In all my years in the channel, I have often wondered, “Why is it a constant challenge for vendors to put partners first?”
Regardless of what side of the channel you’re on, we’ve all heard and experienced the stories of channel conflict. Vendor executives not always leading with their partners, and the high cost of the fallout when partners walk away because of a vendor’s channel behavior.
Channel partners have long memories, and it’s wise for new and old vendors not to be inconsistent with their channel partners or play silly games over a few points of margin, show impatience while closing a deal, or whatever the issue of the day happens to be.
In today’s world, the social media backlash will make repairing your reputation that much harder. As a recent example, look at the United Airlines debacle that went viral and diminished the company’s already-rickety reputation. The company's value dropped by a billion dollars, and long-time allegiances were tarnished if not lost.
Smart vendors--large and small--have gotten their channel religion early on. These are the companies that have gone on to succeed because they have genuine policies and rules to help create more focus and go-to-market policies between direct sales and channel partners.
Are We Getting It Right?
At SAP, we’ve taken a long hard look at our history with the channel and have taken a strategic approach we call “Partners First.” It’s not an empty slogan; it’s a vital business decision where we acknowledge that partners are critical to achieving our business goals and that we must do everything we can to ensure mutual success. I am not saying at SAP we do everything perfectly, but we’ve learned a lot and developed a partner-preferred approach that I believe other vendors could learn from.
This approach includes clear policies and market segmentation for partners who are focused on the massive small and midsize enterprise (SME) market. We want partners to be able to engage in SME markets with unprecedented support from us, but without out interference from SAP.
Here are three primary tenants that any good channel vendor should follow. These are all part of SAP’s Partners First approach:
Clear Channel Policy. Make sure your partners and direct sales force know the rules. Spell out what you will do to safeguard market segments, products and partner leads. SAP has a tough channel policy that penalizes direct sales employees with termination for serious infractions. Include your channel policy with your partner onboarding package, make it easy to access at all times, and notify partners of any changes to it.
Partner Code of Conduct. Partners who go rogue can be cause for concern, and create a negative swing effect on your brand and stock price. The code of conduct document should outline exactly what you expect of partners in terms of doing business. Enforce it just as you enforce rules for your direct sales force.
- Go-to-Market Segmentation. It’s not enough to capriciously tell partners that they share the SME market with your direct sales force without clearly defining what this will mean for them. While it’s a huge opportunity for both, it’s smart to show your partners exactly how you segment the market by revenue, company size and products/solutions as applicable. It helps avoid conflict and maximizes efficiency and results from the start.
I would really like to hear from you. Are we doing it right? And, what about your other vendors? Of course there’s more to channel policy than these three things, but you get the gist. What else should vendors set forth to make intentions clear? How else can SAP put partners first?
Ira Simon (follow me on Twitter @IraASimon) is global vice president, Partner & SME Marketing, at SAP. Learn more about partnership opportunities at: http://go.sap.com/partner.html
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