Traditional partner recruitment most often consists of offering up a platter of cookies: economic incentives, pre-qualified leads, or extensive sales and readiness. But there are fundamental flaws with this approach to recruitment.
The conventional wisdom for partner recruitment is focused on rewards
First, you're recruiting partners who are already the most susceptible to bribery, including bribery from your competition. Additionally, you're not ensuring your recruited partner is able to build a sustainable business with you – after 1-2 successful sales, that partner may simply fade away. And finally, if your recruited partner only sells when you hand them qualified leads or a significant incentive, you're running a very expensive proposition.
Truly effective partner recruitment is strategic
Instead of focusing on rewards, you should evaluate and improve your value proposition, target the right partners, and consider your audience in order to have a truly effective partner recruitment strategy.
Build an effective value proposition. Partners are looking to build profitable businesses, but the incentives you offer aren't the biggest factor in their partnership. Three aspects — momentum, relationship, and economics —determine your success in recruiting effective partners. You must understand exactly where you stand against your competition in each of these aspects, and position your offering to win.
Target the right partners. Are you using a floodlight approach, where you're looking for breadth? Or are you searching for a specific partner profile with the spotlight approach? Or are you using the laser approach to focus in on one specific partner?
Consider your audience. Different members of the partner's leadership team will have differing priorities, and you will need to customize your value proposition accordingly. A CEO may care more about momentum and economics than the relationship with the vendor, while a VP in the sales team is looking for the right fit.
Momentum is the most important aspect of your value proposition
If your solution is dead in the water, you will be unable offer enough incentives to recruit successful partners. You must have market share, customer demand, or technology leadership — all facets of momentum — in order to succeed with partners.
Market share Are you the market leader? Does your product own the market?
Customer demand Is there buzz for your product? Do customers ask for it?
Technology leadership Is your product innovative? Does your product represent cutting-edge technology?
The dominant position of market ownership is enviable, but not always possible. If your solution does not own the market, you'll need to focus on building demand or focusing on innovation. Neutralize market share, and tell partners they need to buy the best technology. Or increase your marketing spend, and create buzz around your product.
Ask yourself where your strength lies relative to your competition. Where can you win the momentum battle? Where can you adjust your value prop?
If momentum is equal, your relationship will determine partner investment
The relationship portion of your value prop is all about offering a worthwhile partnership. You should look at the business fit, your own reputation, and your partner’s first-hand experience.
Business fit Does the partner have the focus, skills and capabilities required?
Vendor reputation Do you have a reputation for taking big deals direct? Are partners the default way to go-to-market?
First-hand experience Are you easy to do business with? How satisfied are your partners with you?
You can’t impose your solution on a partner when their business is not the right fit. If you’re looking to recruit a new partner, make the case that your solution is a natural extension of their current focus. If your reputation in the channel is hurting, you may need to make a bold move — like HP CEO Meg Whitman’s February statement that the company will no longer tolerate field reps taking business away from HP’s partners. Similarly, if a partner has been burned by you in the past, you will need to take real steps to repair that fractured relationship.
To strengthen your value prop, you may need to do some introspection and identify the weaknesses in your relationship with the channel. What bold, assertive actions you can take to change them?
When momentum and relationship don’t distinguish your solution, partners look to the economics
Focusing exclusively on economics is the easiest way to derail your partner recruitment efforts. Asking a partner if they would sell more with if an incentive, their answer will always be: "Of course!" And why not? Who wouldn’t want more money?
Partner profitability How do your product margins compare? Are there lucrative up-sell opportunities?
Participation costs Are on-boarding costs significant? Are there significant costs to maintain status?
Partner benefits Is there status to your program? Do your benefits materially improve how partners conduct business?
Partners will look at the profitability, cost and benefits of selling your solution. If your competition can offer high margins that you can't match, you'll need to offer a lower cost of participation or a more compelling set of benefits.
When leveraging incentives you should reward actions a partner would not normally take. For example, an incentives lead at a major software company was fond of saying that offering incentives for something a partner was going to do anyway wasn't a way to reward behavior — it was a way to create an entitlement program.
To create your strongest value prop, you need to have compelling economic reasons for partners to invest. Determine the behavior you want from your ideal partner. What economic levers do you need to pull to make that behavior happen?
Use these three categories to assess your partner recruitment
Knowing your value prop is one thing, but being able to do quantitative analysis is pivotal. If you're relying on anecdotes or gut instinct to assess your position in each category, you will naturally go off-course. Use hard data to evaluate your strengths and weaknesses against your competitors and then adjust your value prop accordingly. We’ll explore how to target partners and how to customize your value prop for your audience in later posts, but to build a partner channel comprised of brand practice partners that are loyal to you, and will to develop as you do, you need to maximize your momentum, relationships and economic value.
Richard Flynn is a recognized leader in channels and go-to-market business strategy and execution. A Founding Partner and Chief Marketing Officer for The Spur Group, Richard has over 25 years of go-to-market experience in sales transformation, channel management, and customer marketing.