Volume vs Value? How are you Investing in Partner Success?
Posted: 1/11/2013 by Norma Watenpaugh
Training, Certification and Specialization
How do these investments pay-off? Is volume or value more important in developing your partner strategy? Do you reward and recommend partners based on the volume of goods and services they sell? Or do you recognize those that provide the most value to your customers? Is having more partners extending your footprint and brand more beneficial than having fewer higher value partners?
Whichever model you may have adopted, we are definitely seeing a trend indicating that companies are shifting their partnering strategy toward one of more value versus one that only recognizes volume. This is expressing itself in a number of ways. Mainly that companies are viewing the value of the partner from the customer’s perspective. Companies recognize that their partner communities are extensions of their brand and footprint in the market. If your partners are not experienced and competent to represent your message and your products and solutions, what does that mean for your business? Training and certifications have been traditional program benefits to meet this need and companies typically have minimum requirements for partners to achieve in these areas in order to become authorized to represent the company brand and products. However, the new shift is to organize benefits and incentives around recognized expertise versus around just volume of product sold or influenced.
This clearly changes the game. By recognizing expertise and partner investment in building competencies, the focus of the game becomes more centered around value with lesser emphasis on volume. A value focus enables partners to differentiate themselves by investing in those training, certifications and specializations that will set them apart and make them more attractive to prospective customers. It also shifts the game on the pricing world, where partners who have the most expertise (and made the most investments), now have the pricing advantage versus the volume pushers. Those higher margins enable partners to reinvest in building their expertise, creating a virtuous circle based on value.
Companies are also moving their tiering programs away from recognizing advancement solely on volume. Volume may still remain a part of the equation, but much more weight is now being given to partners who have achieved excellence in targeted technology specializations or market segmentations. This approach enables companies to incent partners to invest in the future and reward them for training and certifying their staff on emerging technologies, thus making a forward investment that anticipates changes in workforce skill sets i.e. invest in Cloud specializations. Customer references are also making an appearance in the new advancement model, again enabling companies to recognize and reward excellence from the perspective of customers.
In my past experience, we did some analysis on which partners were growing fastest and what made them different? The fastest growing partners were investing in training!
So this focus on building value based on expertise has a very powerful and beneficial end game. Partners who are invested in building expertise are:
•More differentiated and able to attract customers
•Provide a better customer experience
•Protect and enhance your brand
•More profitable and able to invest
•More aligned to drive emerging technologies for future growth
•Grow faster and ultimately drive more volume for you
So what is the impact of this shift from volume to value? Does it mean that companies no longer care about ramping up revenue through their partners? Not at all! It just means that companies are realizing that volume AND value both play a critical role to the success of running a channel organization. So watch the trends and review what balance makes sense for your company when it comes to incenting value and volume.