How do Vendors Pick Partners for Hot Leads? The 5 Factors They Weigh
Partners often ask us about the secret sauce it takes to become a top channel partner. How do they become the one who gets the lion’s share of the resources? And, most importantly, how do they become the one who gets first shot at the hot leads?
Besides the obvious revenue that is widely used as a metric, there are other key characteristics suppliers look for when deciding where to allocate their best partner business managers, business development funds, and hot opportunities.
Why is it important to be considered a preferred partner?
Every supplier has limited resources: people, time, and money.
By showing up at the top of their list, you’ll get more of these resources, which can help you reach your goals. Top partners can ask for the supplier’s best channel reps to be assigned to them, which can make a huge difference. Or, they can ask for hot leads, another key that can make a big impact.
Achieving this echelon also gives the partner the right to ask for specific investments, such as demo products, payment terms, marketing funding, or other items that will accelerate growth and revenue. This also means that the vendor is co-investing with the partner, saving them precious resources and cash.
Vendors want to put their resources where they’ll get the biggest return.
When they have a lead, they want to give that to a partner they trust will fulfill it accurately and professionally, leaving the customer satisfied. So what lenses do they use to evaluate partners?
Here are the five most common considerations that we’ve seen used over the years.
Factor #1: What is the Management Culture like at the Partner?
The risk profile of the partner leadership team is a key indicator of the partner’s willingness to adapt and grow. Before a supplier invests in a partner, they want to understand their management philosophy.
Is the partner a “lifestyle” partner? This is someone who is content with the status quo. They’ve achieved impressive revenue and growth over the years, and are satisfied with how the business is going. They see no reason to adopt new technologies that will require big investments, or change processes significantly.
While there is much to admire in the success of this type of partner, a supplier may not rush to invest in them.
Why? Because typically, these partners will continue their growth trajectory with or without additional attention or funding from a supplier. The partner would gladly accept any resources the supplier provides them; but from the supplier’s point of view, they may not see a big ROI on that resource investment.
So who are vendors looking to invest more in? Partners who express interest in growing, evolving, and innovating.
These partners will more likely benefit from additional investments, and are more likely to be aligned to the supplier’s new investment areas. By nature, they will more rapidly adopt new technologies, look for new value to deliver to customers, and be more willing to try new strategies and approaches.
Factor #2: What Vertical Industry Expertise Does the Partner Have?
We’ve seen partners check every single box when asked what vertical industry they specialize in. But, suppliers know it is a rare partner who is truly a master of multiple industries.
So, no matter what boxes are checked, the supplier needs to know who truly can represent them when they come across customers in different vertical markets. Saying you are an expert in manufacturing is one thing. Proving you can hold your own with a manufacturing customer is another.
There are benefits from the partner’s point of view for becoming an industry expert in select fields as well. As Illumiti’s CEO, Nir Orbach, told Small Business Trends, this tight focus “gives us the ability to build our credentials and offer business expertise and domain knowledge so that when we talk to people in those industries we’ll be able to offer as much value as possible.”
Factor #3: Does the Partner Have Reference Accounts?
A sure way for a partner to prove they have expertise in a particular vertical is to point to customers they’ve already worked with. This shows their capabilities in implementing projects and satisfying customers.
Ideally, some of these customers have also agreed to be references, offering to write a testimonial, record a video, or to speak privately or publicly with other potential clients.
The value of a reference is that a prospect is hearing from a similar customer with similar needs, and customers always appreciate hearing from other customers more than from a sales person. It’s especially compelling when a customer shares their experiences and the benefits they realized from the solution, including time saved, revenue increased, or other key metrics.
When a supplier considers where to place their best, they want to know the partner they choose has customer satisfaction high on their values list. The worst thing for a vendor to do is refer a customer or a lead to a partner that doesn’t care about the customer as much as they do. After all, the partner is a representative of the vendor, and they want to protect their reputation by knowing they can rely on this partner to deliver a delightful experience.
Knowing a partner has a deep installed base with satisfied customers gives the supplier cold comfort they can trust their customer to this partner.
Factor #4: Can the Partner Create Their Own Demand?
Generating demand is a key sales foundation, and we’ve often heard both partners and suppliers tell us that they feel like they own 100% of demand generation.
Whether that statement is true or not, partners cannot afford for vendors to believe they are simply sitting back and waiting for leads to drop into their lap. There has to be a sense of shared ownership to drive demand for new customers, new products, new technologies, or upselling or cross selling into the installed base.
Vendors understand they own much of responsibility in this area, but they also expect partners to step up and acknowledge this is a shared function. This doesn’t necessarily mean that the partner has to pony up 50% of funds, but partner contributions should be significant, and “in kind”. These can take the form of a coveted highly primed prospect list, technical resources, or industry expertise.
The bottom line is that vendors are looking for partners who recognize their responsibility in building true net-new demand.
Factor #5: Has the Partner Been Loyal?
Creating and nurturing a lead or opportunity is a long and expensive process. The supplier must have the confidence that the partner they bring to the dance will not leave them for another vendor.
We all know customers and partners have choices as they put together their solutions; but when a supplier provides a lead and provides support in the form of sales, support, demo equipment, pricing, etc., there is an expectation that the partner will quote their product and stick with their solution.
It would be an egregious breach of trust to substitute another supplier with a similar solution for a lower price or more margin. The upside in margin that this one sale could generate will never be able to overcome the downside of building the reputation that you cannot be trusted. Just as in any partnership, trust is the foundation of the partner/supplier relationship.
What other lenses have you seen vendors use in evaluating partners? Let us know in the comments below.