How Channel Partners Can Maximize Vendor Resources (And Their Cash)
Companies who work with channel partners as a route to market typically provide programs and resources to all of their partners. Although the level of support may vary based on volume or value or other elements, there are certain expectations that partners bring to the table in terms of benefits.
Vendors might offer Market Development funds (MDF), a percentage of revenue that a partner can reinvest back into marketing and demand generation activities. Or, a partner might be supported by an “outside” rep, an inside rep, or an 800 number. Partners may receive help with demo units or with services technicians.
So, how can channel partners increase their chances of benefiting from these extra supports? We broke this down into five steps partners can take to get a greater share of your vendor’s resources.
Step 1: Know Your Value-Add, and How that Maps to Your Vendor’s Needs
The first step you need to take as a partner is to know what your differentiators are. Then, you can map your value-add to your vendor’s needs and gaps.
Whether you are one of a vendor’s 5, 500, or 5000 partners, you need to start with an honest analysis of what you bring to the table to understand your own leverage. What is your truly unique value proposition? What do you deliver that none of your partner peer group does or can? What exceptional resources, knowledge, or expertise do you have?
The more value you provide should translate to a greater share of vendor resources.
A few areas where you might stand out could include:
Vertical industry expertise, including industry recognition and rewards
Horizontal solution expertise
Ability to architect a full solution by including other complementary products and services
Specific customer relationships or account penetration
Step 2: Be Clear About What You’ve Delivered to Your Vendor
Your next step is to show your vendor what you’ve done for them throughout the course of your relationship, to prove yourself a consistent and respected partner.
A vendor is looking for a level of comfort - they want to be sure they will get a return on their investment on you, they'll get a return on that investment.
Some of these areas could be:
You brought leads to your vendor
You invited them into a sales cycle early
You’ve demonstrated cross-sell and up-sell capabilities
You’ve shown consistent growth
You’ve made investments in people, training, or other areas that will benefit the vendor
Step 3: Summarize Your Request and Joint Investments
If you are going to ask a vendor for money or other resources, they will want to ensure you have “skin in the game”. So, you should be prepared share the investments and resources you plan to bring to the table.
Some examples of what you might offer to fund or match:
How much of your own money will you be setting aside
Horizontal or Vertical expertise (e.g., speakers, content)
Step 4: Show the Vendor What They’ll Get if They Invest in You
The fourth step is to present the “What’s In It For Me (WIIFM)” from the vendor’s perspective. Here is when you answer what value the vendor gets if they decide to invest additional resources in you.
They are looking for a measurable return on investment - after all, they are making a decision to invest in you and your idea, as opposed to those of thousands of other partners or areas.
Your goals must be specific, and tied to actions and a timeframe. Potential measurable goals include:
We will increase revenue by 10% on this product over the course of this campaign
We will acquire 10 new customers in x time period
We will add services to 5% of our installed base during this campaign
We will increase our pipeline by 25% in three months
Step 5: Pull it All Together for the Vendor
The final step is to put a package together for your vendor in the form of a proposal, whether an unsolicited one or in response to a pre-set vendor framework to request investments.
This proposal should demonstrate the importance of this program, campaign, or pilot, and it should convey the importance to and support of your top executives. You should include the following eight sections:
Objective of the program (typically, incremental revenue)
Time period for the program
How you will manage (milestones, dates, owners)
What you will measure
What you are investing (time, people, money, data, etc.)
What you are asking the vendor to contribute
Expected ROI on the vendor’s investment
Now that you understand the formula and format, what could you ask for?
We have heard a lot of requests, from the unrealistic to the exciting, and everything in between. Our experience is that it’s most effective to put your proposal in the context of a pilot program since pilots are easier to swallow due to the time, risk, and exposure limitations.
Here are several ideas to get you thinking about what you could ask for to amp up your business to get your unfair advantage.
Ask for Business Development Funds (BDF)
While Marketing Development Funds are usually governed by a partner contract, BDF is typically use-case-based and normally not tied to a partner’s performance. Instead, these funds are tied to a proposal.
Knowing if your vendor has BDF, and what their guidelines are for asking for it is a good starting point. Don’t be discouraged if they don’t have a formal BDF program, as we have seen some partners get access to funding based on the merits of their unsolicited proposals. Funding could even come from a product team or other group outside of the vendor’s channel program framework.
Request Funding for a Demand Generation Campaign
This could be in any number of forms - breakfast meetings with customers, an industry-specific speaker series, sponsorship for a social media campaign, or a webinar series around specific topics.
Ask for a Vendor-Supported Blitz Day at their Facility
Blitz days have been effective in generating a lot of demand in a short time.
A blitz day is when a sales team gets together to make calls on a given topic all at the same time. We’ve seen this work best when both the partner and the vendor commit a few people to make the calls together, co-develop the call script, and make it fun and engaging with prizes for the most calls made, most meetings booked, or most sales closed.
Many vendors have inside sales teams that typically make outbound calls, and would be willing to carve off a morning or a day as well as offer up their venue for these campaigns.
Propose Exclusive Access to a Product, Geographic Territory, or Vertical Market
Vendors may be interested in working with a partner to create a targeted plan to close a coverage gap, especially when they have gaps in product adoption, no coverage in certain geographies, or under-penetrated vertical industries.
Request One of the Vendor’s Top Sales Reps for Your Account
There are bell curves of performance at every company, in every role. Can you make a case that you deserve their very best rep by using the steps outlined above?
Ask for a Product Champion
Vendors may fund sales, marketing, and/or technical champions to embed at your location as a convenient go-to on-site expert.
Request Additional Demo Products or Platforms
If you have adequate access to demonstration units, this isn’t for you. We have, however, heard of many cases where partners need additional demo devices or sandboxes.
Propose Extended Payment Terms
If you are bringing value to your vendor, but need more capital to invest in one of their new products, they may be willing to extend payment terms of be more flexible in terms of some financial terms.
Just as with everything else in life, if you don’t ask, you won’t get it. So put together your best proposal and go for it!