Channel Partners 2020: What are the top 5 key challenges?

At the end of 2019, I had the privilege of discussing with colleagues what the top 5 key channel partner challenges for 2020 will be.I would like to thank everyone who took the time to discuss and share their experiences and point of views. 

So, here's my top 5 channel partner management challenges as we go into 2020.

DIGITAL REVOLUTION

As we enter a new decade, massive technological change continues to impact all sectors and changes the overall channel partner business model.

Indeed, most companies are conducting major digital transformation initiatives in order to stay competitive and improve their products, services, and customer experience. This means the use of Big Data coupled with hybrid/cloud solutions (PaaS/SaaS) is becoming a must-have for all C-Suite executive strategies. As @Melissa Di Donato puts it, ‘all companies are becoming digital!’.

From a vendor perspective, the move towards digital creates a shift in how to approach business and channel. Companies are pivoting their entire channel sales strategy from a Software-as-a-Service approach to a Value-as-a-Service one, in order to improve the customer experience and obtain more channel data on customer need/preference.

From a partner perspective, these changes also require quick adaptation. Partners need to have a clear understanding of what digital transformation means to their industry and how it will impact their business. Customers are becoming more powerful and demanding because they are gaining more knowledge. That means the sales approach has to also become more customer-centric rather than supplier-focused.

In 2020, digital transformation will continue to impact the way companies do business by making them reassess their whole strategies.

LEADER’S POWER AND LEVEL OF CONTROL

Channel management is complex, do not doubt it! You are not managing but partnering with businesses and teams that don't belong to your company. Once you have decided to work with an indirect channel, you have accepted losing a part of this control. Some will say that the tricky part begins here. I will tell you it’s the most exciting and interesting part.

An Accenture study shows that only 21% of B2B leaders admit to having control over their sales partners. Also, 84% of the same channel leaders admit they don’t have clear visibility into their partners' opportunity pipelines. 

Indeed, with the channel partners, the level of control is much lower than when you go direct. The challenges here are to quickly understand what the right level of channel control to implement should be. Given my experience, I’ve found that the best place to start is to develop relationship dynamics that initially include an equal amount of power (give and take) in order to build a strong business plan, positive energy, and trust between the channel partners.

My point: Relationship building is a 2-way street!

Wondering how to implement the right level of control? There are a few techniques that typically work well. To track performance and keep the right level of control, start by putting time into understanding (auditing) your partners' organization as a whole (vision, strategy, goals, organization, strengths, weaknesses, skills, industries, etc.) but mainly gain insights on customer's experience.

Building deep business reviews/plans with partners, especially at the start of each year is helpful. With these, you can discuss objectives, incentives, agree on action plans, needed support or budget requirements.

Software options also help with pipeline management and understanding/following-up on opportunities. If your company uses these systems for channel partner management, make sure channel partners are responsive to the tool. Make it easy for them and prove the added-value. It will result in a big win for everyone.

In 2020, the word “partner” will be at the center of the discussions between both parties. Each one will need to improve their communications flow, feedback, and support.

ACCELERATE EXPERTISE AND SERVICE LEVELS

With the onslaught of digital transformation, various challenges arise around the level of service and technical expertise. Companies want their partners to have the expertise to convey the full value of their solutions to customers. Add to that the change towards solution-based sales models and indirect sales networks are expected to bring new business opportunities faster, at a lower cost and with lower risk.

Given this, vendors’ primary objectives are now to empower channel partners in key areas like technical training, solutions/service training, and sales training. Partners need to become experts not just in products but also in the solutions/services.

From a partner perspective, what this means is a need to assess all internal skills and competencies within the company. Is the channel still efficient (aligned with its strategy)? Are internal teams trained enough to handle the onslaught of data coming from digital transformation AND current customers' challenges? What about SLAs?

Both parties at this stage need to assess gaps in experience/knowledge and implement support and training to prepare teams to shift towards solution-based thinking/sales. Getting a jump on this is a major edge for partners/vendors (competition) who continue to drive towards an outdated product expertise mindset.

