If Content is Still King, Data is Heir to the Throne

Content marketing is becoming a primary strategy to solve the challenges of massively scaling and diversifying marketing channels. But content does not naturally support both scale and diversity at the same time. The only thing that scales as endlessly and cost effectively as the digital world is data. As a result, data marketing is on the rise and will ultimately inherent the throne as the core strategy for modern marketing. What is data marketing? It’s using interactive data to directly influence or add value to your prospects, customers, and partners. Think of it as content marketing without the editorial. Data marketing is already fueling the rapid growth of content marketing. The best pieces of content marketing are typically wrapped around a compelling piece of (static) data. The key is that stripped of editorial, data must become interactive and not only deliver personalized insights but capture and bring user input back. 
Modern business solutions are increasingly deployed in the cloud on SaaS platforms that capture every transaction of every user. SaaS vendors are finding huge value in these datasets. They provide empirical evidence of best practice, efficacy, and cost effectiveness. Marketing and sales automation vendors can show their customers and prospects what types of campaigns result in the greatest lead generation, the highest value and velocity through the pipeline and the greatest return. They can tell them what type of social media content and cadence is most effective on which social media channels. This insight represents enormous value-add over and above the operational efficiency the systems provide.
Consider the power of this model applied to channel marketing. A SaaS platform for channel enablement can offer partners a single point of access to content repositories, transaction systems, execution environments, (inbound and outbound marketing, sales process tools) and social networks. If it’s constructed properly it provides a place for partners to get work done, not just a library to read about how to get stuff done. For smaller partners that lack infrastructure and staffing resources this is an invaluable resource. As they use the platform it captures:
  • Engagement – who’s downloading what how often from the platform
  • Transactions – deal registration, order submission, billing update, MDF reconciliation.
  • Execution– the number of leads their marketing has produced, how leads are progressing through their pipeline
  • Social interactions – groups they join, how they participate, what SMEs they interact with.
  • Performance data – closed deals, order value

Access to this data can be offered from the platform through the development of a few simple forms and reports. The more data partners provide, the greater the level of analysis and insight they get in return. This information can be used to identify best practices of the top performers and shared (in aggregate) with other partners to help them run their businesses, resulting in better overall performance of all partners.
By utilizing pure data as collateral, companies can deliver highly targeted proprietary insights at scale much more efficiently than they can with content. While the role of content will in no way diminish, companies that master the art of data marketing will have greater levels of engagement, retention, and revenue with all their key constituents than those that rely exclusively on content marketing. 

Using Data as a Service for Scalable Channel Enablement

The magic ingredient for successful channel enablement at scale is data. Imagine having the financial, operational, and behavioral data you need on partners to optimize new product launches, coverage models, and channel programs. Imagine being able to show partners — no matter how new or small or niche their focus — how other partners like them have achieved high return on investment (ROI) on their business with you. IDC’s Channel Enablement Maturity Model provides a stage-by-stage guide for advancing the organizational, process, technology, and data infrastructure necessary to transform your channel marketing and sales enablement operations. The journey along IDC’s Channel Enablement Maturity Model is one of evolving from a publishing/transactional framework to a process-driven one.

IDC’s Channel Enablement Maturity Model – Summary View
Stage 1:
Ad Hoc
Stage 2: Opportunistic
Stage 3: Repeatable
Stage 4: Managed
Stage 5:
Optimized for Scale
Key characteristic
“Every product for itself”
“Portals grow like weeds”
“Consolidation but still stuck in publishing mode”
“Central control over process-driven approach”
“It’s all about analytics (Data as a Service)”

Source: IDC 2013

The DNA for Success is in the Data 
IDC defines channel enablement as “developing the right competencies in the right partners to deliver the right solutions to the most profitable customers.” Ultimately, the goal is to provide a scalable model to identify high ROI best practices and propagate them throughout the partner population at a very granular level. There are three ways in which manufacturers can capture the partner data needed to support the analysis:

