No doubt you have been seeing several vendors make the switch to the new standard for channel partner ecosystem building. Here is my latest interview on HP’s new channel partner playbook.
Most vendors will eventually transition into this better way of building a vibrant and sustainable channel community.
Keep in mind that many of its components are still evolving and many factors can affect success, but here are five things that vendors should know about the new channel partner game:
- All types of players in the channel must be recognized for the role that each contributes to the overall success of the ecosystem. They should also be rewarded accordingly. The synergy generated by all contributors is the lifeblood of the community. As more vendors come to this fundamental realization, they too will need to recognize, support and reward all parties instead of just the usual transaction channel partners. Influencing the sale and retaining the customer is just as important as closing the deal! In spirit, this is what new channel community is all about.
- To further support the growth of the entire partner community, several leading vendors have already built a marketplace where buyers can find third-party add-on solutions to solve their specific problems (as well as a suitable local partner to implement). Vendors may need to plug into these marketplaces for buyers to find them. That said, buyers will still use Google search, social networks and news media to find what they need. [About 6 years ago, we built a micro marketplace specifically for VARs and MSPs to find whatever they needed to run their businesses. We went beyond just posting a directory because they needed more than just a list of vendors. They needed an unbiased independent proper recommendation. After completing a detailed request form and based on many criteria, we would recommend the right solution. If they needed more help, they could complete a comprehensive business assessment or speak to an actual business consultant. We also baked in a feedback response so each user could rate the solution that they implemented and their experience. We continue to bake out the MSPOfficeSuite marketplace and it’s FREE]
- No vendor or partner can rely solely on any one marketplace for their success, but this could be a great equalizer to give every company an equal opportunity. If you are not the owner of the marketplace, then you need to be aware that some of these marketplaces may come with a hefty toll for third-party vendors and partners to pay. Some marketplace owners take a whopping 30% of sales and even so, the end-buyers may not be disclosed to the seller. It’s a perpetual pay-to-play revenue-share imposed by the marketplace owner. Some marketplace owners have already decided not to share any revenues generated from their branded applications with their partners, explaining that partners should make all of their money downstream from customization services, implementation and support. Channel partners will also face challenges for visibility as the volume of partners increase so vendors will need to have a fair and transparent policy. We will see how marketplace owners play in the channel as they become more dominant.
- As the market continues to shift towards a “Cloud-Everywhere” model, expect a lot of new independent vendors and niche marketplaces to pop up! Watch out for the ultimate game-changing day in the channel when any MSP can easily plug in any SaaS vendor that they choose into their own private labeled marketplace that includes real-time provisioning, automated billing and management! This new dynamic will shift more of the power back to the channel partner. Some Cloud solution distributors are already proving this case as they aggregate multiple SaaS vendors. Vendors should be planning for this eventuality and channel partners should be looking to become an early adopter.
- It’s not just about simply getting rid of the traditional channel playbook of Bronze, Silver, Gold, Platinum, Diamond (whereby the partner discounts or kickbacks are based on volume purchases or desired behavior) as some of that still applies for both SaaS and hardware. Unfortunately, devices are so low-margin that everyone does not think twice to repair or replace. Hardware also complicates the capital versus operation cost in pure managed services models (Although, some companies are working on better Hardware-as-a-Service programs). The hardware model is simply difficult for most channel partners to promote, sell and make a profit. As such, many channel partners no longer care about selling widgets or any specific brand. Packing more monthly recurring revenue on top of devices is the new standard that everyone will have to embrace. Adding more downstream revenue opportunities is the golden goose for the channel. Whatever you are selling should allow for MRR solutions to be layered on.
I talk a lot about marketplaces in channel community building because this is going to be a very critical pit stop of the new buyers journey and therefore a key driver for generating sales demand well into the future. Both vendors and channel partners will need to play well in this “sandbox” so a good time to start dipping your toes is probably now.
On top of this, we have already hyper-jumped into a digital-first World where the delivery of content, products and services have mostly gone online. Most vendors already know that they must bake the virtual factor into their game as this will probably be the norm right through 2021 and will most likely dominate in the future. Skill up fast and furious if you want to ride in front of the wave.
What are all of the other components for building the “digital-first” channel partner community? Feel free to comment, like or share…
Join is at our next virtual event on September 23 to talk channel building!
