Operating an Agile Channel Management model is essential in today’s business climate for any company with a partner-led GTM strategy. This includes:
Software, hardware, and/or services vendors
Distributors and others that rely on a one or two-tier channel
Any company in the process of building out a new platform-based ecosystem – such as GE or other industrial players trying to create an industry platform.
Why is this critical?
In today’s market, companies must continually innovate and innovation requires companies to be agile in every way – to be the first company to delight the customer, to adjust quickly to new competition or market forces, and to have a team that can continuously learn and succeed through collaboration. Agile, regardless of domain, is about 4 core principles – moving Fast, Adapting rapidly to new situations, focusing on the Customer, and acting collaboratively as a Team. Our acronym for this (just to get on the acronym creation bandwagon) is F.A.C.T. – Fast, Adaptive, Customer-centric, Team-based.
If you are slow to innovate, not tracking customer feedback, not responding to change and not working together, you lose.
Please re-read the sentence above. For those of us who have worked in channel management and have partner-led GTMs, we just described the common challenges of managing a partner network.
Does this mean that channels are doomed to fail? Should companies minimize dependency on partners because of the difficulties of managing complex partner relationships in an agile way, and just go direct to the customer? The answer is yes and no….
The YES part is simple:
If agility is all about delighting customers, you had better know what delight means for the END customer.
Even though your GTM may be partner-led, it had better be supremely guided by a deep and resonant understanding of the end customer. After all, innovation is about finding unmet needs, so you’re going to need to really know the customer to do that. And this means having a direct feedback loop for customer information, behavior, and need.
The NO part of the answer is that if you can figure out how to address the F.A.C.T. imperative, the channel can be competitive advantage in your GTM.
We think the solution to this riddle is to conduct what we call a Through Partner Customer Cluster Analysis. This involves gaining a holistic (often ethnographic) understanding of the partner’s behavior, motivations, and business model in regards to a given customer segment. Think of this as a persona for the partner and their relationship to the customer. The work identifies fundamental profitable and sustainable ways the partner can join you in creating customer value driven by customer needs. The output helps determine what elements of the partner GTM need support and how to do that in a win/win with the partner and the customer.
Before beginning this journey it is important to land the idea of a Cluster formed by the combination of the partner’s business model and the particular end user segment. Companies thinking myopically about GTM often focus only on their own relationship with the partner and the end customer, without considering that there is a whole lot more going on between the partner and the customer. This includes other products, people issues, data issues, process issues, business and operating model considerations, and etc.
The Cluster Analysis is intended to gain insight into the partner’s entire end-to-end value prop and offering, and the underlying partner/customer met and unmet needs. The figure below illustrates where the traditional vendor/partner/customer approach focuses, vs. our proposed, end-to-end agile approach.
The analysis often leads to the conclusion that partner engagement should be broader than just the traditional GTM elements of selling and supporting a product. An example output are the partner business model transformation initiatives that vendors like Microsoft, Cisco, VMWare, SAP and others developed to help transform partner businesses to support cloud GTMs. Transformation services are not going to sell the vendors’ cloud offerings but they may be a necessary (unmet need) to prepare the partner to drive a cloud-first business model. Many other examples outside of enablement are relevant, in areas such as demand generation, solution assembly, and customer success management.
The effort does require some time invested during the research and solution development stage of partner program development, but the result is a partner network that is willing and able to move more quickly both in the short and long term. It also creates partners who will truly collaborate with you on design and execution.
The end result is an Agile Channel that can achieve faster, more sustainable and more profitable growth.