How Will You Grow Your IT Business?

Embracing the Principles of Enlightened Self-Interest in IT Vendor GTM Strategies

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What’s the definition of success for your IT business? Beyond a list of soft metrics and higher order outcomes, the basic definition is clear and obvious: sell more of your product to satisfied customers who recognize value and continue to pay you. That’s it.

The next obvious question is: how will you accomplish that outcome? According to the body of research that examines Go-To-Market strategies throughout the IT industry, the answer almost universally involves selling to / through / with channel partners of multiple models and roles to some degree (a little or a lot).

So now let’s do an exercise in logic: If your only objective is to sell more of your stuff to happy customers … and the way you conduct sales and support with customers is with channel partners … what is your true primary objective? Answer: To ensure that your channel partners have a high-quality experience that makes them want to sell your stuff and are capable of selling and supporting your stuff in volume.

That’s right: if you run a business that reaches its customer market via indirect partner routes, partner experience (PX) and partner profitability (P$) matter more to your success than other factors including customer experience (CX), product-market fit (PMF), product functionality, product pricing, roadmap, market share, etc. (So much blasphemy … on multiple levels.)

Now, before we all gather in a circle and do a group hug to celebrate the happy happy of partner relationships, let’s be clear on the fundamentals. I am not saying PMF and CX and all those elements do not matter. In fact, I will bluntly say that a lack of these elements in your GTM will be disqualifying … especially in a recurring revenue model. But these elements are the essence of “mandatory but not sufficient.”

I am also not saying every business at every stage of its development or maturity of the market they target must exclusively sell through channel partners. (I’m full of blasphemy today … but that’s not a casual comment; it's based on deep research and global proof cases that validate a multi-dimensional GTM strategy that includes channels and also direct and also marketplaces, etc. That’s a topic for a different article.)

Bottom line: IF your GTM has a material dependence on the performance of indirect channel partners, then your North Star has to be ensuring your partners are engaged and happy and capable. In short: if your partners succeed / profit / grow … so will you.

The channel folks in the room naturally agree with me because my thesis is built on the premise of vendors being good at selling through partner routes to market. But based on my experience with hundreds of vendors around the industry and the globe, as an industry we don’t embrace the implications of saying PX is the most important metric. That has to be fixed ... and that requires persuading decision makers above and beyond your channel program.

NOTE: Some shout-outs are in order for the underlying logic of my argument.

• First, a number of years ago I was fortunate to participate in a deep study of partner engagement, satisfaction, and loyalty in the IT channel. In that research we learned that outcomes matter more than inputs; specifically, partner success (PS) precedes partner loyalty and satisfaction. Contrary to established logic at the time, partner engagement and commitment and productivity do not come first; revenue and profit come first … and cause engagement and satisfaction. Takeaway: How will you cause your partners to be profitable? (Shoutout: Toni Clayton-Hine . Still connected at the brain.)
• Second, many researchers have explored the relationship between customer experience (CX) and employee experience (EX). But the breakthrough happened when we established the sequence that creates a cause-and-effect outcome: EX doesn’t matter more than CX, but EX matters before CX. In other words: happy / engaged employees are more effective at their jobs and will cause customers to have a good experience. Takeaway: This is the same logic that animates my contention that PX matters more & before EX or CX. (Shoutout: Tiffani Bova . Still a very good avatar of what I’d like to be when I grow up.)
• Third, product discounts in vendor channel programs (whether they are based on volume or specialization or new logos or whatever) are not the same as partner profitability. I learned this first-hand while working in the solution provider channel and was able to validate it as an industry-wide truth via 2 decades of partner profitability benchmarking plus more than three hundred individual consulting engagements with solution providers. But the world didn’t wake up to this truth until there was real research at industry-scale that verified a structural shift in business models that thrive in the IT channel. Takeaway: it’s not about the margin partners get on product transactions, it’s about the multiplier of additional products + services that are inevitably pulled along when a customer buys an IT product. (Shoutout: Jay McBain . Still the voice of channel wisdom I’m most likely to violently agree with.)

So, how do we convert this big idea into actual tactics we can implement? You will not be surprised when I say I have 9 specific ideas about exactly how to do it. For the sake of focus, I’m going to separate this topic into two articles. And then we'll follow up with details and specific actions. Today, I’m focused on defining the strategy. Next time, I’ll focus on the practical steps you can take to execute the strategy in the real world.

For now, I’d love to hear your thoughts on this topic. How do you ensure your partners have a great experience and make a ton of money?