  • Contractual obligation: Requires significant time and effort from partner account management, is limited to the largest partners, and is periodic at best. 
  • Operationalized data capture: The partner platform should be thought of as a SaaS offering that provides a wide range of functionality but also collects data on every partner interaction. The ideal platform will consolidate all of the interactions with partners by offering personalized access to content and transactional systems, as well as execution platforms for marketing, sales, and support. By virtue of this consolidation, it captures an increasingly large portion of partner interactions and thus provides a great deal of valuable data to inform channel marketing and management. 
  • Data as a service: Externalize partner performance data and make it available to partners in a way that captures even more data from more partners. The level of detail they get depends on the level of detail they provide. As a result, they can get actionable insights on how to better manage their businesses and market, sell, and support specific solutions. The database is in a virtuous cycle of enrichment. They should be able to get insight into a wide variety of strategic and tactical questions such as: 
    • How many people do I need in marketing, sales, technical, and support roles? 
    • What level of skills and training should they have? 
    • What marketing activities are most effective? 
    • What sales methodologies and plays are most effective at what stage? 
    • What manufacturer resources and networks should staff be utilizing most frequently? 

While data is the crown jewel, there are significant people, process, and technology prerequisites for success. To find out more please see IDC’s Channel Enablement Maturity Model or contact me at gmurray (at) idc (dot) com.

Connectedness – The Missing Metric for Sales Enablement

Enablement programs for B2B sales and channel resources tend to focus on activities – trainings, certifications, portal visits, most popular assets, most posts per person, ratings, etc. These are all indicators suggesting enablement resources may have been consumed. But they don’t do a very good job of measuring one of the most important objectives of enablement – changing behavior. New platforms that integrate publishing, process, and social capabilities are making it possible to track behavior patterns in the context of specific business processes. Hidden in this data are the daily habits that differentiate our best direct and indirect sales resources. Sales enablement professionals need to find this data and share it with the rest of their sales audience.
This is a particularly crucial for the on-boarding process. Regardless of whether you’re training a new/replacement sales rep or bringing on a new partner and their employees, connectedness is a key metric that you need to capture and track. It is the only way to continually optimize behavior. You can capture financial and operational data with most of the content management, CRM, and marketing automation technology out there. But these systems are not explicitly designed to capture patterns of behavior. Even those with social networking capabilities are not being used effectively in this regard.

Sales enablement professionals need to use social networking as a basis for propagating best practices. The measurement should span not only person to person networking, but also track community membership, links to all manner of resources from internal portals, as well as communication with subject matter experts, peers and mentors. To be most effective, this capability should be deployed within a process driven platform for sales enablement, as opposed to an old school portal based on a publishing model. These new platforms go beyond simply providing access to content. They are process driven and deliver content, sales plays, transactional capabilities, and more all in the context of the company’s go to market strategy. In addition they have or are easily integrated with enterprise social networking capabilities which are crucial to facilitating and capturing how people interact with all the great resources they contain. 

There are two key dimensions the connectedness metrics should include – the number of connections to the right resources and the cadence of communication. For example:
  •          Which internal portals/systems do they log into – how often?
  •          Which SMEs do they interact with – how often?
  •          Which internal communities have they joined – how often do they visit and contribute?
This data can be invaluable in helping new reps and partners become more effective faster. What behaviors do our “A” reps and best partner reps exhibit? The intention is not to gratuitously boost hits and visits to marketing collateral, but to find the right level of connectedness for different types of reps. Being able to show other reps and partners that they can boost performance by making simple behavioral changes like subscribing to certain resources, joining communities they didn’t know existed, or increasing the frequency of communication is the path of least resistance to effectiveness.

Today many large high tech companies report it takes a year to get a sales rep fully up to speed with the pipeline needed to meet quota in the following year. Clearly there can be a lot of process, product, market, customer, competitive, etc. knowledge that needs to be transferred. But don’t neglect to transfer the behaviors that will help them  best utilize the resources the organization has offer.

For more information on IDC’s sales enablement research, please contact me: gmurray (at) idc (dot) com.

