Channel Partner Study PDAgroup
Channel Partner Study PDAgroup
Table of Contents
1 Executive Summary 1
Introduction 1
Research Methodology 1
2 Strategy 2
Strategic Alignment 2
Customer Involvement & Retention 2
3 Risk 3
4 Marketing 4
5 Sales 6
6 Solution Strategy 9
7 Consulting 11
Customer Satisfaction 11
Project Management 11
8 Human Resources 13
Employer Branding 13
Resource Planning 13
Employee Retention 14
Training Plans 14
9 PDAgroup 15
About Us 15
Partner Analysis 16
Channel Partner Study - Success in the Indirect Sales Channel 1
Executive Summary
1.1 Introduction
Strategy
65% sued a strategy that was aligned with the goals of the channel orga-
nization. While this issue may appear innocuous, a lack of strategic
coordination between a channel partner and the channel organization
of partners do not align can have serious consequences for both sides. One significant conse-
their strategy to the channel quence is that partners in the channel often end up competing directly
organization’s strategy with one another, reducing both their own profit margins and the mar-
ket share of the channel organization. To avoid such issues, individual
strategy meetings between the partner account managers from the
channel organization and the channel partners need to occur on a
regular basis. With open communication on sales targets, marketing
tactics and target markets, the indirect channel business can ensure a
higher degree of market penetration and channel partners can ensure
that they maintain a strong, sustainable bottom line.
Risk
31% the regular review of their market approach and the risks that chang-
ing market conditions pose. If these conditions and their impact on
the channel partner business model are not reviewed regularly, chan-
of channel partners do not nel partners risk becoming irrelevant in light of disruptive changes.
regularly review and adapt their Especially technological developments like cloud computing, mobile
market approach solutions or the internet of things require companies to adapt their
business models and adopt a different market approach.
Marketing
60%
to attract customers. The situation is no different for channel organiza-
tions, except that they rely either directly or indirectly on their channel
partners to ensure that their brand receives attention. Unfortunately,
channel partners often lack the knowledge and skills necessary to ef-
of channel partners do not fectively promote the products or services that they provide. The re-
measure the effectiveness of sults of the Partner Analysis demonstrate the relevance of this issue.
their website to generate leads
While 60% of channel partners maintain a website, the effectiveness
of the websites in generating leads is not measured. With regard to
social media, most partners maintain a presence on a couple of plat-
forms, but 48% of the partners interviewed revealed that their content
is fixed and that no regular updates occur. In order to generate leads
that feed into the sales pipeline, channel partners’ online marketing
activities need to be interactive and content needs to be frequently
updated so that they can be considered as a thought leader.
37% that some partners are also quite small and specialized, channel orga-
nizations need to consider that partners may not have the personnel
available in order to take on new marketing tasks or learn the skills
of channel partners do not necessary to complete these tasks. Among the channel partners that
have employees specifically participated in the Partner Analysis, 37% did not have any employee
dedicated to marketing specifically designated to do marketing. To ensure that partners have
the skills to conduct effective marketing activities, channel organiza-
tions should strongly consider providing trainings on relevant issues.
Support for channel partners need not be limited to active assistance
though; a very effective support mechanism is to provide a content
platform containing materials and templates that partners can use to
optimize their websites or create content for their social media sites.
37%
marketing is effective and of a high quality. Another 37% of chan-
nel partners that participated in the Partner Analysis noted that while
the channel organization’s marketing contact was known to them, no
meetings or joint marketing activities took place. Direct contact and
of channel partners do not meet guidance on real projects is an extremely effective way to transmit
or align with the marketing expert knowledge of all types; channel organizations should guard
contact of the channel against the temptation to leave partners on their own for these activi-
organization ties.
Sales
61% of the channel partners that took part in the Partner Analysis
noted that they achieved only minor successes in acquiring new con-
tracts and that, as a result, their pipeline coverage is inadequate. One
61% significant contributing factor is a lack of soft skills; if sales personnel
do not have the skills necessary to develop relationships with new cli-
ents, then the sales force will be forced to rely on existing customers.
of channel partners face While this can be lucrative in the short-run, such a mindset is rarely
problems in acquiring new sustainable.
customers
24% of partners noted that they are only sometimes successful at
qualifying opportunities, resulting in insufficient closing rates. Pipeline
coverage and poor opportunity qualification can be particularly frus-
trating for the management of channel organizations as these issues
24% can lead to sales results that contrast strongly with analysts’ fore-
casts. A typical fix for this problem is to offer a sales training to partner
sales staff on how to classify opportunities and fill the sales pipeline.
However, channel organizations need to make sure that the content of
of channel partners have
the sales training includes the KPIs being monitored by analysts. Ac-
insufficient closing rates
cording to the American Society for Training and Development (ASTD)
without on-the-job reinforcement, 87% of training insights are already
lost 1 month after attending a training. In order to ensure that chan-
nel partners’ sales personnel are really using this investment, channel
organizations should provide individual coaching following the train-
ing. Coaching can be done on-site or online, but it provides practical
individual guidance on how to implement the information learned from
the training.
Once a new prospect has been generated and a sales cycle is under-
way, sales personnel need to pay close attention to the needs that
the potential client expresses. In order to facilitate this activity, many
businesses maintain a feedback collection and evaluation process.
