Fireside Chat Explores How to Keep the Channel Tuned In
Recent reports that the channel is dead have been greatly exaggerated. Yes, the rise of marketplaces and the continued march to a subscription-based economy are changing the “sell-through” function dramatically, but the channel still has great potential if teams build the right skills and strategy, according to two industry veterans currently at the helm of significant channel programs. Nellie Scott, CA-AM, senior manager of growth markets for North America alliances and channels at SAS, and Rob Spee, senior vice president of global channels and alliances at BeyondTrust, explored how to optimize what Scott called “the hardest role in the industry” in the latest ASAP Fireside Chat, “Channel Account Manager: The Most Important Role in Technology Partnerships.”
Giving Away the Farm: New Channel Practices Hunt for Entrepreneurial Thinkers
To successfully build or revitalize a channel program, it is important to understand the three stages of growth and hire appropriate executives for the stage in which your company finds itself. Brand-new or ad hoc channel programs at the first “awareness stage” are like startups in that they require versatile, well-rounded executives who are used to wearing many hats. But a common mistake heads of nascent channel divisions make is to hire channel account managers (CAMs) from Global 1,000 companies with a defined structure and established practices. These executives often struggle in a startup environment that usually offers little infrastructure and relies on unrefined processes. CAMs in these early-stage programs need to have an entrepreneurial mindset and marketing savvy, and be comfortable wearing many hats, according to Spee.
“Unfortunately, they bring in a farmer for a hunter position,” he quipped.
Building a foundation means instilling the ideal “channel culture,” which to Scott means “having that sales buy-in and buy-in from all the different stakeholders of a company. A vendor should have a common MBO (managed business objective) that reaches across all of the departments…[and] supports this indirect sales model.”
Spee added that hiring a leader who understands change management can greatly benefit a growing channel practice.
Mine! When Sales and Channels Battle for Credit, “Radical Candor” Is Required
Once the culture is established, the first channel partners are up and running, and customer wins are starting to come through the door, companies enter the second, “functional stage,” where policies are in place and the rest of the organization is starting to buy in to the channel vision. Both Scott and Spee agreed that conflict between the channel and direct sales teams often arises in this stage, as both fight for credit for securing new wins and new procedures potentially run at cross-purposes.
“As soon as people see channel partners start to bring in some substantial deals, all of a sudden the sales organization goes, ‘Mine!’ There’s that conflict [around], ‘Who got to them first? Who owns the customer? Was it the result of a webinar we did?’” Scott explained.
Spee added that the need for consistency and structure in the program at this stage results in new obstacles for some parties. He gave the example of the sales team moaning about new restrictions on granting discounts to prospective customers.
Scott noted that this is where CAMs must be proficient at influencing partners and salespeople without authority to bridge differences, a process that Spee said involved “radical candor,” which is “super blunt but caring, having that empathy with the person. You really care about [that salesperson’s] success.”
Convergence of Channels and Alliances Roles? For Experts Only
Finally, as the channel becomes a “well-oiled machine” in the “expert stage,” Spee urged CAMs to apply an advanced business acumen to their duties, which entails understanding where market opportunities are coming from, making long-term projections for revenue and resources, and deemphasizing partner recruiting and onboarding in favor of joint business planning and other activities that will help drive high performance. It is in this stage where it is most evident that the skills to be a next-generation CAM are looking more and more like those required to run strategic alliances.
Spee and Scott echoed sentiments recently voiced by Canalys industry analyst Jay McBain that CAMs are going to have to sharpen skills before and after the sale.
“We’re expanding our partner ecosystem to think about all of the influencers that lead up to that purchase, and then all of the people that can execute and drive customer success after that initial purchase,” said Spee. “That requires a very different partner set. We are adding in systems integrators, global systems integrators, managed service providers—a whole new suite of partnerships—but you need channel managers who understand how to have different conversations with those types of partners.”
Spee later listed product demos, proofs of concept, and implementation as other areas where CAMs need to recruit new allies.
Don’t Leave Specialized Partners on the Margins
Scott noted that CAMs will have to get intimately familiar with vertical industries, overall tech industry trends, and their partners’ business models, in addition to their own, in order to supply the vision for the program and adjust channel strategy to changing market conditions.
“It’s not enough anymore to just manage a partner program, [and] manage rebates and SPIFs,” she said. “CAMs have to be business advisors. They have to have such a high level of understanding of finances.”
In this new landscape, CAMs will need to recognize partners that bolster the channel program in more ways than simply bringing sales leads.
“[Some] partners are highly specialized. They’re never going to bring us new opportunities, but they’re going to be our sales influencers. They’re going to be the partners that help close these lucrative, multimillion-dollar deals because of their specialization,” said Scott. “If you just look at the margin on the product, that’s one thing, but if you open up a P&L—and this is why I think a CAM’s business and financial knowledge is so important—you have to walk the partner through all of the other adjacent services, whether it’s consulting services, managed services, or anything else. When you add all of that up, the potential upside for a partner is much greater than the margin on the product.”
This recap only scratches the surface of the wealth of insights Scott and Spee delivered in this Fireside Chat. ASAP members, head to the ASAP Content Hub and watch the recording of this conversation to find out why Spee merged the channel and alliance teams at BeyondTrust and created a new partner success manager position.