As the Channel Churns: The Battle for Routes to Market

High tech channels are restructuring due to the emergence and convergence of social, mobile, big data, and cloud based solutions. These forces are expected to cause a substantial churn in the channel. IDC predicts turnover of 25,000 to 50,000 infrastructure partners in North America by the end of 2013. This is a major wake up call for high tech channel marketers. Three years from now your channel community, the solutions they sell, and the most profitable routes to market will be very different than they are today. Vendors that see a net gain in channel capacity over this time frame will be the ones who diligently accomplish the following three objectives:

1. Redefine relationships: Vendors will need to be both more strategic and more tactical in support of their channel. The business planning process must incorporate strategic issues such as helping partners acquire new skills, building partner networks, funding acquisitions, and driving multi-vendor alliances into the channel.

At the tactical level, vendors need to help partners clearly understand how to best invest in their business. This requires compelling evidence of return on investment. For some partners the highest ROI will come from hiring more technical staff or achieving certifications. For others it may be hiring sales reps or doing more marketing. Partner engagement hangs in the balance and it is up to vendors to make the case for each and every partner.
2. Reposition programs: Channel marketers need to think of their marketing programs as solutions to partner business problems. Typically channel programs are marketed like products with the benefits presumed to be self-evident. Not so. Even the most elegantly packaged program offerings are not relevant to a partner until they understand what business objectives it is designed to achieve for them – Building awareness? Lead generation? Appointment setting? Customer loyalty/upsell? Vendors must reposition programs as solutions that are:
  • Tied directly to partners’ business goals 
  • Designed as sustainable campaigns – not short term marketing hits 
  • Easily linked to funding programs such as MDF, JDF, co-marketing, etc. 
  • Provide execution support through portal capabilities, concierge services, and references to approved marketing services firms
3. Reskill for analytics:Data analytics will be the differentiating factor for the winners and losers in the battle for channel capacity. This will require staffing up on business analysts and capturing better marketing and sales data from partners. Vendors whose products or business models provide end customer touch points such as SaaS or hardware provisioning have a big advantage in this regard. Competitors need to seriously think about how they can incorporate end customer touch points into their offerings. The importance of this cannot be overstated – it closes the loop on the lead qualification, distribution, nurturing and sales cycles enabling continuous improvement to be applied to all of those critical functions.
Not all go to market models in high tech support end customer touch points for vendors. With this in mind, some of the new ways vendors are attempting to get closer to the data include:

  • App level connectors between vendor partner relationship management (PRM) portals and partner CRM systems
  • Requiring campaign and lead performance reporting as part of funding approval processes
  • Enticing customer contact through SaaS, communities, incentive programs, etc.
Customers want their applications, infrastructure, platforms, and communications to work seamlessly with legacy solutions as well as with customers’ multi-screen environments. They expect rapid deployment, mobile readiness, low cost, high availability, flexibility, and return on investment. These requirements can only be met if vendors restructure their offerings and their channels to bring a widening set of specialized technology and expertise together into standardized offerings customers can trust. For more on the future of high tech channel marketing, see: Best Practices in Channel Marketing, IDC #234367, April 2012. 

