March 01, 2018
The classic role of marketing is to identify and nurture leads, and once they’re hot—once they’re identified as sales qualified leads—hand them off to the sales team for conversion. But when the company’s “sales team” is made up of myriad channel partners—hundreds or thousands of independent resellers that are essential revenue generators for the vendor—the process becomes much more complicated.
That relationship between vendor and reseller is evolving rapidly. Vendors are rethinking how resellers can be courted, incentivized, trained, and compensated. More importantly, vendors are no longer simply encouraging their partners to sell stuff. To enhance reseller loyalty and recruit more, they’re seeking ways to directly ensure resellers’ financial success.
“The future of channel marketing is about adding value to your partner before you extract value for yourself,” said Lauren Hintz, team manager of agency and sales partner acquisition with marketing automation company Hubspot.
The relationship between vendor and resellers is no longer limited to simple rebates or jointly funded marketing campaigns. Rather, it is being transformed by a focus on technology, engaging reseller training, and a push to directly enhance not only their partners’ business success but also the success of those partners’ own clients.
Hubspot relies on agencies as its reseller channel, incentivizing them to recommend Hubspot technology to their own customers. The company has created a Customer Hub that includes sales and marketing tools for agency partners, as well as a free CRM product for partners to use as a retargeting tool. In addition, it assigns to every agency partner two “Hubspotters,” consisting of an account manager to help the agency’s business development team acquire new customers via Hubspot, and a channel consultant to help the agency’s clients be more successful themselves with the platform.
“Internally, we call our value proposition the three Rs: to show ROI to clients based on our technology features; to allow them to Retain clients because of that proven ROI; and to help the agency increase Revenue by transitioning from a project-based business to retainer-based,” Hintz said.
An evolving revenue model
For agencies and other resellers, project work is an onerous reality, consisting of a $ 10,000 or $ 20,000 product sale or service contract here and there, followed by no repeat business. Vendors who promote ways for their partners to gain retainer income via retargeting that upsells, say, to content creation, blog and website optimization, design, and more—can elongate the agencies’ client engagements.
In addition, continuous, retainer-type compensation has become more common as vendors shifted from on-premise to cloud-based products, changing the way they make money and their interact with the channel. The altered revenue stream, due to software-as-a-service subscriptions, means both vendor and reseller can be assured of steadier revenue.
Vendors are showing their partners the way.
Dell EMC, which sells data storage, information security, and cloud computing services, also is focused on transforming the business models of its reseller partners. It offers the usual array of partner tiers and rebates based on generated revenue, but it goes well beyond that.
“We do offer market development funds and transactional programs, but it’s a little different with us,” said Cheryl Cook, SVP of global channel marketing at Dell EMC. “We also have a proposal-based program, where the partner submits a customized business plan and we provide an investment. The partner initiative might be the proposed launch of a telemarketing campaign, or identifying prospective customers … anything that’s highly relevant and tailored.”
Dell EMC also has launched a Marketing Campaign Center and Partner Academy, featuring tools and resources to help partners develop their own marketing campaigns. It includes content to drive awareness, and helps resellers with content syndication, social assets, and campaign playbooks, as well as marketing automation and CRM capabilities.
“We’re all participating in the same industry and marketing effort, and our partners are trying to meet demands,” said Cook, who in February was named a 2018 Channel Chief award winner by sales channel publication CRN. “Today, our channel partners are really looking at how to differentiate themselves, and we’re doing our best to make it happen.”
Learning produces earning
Training and education remains at the core of the vendor-reseller marketing relationship. The more channel partners know about the products they represent, sell, install, and service, the more satisfied their own customers will be. Among the newer educational trends is gamification, a means of promoting product learning through gaining levels and earning awards, points, and badges.
Tech giant Cisco relies on its channel partners to sell its telecommunications, networking, and other services and products. The company has developed its Cisco Rewards program for contributors to a social community, using a gamification platform from Bunchball. The program allows participants to win leaderboard points for participating and sharing their experiences and best practices.
“Large companies are competing with competitors, so they’re using gamification to encourage reseller loyalty to their brand,” said Lea Sorrentino, senior digital strategist with Bunchball. “To enhance education and engagement, players receive special offers or even transaction types of awards based on commissions for greater sales,”
Business communications technology company Avaya is experimenting with gamification with its Latin American resellers.
“We’re testing gamification for product enablement,” said John Colvin, head of global partner marketing with Avaya, which has more than 1,100 reseller partners in the U.S. alone. “I think that gamification, when used in the right way, can help a reseller—or the reseller’s customer—better understand a product by making it easier and more entertaining.”
Colvin doesn’t want to ignore any opportunity to communicate with his resellers. To that end, the company developed a mobile app that provides an information feed customized by the reseller. The app is based on Avaya’s Partner Marketing Central portal, filled with customizable content for its resellers.
Despite new technologies, partner education remains a priority at Avaya, in particular since partners who sell Avaya solutions also are the ones who manage the accounts. Product fluency and marketing savvy are key for Avaya channel partners.
“It’s one thing to buy a case of wine without pressing the flesh, but looking someone in the eye is all important when you’re buying a telephone system,” Colvin said.