In 2020, if companies want to have a major competitive advantage, some time needs to be spent on hiring the next talents and training the existing teams to answer to the shift in customer’s expectations.

INVOLVEMENT FROM CHANNEL PARTNERS

When it comes to partners, it's a real challenge for every single vendor to motivate partners to concentrate on their own solutions. Most of the partners have a wide solutions portfolio and will decide to prioritize specific ones based on ROI and the level of support from vendors. Sometimes the challenge is also on the partner side as they also have their own priorities which may not be aligned with the vendors’. Therefore, during the audit phase, it is crucial for both the client and vendor to come to a mutual understanding of expectations and priorities.

I’ve had great success in initiative implementation when there have been clear conversations around prioritization and communications planning. With my own channels, I recommend spending time on this point before implementing any team initiatives. I do this because teams most often fail to spend time on this step. All further actions without this might not be efficient due to a lack of a strong understanding of the unique complexities of the partners, their organizations, strategies, priorities and/or goals.

Motivation is another factor. Each partner has their own unique set of motivations to become a partner. It may be influenced by organizational size or the fact they are selling to multiple business segments (or only to enterprise) and want to diversify. Whatever the reason, the channel ‘value as a service’ solution must directly align with partner/customer level of interest (market demand) and revenue expectations. 

Focusing on these areas will allow the channel leader to understand their own organization’s performance and link that to what motivates their channel partners.

In 2020, make sure to understand and discuss respective strategies and visions and make sure they are aligned to guarantee maximum success from both sides.

CHANNEL PARTNER PROGRAM

This is definitely a big one. Channel Partner programs are a huge challenge going into 2020. Having worked on building these partnerships backbones myself, I can say that channel program is definitely the backbone of any partnership. To design such programs, there is a need to have a deep understanding of the following elements: the vendor strategy (solutions, organization…), the environment and the partner’s profile (expectations and needed support). As digital transformation, customer experience and value-as-a-service are changing the environment, the channel program needs to be reevaluated.

Within programs he typical partner profile is changing. In the last couple of years, many partners have been focusing heavily on adding emerging technologies (Cloud, AI) to their portfolio.

This is true especially for resellers who were strong in selling hardware solutions to the final customer but not concentrating on customer experience. 

Today, it’s not about vendors hiring great partners but the other way around. The demand is mainly coming from vendors who are trying to hire the best partners in their markets. This is why creating, implementing and executing a successful channel partner program has never been so important. 

In 2020, new programs need to help resellers and other partner types with moving towards a more service-oriented approach. The channel program keeps being a great tool to keep performing partners and attract new ones!

TOP 5 CHALLENGES OF 2020 RECAP

This is the perfect time for companies to differentiate and reevaluate channel business models through their channel program with a major focus on ‘Value-as-a-service’ approaches. 

Here are my 5 key challenge takeaways

1.  Digital transformation is becoming a huge player in successful channel partnership development. In 2020, the channel partner model, both on the vendor and partner side, will be challenged to upgrade and stay relevant against their competitors.
2. Leadership power and level of control. The rules of the partnerships have changed. Deep discussions should take place around a common vision, strategy, customer’s experience, value-as-a-service.
3. Expertise and service levels: As ‘value-as-a-service’ comes online, challenges around expertise and training is requiring a special focus... Leaders who map out the new channel strategy against their skills gap will adapt more easily to the upcoming challenges.
4. Channel Partner involvement: With change comes communications difficulties. A 2020 challenge will be understanding the partner’s key priorities and making sure they align with their vendors.
5. Channel program: This remains an essential part of any partnership. However, the business model is changing and therefore, channel programs also need to be redesigned to keep performing partners and attract new ones.

So, what do you think of the challenges above? Do you see any others that may come true in 2020t? If you want to talk about it, you know where to find me. Do not hesitate to comment below and share.