Channel Marketing from a Sales and Marketing Perspective

Complexity and Diversity at Scale
Channel marketing in large high tech companies is one of the most complex and diverse operational activities in all of marketing. Complexity and diversity are pervasive across: market, product, program, even organizational structure. Channel Management groups typically report to either marketing or sales. The trend today favors the sales reporting approach, especially for regions outside of the US. The in-country channel manager will either be or report to the regional head of Sales. Channel Marketing typically sits within channel management or corporate marketing. In many companies the main function of the channel marketing team is to act as a conduit between business units/product management and worldwide channels. This creates an inherently complex organizational structure from which a wide range of additional sources of complexity and diversity must be managed.
The Sales Perspective
From a sales perspective, channel management is all about recruiting and performance – identifying key opportunities and the partners best suited to capitalize on them, and investing in their success. This typically involves working with key partners to develop business plans, including staffing, investment planning, and performance goals. However, it is rare that these business development plans include specific marketing plans developed in conjunction with the vendor’s channel marketing team.
This is a critical point of failure for many channel programs. Most partners do not have the marketing expertise needed to manage full scale, long term strategic branding and lead generation campaigns. Many do not even have marketing staff. As a result, much of the marketing effort focuses on discrete expenditures such as events – it is not managed as a coordinated set of campaigns optimized for a multi-channel, multi-touch, long sales cycle lead generation process.
The Marketing Perspective
From a marketing perspective, channel management is all about programs. Programs for recruitment, training, and of course, performance. Given the immense diversity in the channel it is impossible to offer a one-size-fits-all approach to channel marketing programs. But it is equally impossible to individually serve the needs of every partner.
The Partner Perspective
From a partner perspective, channel management is about of all things, consistency. It takes on average about a year for new partner programs to be fully adopted and implemented so changes must be highly rationalized and carefully rolled out by vendors.
Standardization and Specialization
Thus the need to find a balance between standardization and specialization. To find the right balance, specialization decisions have to be made first and the first specialization decisions that have to be made are about standards. The question is: what can we offer to every partner in each category and what opportunities/requirements are there for custom programs? This should be asked across a defined set of categories:
y Partner class: (Platinum, Gold, Silver, etc.): this one is obvious and universally addressed.
y Partner type: (Dev, VAR, ISV, SI, etc.) This one is also obvious but there is a lot of room for creativity. For example, do VARs get a special “turnkey” product offering that is not available to others?
y Region: This is an especially challenging area for channel marketers as there are real market differences in terms of culture, technology adoption/maturation, regulation, as well as language that make regional marketing more decentralized.
y Technical/Product focus: The need for specialization here is largely determined by the breadth of your offering portfolio. But companies with hundreds of solutions need to be especially careful not to overwhelm the partner community.
y Strategic alignment: Making changes to your market direction or product mix requires a huge commitment from the channel and they will require not only special programs but also special monitoring and guidance to ensure effective changes are made. Data is particularly important and additional incentives for feedback may be necessary.
y Partner potential: This is a two-fold problem – identifying the high potential partners and understanding the specific drivers of their business with your brand. Getting these research issues right is critical to moving the most valuable growth opportunities up the performance curve.
Standard marketing programs, campaign models, events, collateral and other go to market assets can be designed for each of these categories. Then specialized programs can be overlaid to facilitate coverage of partner capabilities relative to market opportunities.
It is important to understand that marketing programs for high tech sales must be highly leveraged over a wide range of media and market segments. They must be managed with a long term perspective. Most MDF, JDF, co-marketing approval processes focus on short term, discrete activities such as an event and are measured on 30 day or 60 day timelines. However, this is not an effective way to market complex solutions that require great education and deliberation on the part of the buyer.
IDC Recommends
To address this, IDC recommends that companies better coordinate their sales and marketing teams with respect to channels. Channel marketing should develop marketing plans as a normal part of the business planning and market development process. In addition, the partner community should be researched and assessed with the same depth and regularity applied to the markets they serve so any changes in business drivers can be quickly identified and incorporated into channel programs in the most appropriate way.

Making the Most of Channel Marketing

A recent IDC study of large IT companies found that, on average, channel revenue was $3.7 billion. The average internal channel marketing staff of 53 managed nearly 22,000 partners, equating to $12 million of revenue per internal staff but only half a million dollar per partner.
Most shocking from the study — these organizations have an average of approximately 15,000 inactive partners. Active partners only constitute 31% of the channel mix, with the remaining 69% being inactive. Given the expense involved in recruiting channel partners and on-boarding their first sales, it is in the vendor’s best interest to identify the best partners across the entire partner population and enable them to step-up to higher levels of sales performance.