38%
Around 38% of channel partners reported that feedback is requested
at only irregular intervals and that this is done in the absence of stan-
dardized criteria or an analysis strategy. Without a regular analysis
of such information, it is extremely difficult for partners to implement
of chnanel partners do not necessary changes in their sales cycle and to train sales employees
regularly conduct win/loss to behave differently.
analyses or collect customer
feedback to improve sales Smaller partners in particular tend not to be aware of how to change
their sales approach even if they have a problem. Accordingly, about
35% of partners expressed an inability to use customer feedback and
their industry knowledge in order to take advantage of upselling op-
portunities. While the criteria for an upselling process had been de-
35% fined, the sales force was not able to make practical use of this pro-
cess on a regular basis. In order to avoid losing this potential revenue,
channel organizations should consider providing support to partners
of chnanel partners do not to help them develop the underlying processes necessary to support
feedback to engage upselling For many partners, the ability of the sales force to use feedback for
opportunities upselling purposes hinges on their customer relationship manage-
ment (CRM) strategy and how well they use their CRM software tool.
If a CRM strategy with explicit guidelines has not been defined, then
sales personnel record their data in disparate ways and upselling op-
portunities are lost as a result of poor communication. In such cases,
channel organizations can provide some assistance in creating a com-
munication strategy for small partners to help them avoid letting deals
fall through the cracks.
46% efits of the purchase were, but were not able to attach these benefits
to solid, measurable facts. Furthermore, personnel had difficulties in
positioning the business case within the sales cycle. Knowing when
of channel partners were not to introduce a business case is a difficult task, but even more difficult
able to communicate their is providing a quantitative measure of the benefits that a product will
solution’s benefit using a solid, bring. In order to do this, sales personnel need to be able to under-
measurable fact stand the business models at work within the prospect’s own organi-
zation.
Solution Strategy
Only 12% of the IT businesses in the Partner Analysis said that they
do not use demos at all, indicating that the overwhelming majority
use demos in their sales cycles to various degrees. One way chan-
nel organizations can support their partners is to provide them with a
range of basic demos, which partners can then tailor to fit their needs.
However, even the best demos need to be tailored to fit the target au-
dience, and channel partners need to be trained in how to use demos
effectively in their sales cycles. Providing trainings on how to tailor
demos to a target audience and use them to optimize their impact on
the purchasing decisions of prospects will be of significant benefit to
both the channel organization and the channel partners.
Consulting
With such a process in place, channel partners can even use custom-
er satisfaction as a quantifiable KPI in their project management ac-
tivities. While 23% of the channel partners evaluated formally include
customer satisfaction as a KPI already, they also noted that this KPI is
rarely measured. To ensure that customer satisfaction data is evalu-
ated according to a unified standard, channel organizations should
provide a series of templates for channel partners to use in evaluating
their projects.
For 82% of the IT partners who took part in the Partner Analysis, most
or all projects were completed within the stipulated time and budget-
ary constraints. However, project marketing within the projects pre-
sented a challenge: 39% of channel partners noted that their project
teams attempted only on occasion to get in contact with employ-
ees on the customer side to tell them about changes to solutions.
Although active project marketing is sometimes considered a minor
point in project management, overlooking the communication of im-
portant changes can easily result in a solution that fails to deliver what
the customer wants.
One way that channel organizations can promote good project man-
agement is to provide channel partners with a list of best practices
that they can use as a checklist for evaluating their own projects.
Human Resources
40%
ployer was well understood on the human resources market and that
this appeal was used occasionally for recruitment purposes. While
having a good reputation is great place to start, companies need to
actively communicate the benefits of the workplace they provide to
of channel partners do not
the labor market in order to make sure they acquire the best talents.
persistently use employer
Given the fierce competition for skilled personnel, organizations can
branding to differentiate from
not afford to lose any resources to competing companies. For channel
other employers
partners in smaller countries, the supply of eligible candidates can be
slim even in the best of times; channel partners should make use of
social media platforms and job fairs at local universities to increase
their exposure and position themselves as attractive employers.
33%
evaluated in the Partner Analysis reported that while HR demand plan-
ning takes place on a regular basis, these processes are also informal.
As a result, the person making the decision on whether to hire a new
employee may not have all the details regarding what skills the re-
of channel partners do
quired person should have. This could lead to the steady accrual of
ad-hoc recruiting without
a knowledge deficit within the company that impacts the company’s
strategic demand planning
overall performance.
29% are not tempted to leave. 29% of partners noted that while measures
are taken to identify and motivate employees, these actions were ad-
hoc in nature. In all but the most exceptional cases, incentives should
of channel partners mainly use be provided according to a standardized scheme that is understood
ad-hoc incentives to motivate by all employees; if employees are not aware that they will be reward-
employees ed for exceptional contributions, then it is quite possible that they will
settle for providing a lower level of effort in their daily activities. The
second measure that channel partners should take is to actively sup-
port the sharing of critical industry and product knowledge among
employees. In addition to thoroughly documenting this knowledge,
channel partners can facilitate the active exchange of information
by creating mentoring programs for more experienced employees to
mentor younger employees for a specific amount of time each week.
Implementing such measures will help to ensure that critical knowl-
edge is maintained within the workforce and expertise is gained over
time.
PDAgroup
9.1 About Us
Martin van Wyk An analysis report summarizes the core results for the channel partner
Managing Director and recommends actions. Channel organisations will receive a com-
Westrocon (Pty) Limited
prehensive dashboard to understand where their partners have the
biggest challenges. This helps them to set up appropriate programs
to support their partners through training, coaching or other activities
to increase the channel’s effectiveness.
Get a holistic view of your channel to Identify common skills gaps and understand
identify common skills gaps how they influence different business areas
Get an overview of your channel’s per- Use the overview of strengths, weaknesses
formance and a benchmark to compare and opportunities as a basis for competitive
it with other channels differentiation and growth
[email protected] | www.pdagroup.net