Are You a Cow, Dog, Star or Problem Child?
Here's a look...
We all know the BCG matrix with Cash Cow, Dogs, Stars, and Problem Children — but how does that play out in reality? How should vendors cater their partner programs to each of these product groups?
Here’s a look…
Cash Cows are product lines that have high market share in a slow growth industry, they basically sell themselves, think Microsoft Office. Partners are comfortable selling these products and are confident in their performance. Partners who don’t have a high growth strategy in their own companies may be perfectly content to continue selling these products without looking for other somewhat risky product acquisitions.
These products require minimal demand generation assistance. While a partner wants materials letting end-users know they are a Platinum/Gold/Professional/Uber-Certified Reseller, customers know enough about the product that major partner-driven campaigns don’t need to be launched. Incentives should focus on volume rebates and maybe a cross sell rebate of one of the lesser products because again, Cows sell themselves.
Stars have high market share in a fast growing industry. Think of that shiny new object that everyone is talking about and standing in line to get, like an iPhone. For a partner to take on a new product line they need to see a positive ROI, but Stars tend to be an easy addition.
To keep Stars growing, partners need a decent amount of support. Materials ‘To’ the partner, quickly ramping them up on how to better position, sell, and implement the products as well as materials ‘Through’ partners to use for demand generation to end-users. Incentives should be aggressive and upfront around net new customers and Deal Registration is a must.
Ah, the Problem Child (also known as the Question Mark), lower market share in a high growth industry. Burning money to gain market share, will they become a shining Star or are they going to end up a Dog? Partners play a huge role for a vendor with these products in gaining market share.
Partners need more demand generation support above and beyond mailings or banners for their site. Field Marketing assistance, sales and technical support are a must as partners struggle to push the Problem Child to Star status. Incentives should be very aggressive and focused on multiple types of upfront discounts and promotions. Much attention should be given to the Problem Child in hopes that, like a real child, they will try to impress and subsequently, flourish.
And finally the Dog. Generally breaking even, Dogs have enough market share to offset the cost of their production though a partner won’t be influenced to sell it unless they’ve already built it into their offerings.
Margins must be large, incentives must be great and demand generation must be, well, it must be done FOR the partner. In other words, Dogs are most likely better left alone when it comes to your channel.
The important thing for vendors to realize is that though an overall partner program (tiers, training, requirements) needs to be straight forward without a lot of changes, partners that sell different products need different tools and incentives based upon the product line itself.
How are your programs different by product? What have you found works or doesn’t work well?
Contributing blogger Heather K. Margolis, the Channel Maven, has led channel programs for major IT companies. She also has extensive lead generation and marketing experience. Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center.