.

As cool as snappy names and sales out data are, they really don’t get to a proactive view on how partners should be approached based on their evolving capabilities. Partner predictability, when available, is the endpoint you really want to arrive at with your partner segmentations. And, THIS, is what I’m suggesting you do to segment your channel. Here’s a simplified view of the process:

Why it’s Important to Segment your Channel

I attended several industry conferences last year. In each of them, the question was asked, “How many of you are MSP’s?” The answer, about 90% of them.  Just like two years ago when everyone was searching for the ISV that was “born in the cloud,” now the industry is searching for the “Everything as a Service” MSP to support their upcoming cloud business.  Sound familiar?

You want MSP’s and all MSP’s are created equal, right?  That 20% of partners that drive 80% of your revenue will be sufficient for your growth – because that’s who the sales people sell to, and they’re always loyal to you, correct?

I just don’t think so.

MSP’s aren’t created equal.  Some are new to services, let alone solutions.  Some are print MSP, software installation MSP, some create and manage solutions, some are in security, IoT, embedded analytics, PC’s.  Can they all do the same thing, and align to exactly what you’re looking for?

When you categorize partners, these categorizations aren’t binary. They’re not ISV or Not; MSP or Not; Distributors or Not. They consist of a blend of capabilities, they focus on different areas, have different strengths. Most are dang good at one thing and very new to another. How do you tell the difference between them? How do you add to that 20% that drive 80% of the business so your revenue grows; and become more predictive?

You need more data to give you a more holistic ‘market lens’ on your partners, and a smarter way to analyze what they’re capable of.

bChannels has created the largest industry database of partners on the planet. It’s taken us several years to build it. It’s expanding, constantly refreshed, and drillable to the country level. There are other companies that focus on individual regions, distinct verticals, or specialized product sets (we ran across a company that’s developed a database for the US that focuses specifically on A3 printers). You need to engage with a vendor like this to help you be proactive in your ongoing business evolution and journey with you from product to product or solution to solution; OR even to identify what partners can make the difference for you NOW. What you’re trying to understand looks a little like this:

 

Why it’s Important to Segment your Channel

In its simplest form, partners can be viewed on a matrix of engagement and capability. Each partner, depending on where they fall, has a different set of needs. And, some of them should be IGNORED COMPLETELY. Here are three reasons you should do this type of proactive segmentation:

  • You and your distributors only have so much time and resource to manage partners. The vendor has a 1:1 relationship with the 20% of partners that drive 80% of their revenue. Then, they ask the distributor to recruit, reactivate, or re-engage with all the rest. Truth is, distribution is only going to pick up about another 10%.  Distributors work across multiple vendors and ALL OF THESE VENDORS ARE ASKING THE DISTRIBUTOR TO DO THE SAME THING.  They just can’t drive to the next layer, even though they’d like to. So how do you engage with the “up and comers” or the ones that are best able to self-serve?  Know who they are and prioritize them with the right offer. 

Modeling the data that we’ve just spoken about will help you to be more proactive, understand who’s going to reach the point you want quickest, and focus your energies on them. It’ll also help you to ignore the resource suckers. There are a whole host of partners that want to build their businesses, and they’ll do it at your expense if you let them. Know who you should IGNORE.

  • This type of data will provide information on the other vendors who you are competing with. Don’t spend time on mono-vendor partners, unless they’re yours. To topple another vendor from one of these partner you have to have a VERY strong value proposition and extremely good reason to do it. Difficult to know if you should take a crack at toppling another vendor if you don’t have proactive data.
  • Relevant Content. bChannels talks to a lot of partners. These partners typically have 3 common complaints.  One is price.  The second is incentive. The third has to do with the vendor’s tendency to send them so much content that they can’t filter through it all; or to place so much content on their portal that they can’t sift through it.  So what’s the problem with too much content?  When they can’t find what they’re looking for in 30 seconds or less, they’ll go to the distributor portal where they might find your competitor before they find what they’re looking for from you. The vendors that can cut through the noise, and fine-tune the offering to just what these partners WILL need, WHEN they need it, will drive better loyalty and drive quicker revenues.

So, if you want faster revenue, proactively engage with the partners where the relationship is mutually beneficial. Support the partners that are more engaged with you than your competitor. And, roll out offerings with qualified partners that are headed in the same direction as you vs. partners that your sales people ‘think’ will be the right fit. When you show that alignment to these partner, they’ll return the efforts with loyalty, because the best partner engagements are truly a mutual relationship. Without a proactive segmentation, you’ll never have the data to support any of these efforts.

As you’d guess, bChannels has a Partner Segmentation offering. Partner Segmentation from bChannels gives vendors immediate insights into the quantity and quality of partners with the right capabilities in the marketplace they are working in.  It’ll help you:

  • Easily and quickly see who has the desired blend of capabilities in existing partner ecosystems
  • Speed up the time to acquire new resellers who have the right skills and focus
  • Ensure investments are correctly spent on working with the partners with the right skills and focus

Our proprietary techniques are unlike anything available in the industry today. We use a unique approach to segmentation that leverages AI, and captures and analyses the words and phrases that partners use today to describe their business to their customers and proactively identify the partners that are your best fit for now and tomorrow.

You might be interested in the other two blog posts I wrote in the past. How to Deliver a Best in Class Partner Program Experience (with infographic) and Do You REALLY Listen to Your Channel Partner?

If you want to know more about how bChannels can help you with Partner Segmentation, you can contact us here

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