Channel Marketing Service and Automation Solutions

The traditional method of assigning business development managers to the top 5% of partners, and others to groups of the second 15% of partners, is not scalable. The business development manager assignment is a fixed cost that requires 35%+ growth rates – and it is hard to predict the winners. As shown in the figure below, in a recent IDC study channel managers rated the effectiveness of BDMs and customized channel marketing programs statistically identical in terms of their effectiveness at producing ROI. Providing access to customized channel marketing to all partners – including the bottom 80% – amortizes costs over a larger revenue base Customized channel marketing enables the winners to self-select and payback is driven by collective success.
Most Effective Resources
Source: IDC, The Importance of Customized Channel Marketing, 2011. n=22
Customized channel marketing programs can reduce the complexity of marketing through partners by streamlining channel marketing processes and increasing vendor ability to reach more partners simultaneously. Redundancy can be eliminated, as distribution of messages, campaigns, programs and promotions become part of a menu of interchangeable, additive activities.
Using social network best practices, feedback from partners can be used to determine which activities work best from a partner perspective, and which activities need to be developed. This feedback is equally valuable for vendors and partners to see which customizable channel marketing activities are most effective. For the majority of channel partners, customized channel marketing programs offer much needed help in building their marketing plan.
The full report can be downloaded here.

Channel Marketing Automation – When CRM is not Enough

Whether you pursue a lead through direct sales or a partner it doesn’t really matter how you get the lead. But what happens next? With your direct sales, you track the nurturing process as the lead develops into an opportunity. You measure your sales reps by the number of meetings they get, the deals they close. You may even have a closed loop reporting process that shows the efficiency of your marketing and sales funnel.

With your partners, your lead gets passed off and … then what? Does the partner accept the lead? Do they follow up? Do their marketing outreach programs conform to your policies and expectations? How much time and how many touches does it take them to close? How do you decide which partner is qualified for which leads? How do you efficiently identify the productive partners, those that need encouragement and those that should be dropped?

Multi-Billion Dollar Channel Management Questions
These are critical questions that have a tremendous impact on businesses with significant indirect revenue. A recent IDC study of large IT companies found that on average channel revenue was $2.4B. It was generated by 34 channel marketing staff managing 8,500 active partners. That equates to $45 million of revenue per channel marketing staff member but only $1.2 million per partner. The dirty little secret – there are also on average approximately 19,000 inactive partners!

Source: IDC’s 2010 Best Practices Study in Channel Marketing (n=13)

A Better Way

Your CRM and SFA are not going to answer any of the critical channel management questions – although many companies think their CRM system is where they should be “managing partners”. In fact, a partner management system fulfills a role more like an SFA – it tracks all the activity that occurs after the lead is generated. It should also facilitate the process of lead distribution – managing all the partner credentials and accreditations need to qualify for a particular lead. Then there’s deal registration where the partners accept the lead so that it is not poached by another partner or … ahem … the direct sales force. And when you consider some of the other requirements of partner management, the CRM fallacy becomes clear:

  • Recruitment and on-boarding
  • Training and development
  • Business Planning and Reporting
  • Compensation and Incentive program management
  • Marketing and Sales support

Are these capabilities that your CRM can provide? Your SFA? Would you even want them to? The answers should be no, no, and no. Don’t be thrown off by that last bullet – the marketing and sales outreach your partners require is very different than the corporate outreach that marketing operations is doing. They rebrand, reschedule, embed, and otherwise repurpose marketing content, making a direct translation from corporate marketing to partner marketing wholly inappropriate.

If you have (or want to have) a significant amount of revenue going through the channel, you need a dedicated partner relationship management (PRM) system to automate more than just marketing and sales activities. Don’t look to your CRM, SFA, or even the newer marketing automation vendors to provide you with the full set of capabilities necessary to effectively manage channels. Those solutions are focused on a very different set of requirements. They may have slideware and inch deep functionality, but that’s typically it. Do ask about integrating a PRM with these systems as reporting should roll up easily across direct and indirect sales.

A number of key capabilities to consider when implementing a platform channel marketing automation:

  • Manage partner profiles and contacts
  • Deliver and track training, certifications, etc.
  • Set business rules for lead distribution
  • Handle deal registration
  • Provide a single system of record for partner and channel management
  • Provide detailed performance reporting (12-month rolling review)
  • Track partner outreach campaigns
  • Manage market development funds (MDF) and co-op spend

With these issues on the table, it should be clear that automating channel marketing requires a dedicated, purpose-built solution. It will be costly and painful and meet substantially lower expectations otherwise.