Question: Would you consider yourself a “President’s Club Paul” or a “Slow Grow Joe?”
A new study published by Avant Communications attempts to differentiate between these two types of channel companies. Put together with our colleagues at Channel Partners, and with some additional support from Hosting, Masergy, Navisite and Talari Networks, the 2018 Avant Cloud Channel Survey polls channel companies from a cross section of the channel about their customers, go-to-market strategies, deal sizes and more.
“A story of two different types of partners emerged from the data,” Avant concludes. Those with the most number of deals and the greatest confidence about the future are “leaning forward” toward growth, Avant says. Conversely, those with the fewest number of deals and the lowest expectations for growth are “leaning back” into stagnation.
Avant comes to this conclusion after analyzing more than 14,000 deals across a spectrum of companies representing different vendors. The company compared the growth rates and confidence levels across 51 different criteria, which yielded a clear picture of individual partner success.
Take vendor selection, for example. Those defined as “lean back” partners were far more likely to identify vendor-supplied “deal protection” as something important to them. Alternatively, “lean forward” partners were more likely to cite “overall responsiveness” as an important attribute. In everyday parlance, this boils down to the difference between “save me from harm” and “help me stand on my own.”
When asked which resources helped contribute to their success, lean-forward partners were more likely to say “competitive product information” and “sales training.” Lean-back partners, however, prized “case studies” and “product training” to a greater extent.
Similarly, lean-forward partners were more likely to focus on helping customers improve their competitiveness, while slower-growth partners were more likely to emphasize their ability to help reduce costs.
Lastly, after Avant crunched the data, it concluded that the biggest perceived differences in “seller value-add” between fast-growth and slow-growth partners were “unique IP” and “pre-sales consulting.” In other words, President’s Club Pauls are more likely to emphasize the unique things they and only they can do, while Slow Grow Joes are more likely to accentuate the run-of-the-mill things they provide, albeit offered in a superior way. —
While there is nothing wrong with positioning yourself as the “better” player in the market, it’s a heck of a lot harder to prove than demonstrating a unique selling proposition that no one else offers. Experts agree.
What all of this suggests is that there is a significant difference between partners based on their levels of competitiveness. Based on the Avant study, for example, as well as conversations with sales experts from the Technology Marketing Toolkit, Ulistic, Acumen Management Group, CharTec and Managed Sales Pros just to name a few, progressive partners invest more energy and dollars, on average, in the following areas:
- Intellectual property development
- Customer outcomes
- Business differentiation
That said, partners across the channel spectrum agree on several things. Whether fast- or slow-growth, partners all want their vendors of choice to be “channel-friendly.” (Duh.) They both appreciate vendor leads, believe in their ability to improve customer productivity, and see “vertical industry expertise” as a legitimate differentiator.
But their investments differ wildly. Robin Robins, author and CEO at the Technology Marketing Toolkit, a peer group, research and marketing support consultancy for thousands of MSPs, says there's no one metric that separates growing partners from stagnant ones. But there sure as hell is a corollary between those that spend consistently (and significantly as a percent of revenue) on marketing and success.
There’s also a significant corollary between success and the number of services that managed service providers (MSPs) and agents provide, says Avant. Again, refer back to the new Cloud Channel Survey.
Avant finds that the average number of services offered by channel partners is expected to increase from four in 2017 to six by 2019. Given the time it takes to bring on a new service, master its complexities and then sell it profitably to customers, this is a significant jump. But what about those that are not looking to add new services? They are at risk of losing customers, Avant concludes. Why? Because the more cloud services you offer, the more likely you are to build monthly recurring revenue (MRR) and satisfy both telecom and data customer needs.
To further cement this idea in the minds of channel partners, Avant has created something that it calls “The Channel Risk Score.” It’s a measure of the number of services a partner offers and the level of vulnerability it may have with a class of customers. If you’re not selling security services, in particular, you may be putting your customer relationships at risk, in other words.
Consider what Avant found from its analysis of the data:
Partners that sell cloud security services are overwhelmingly also selling data networks. But, only 45 percent of partners primarily selling data networks are also selling cloud security services. This creates a potential risk to data network sellers without cloud security portfolios (most of them!) because their customers will seek cloud security solutions from a vendor that also sells the same data networks.
While you may take umbrage at the premise, I’ve heard from traditional data resellers that customers’ No. 1 concern today is not network uptime, but cybersecurity instead.
What else jumps out from the study?
Here are some verbatims:
- The fastest growth in sales in the next two years is expected to come from SD-WAN, UCaaS and security.
- Those that sell a broader portfolio of cloud services are generating more revenue for traditional data network and voice services.
- If you’re primarily selling data networks or voice, there’s a target on your back.
Why? Think commoditization, specialization and disruption.
Your mileage will vary of course. But these data points are unmistakable directions that can put you on a more profitable path.