Managing Partner Relations
B Raghavendran, Head, Partner Organization, Cisco India and SAARC
The business of IT is all about relationships and requires vendors and their channel partners to work together to drive growth and profitability. The ties between manufacturers, suppliers and distributors are responsible for building products and delivering services that add value to customers. As the IT market transitions to new technologies, vendors must align with and invest in partners who share their business vision in order to sustain themselves in a constantly changing market place.
Mutually beneficial ties
Vendor - partner relationships are vital to the business interests of both parties. For most vendors, a large part of the revenue is delivered to customers through partners (value-added resellers (VARs), service providers and distributors). Partners represent the face of vendors to end-customers and strengthen vendor differentiation by adding applications, technology and/or services that address customer needs.
Partners increase vendor reach by selling, supporting and marketing technology across geographies, provide local market knowledge, offer support to address specific customer needs and improve customer satisfaction with vendors. Since they have deep and wide ranging customer relationships partners can take on financial and operational risks on behalf of the vendors. Partners have expertise in areas that vendors don’t (example vertical knowledge, best offers) and can advise customers on the best solution for transformational/ business change.
By working with vendors, partners get access to products that their customers want. They can attach technical and business-related services and move up the profitability curve based on the value they provide to the customers. Vendors also help drive sales through the partner community and create best practices, which have a multiplier effect on the partners’ ability to sell and increase customer satisfaction.
Strengthening partner relations
While there are different strategies that vendors can adopt to strengthen their relationships with partners, listed below are some things that have maximum impact.
- Recognizing the partner ecosystem and business needs
- Honing partner ability and training them to deal with competition in a healthy manner
- Enabling partners through relevant programs/initiatives that optimize sales and bring profitability
- Ensuring partner sustenance through relevant value-adds
- Encouraging active information sharing to promote long-term growth
Understanding what the partner’s business entails is extremely important for any vendor organization and is the first step to building long-lasting partner relationships. Knowing the intricacies of the partner business helps vendors relate to the challenges faced by partners and develop strategies to work around them.
Strategic initiatives developed keeping in mind the partner organizations’ interests, enables vendors to gain better positioning in the market against competition and brings about a sense of gratification for partners. As the market matures and partner needs evolve, vendors must engage with their partners to align business strategies with those of their own. Creating mutually beneficial strategies and coupling them with robust support helps strengthen business ties.
Providing partners with the required capabilities (pre-sales, demos, delivery methodologies and resources) to profitably sell solutions brings about high partner satisfaction. Working with partner operations teams to optimize workflow, engaging with partner sales teams to improve their effectiveness in selling, executing product and service launches jointly and helping partners to build their ecosystem where appropriate, creates constructive relationships that drive growth.
In order to build a solid base in the channel, organizations that employ a partner-driven route to market must focus on partner enablement. By helping partner teams develop new capabilities and expertise quickly so as to meet customer demands in an ever-changing market, vendors gain sustainable competitive advantage and become party to customers’ success.
In order to ensure loyalty within the partner community, bring about partner profitability, and drive partner mindshare away from competition, vendors must implement favourable channel programs. Since partner profitability contributes to the overall success of the vendor business, these programs must be designed for targeted partner business types, and value based offerings presented accordingly. While investing in new technology or designing new programs, vendors must obtain partner views to ensure strategic alignment.
While working with partners, vendors must develop a framework for rewards and allow partners to participate in multiple programs/promotions. Designing appropriate value incentive programs for example helps brings profit and increases margins around specific solutions for the partners. While short term initiatives for partners help boost sales, ongoing programs that promote long-term growth bring in richer dividends by way of partner loyalty and commitment. Loyal partners ultimately lead to satisfied customers.
While dealing with partners, vendors need to realize that their business goals might not wholly be their partners’ goals. Therefore it is important to give room for differences of opinion and work together to drive a common agenda of acceptance and understanding. This helps to create a healthy competitive environment. In order to ensure that partners build profitable businesses, vendors must hold discussions/conduct forums that will bring to the forefront, intricacies that otherwise go unnoticed.
Vendors through their diverse global operations enjoy an understanding of different environments and best-practices and must pass that knowledge on to partners to bring about better operational efficiencies. Information sharing is important and vendors must keep partners in the loop while making key changes to the business i.e. shifting go-to-market strategy, or reprioritizing business focus. This provides partners with the knowledge to design their go- to- customer programs.
On their part, partners recognize the vendors who put effort into communication and are happy if their vendors are ‘good listeners’ who shape their strategies based on partner feedback.
To ensure that partners address the needs of the customer and are aligned to the vendors’ business vision, a continuous evaluation of partner relationships is essential. As the market transitions to collaboration, virtualization of the data centre and cloud-based services, vendors must work in tandem with partners, share information and ideas, test different practices, understand partner needs/pain points and adopt an approach that matches mutual requirements.
In the end, vendors that lead technology transitions and have solid partner programs supporting that position can accelerate growth because partners look for programs that they believe will lead them into providing the ‘next big thing’ for customers.