Managing Sales channel relationships -Step 2. - Assessing of the current relationship

To be able to Assess Current Partner Relationship we need to set the right assessment framework. Partner assessment framework should take into consideration:?

1.????What do we want to achieve with the Partner (e.g., what are our Goals with the Partner)?

2.????Where is the Partner positioned compared to defined Levels of Business Relationship (e.g., What is our current partner state/level)?

3.????How do we close the gaps and achieve the Goals?

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What do we want to Achieve with the Partner?

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We need to start with definition of Goals for the partner. From those Goals we need to define Objectives (Ideally supported by KPIs). When we have Objectives supported by KPIs, we should track them regularly, measure improvements and implement needed actions e.g., Implement Strategy and Tactics.

GOALS

The Goal must clearly define where Channel owner is going with its Partner. It should be set up “Long term” and provide direction for both Channel owner and Partner teams. When setting up Goals following 3 components should always be used:

1.????The desired Business relationship,

2.????The Value for the Channel partner,

3.????The Value for the Channel owner.

The Goals should ideally be aligned with existing structure of Business Relationships Levels (Channel Program).

Based on specifics of the Business, some additional components for setting of Goal could be used, but the 3 mentioned above are crucial if You are trying to Build Sales Channel relationship.

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OBJECTIVES

Objectives are used to measure progress to Goals. Objectives should be SMART (Specific, Measurable, Attainable, Realistic and Time bound). It is extremely important to set up Objectives with clear Ownership and Accountability. The resources required should be defined and accessible. As with Goals, the following 3 classes of Objectives are necessary for supporting above mentioned components:

1.????Business development (Market reach increase),

2.????Revenue increase (Size of Business engagement increase),

3.????Relationship extension.

Any number of additional Objectives could be introduced based on specifics of the Business, but the above mentioned 3 should always be taken into consideration.?

Our purpose should always be to define desired relationship in a set of Goals, and establish measurable Objectives, Strategy and Tactics to help us track our progress.

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Where is the Partner positioned compared to defined Levels of Relationship?

Levels of Business relationship (Channel Program)?

Most of the Channel Owners already have an existing structure based on which they segment their existing Partners. Therefore, every Partner should be positioned within this segmentation system which will provide it the right environment and resources to develop. Segmentation and current levels are usually based on the Value that Partner can bring to the Business relationship. One of the suggested segmentations of Channel Partners could be the one proposed bellow:

As a definition of Business Relationship Level, a simple Matrix could be developed and used. Please note that this matrix could have more Levels and more criteria, and it all depends on the ?Business structure and complexity of Channel owner, so You must adapt it to Business specifics, but for the segmentation proposed above it could look something like this:

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In simple words, how do Partners work when they are at the beginning of the Value journey, e.g., at the bottom of the arrow?

1.????Reactive

2.????Transactional

3.????Product focused

4.????Individualistic

5.????Minimal planning

?and when they reach Maturity, e.g., at the top of the arrow?

1.????Initiating new Business

2.????Proactive relationship building

3.????Focused on Business Value

4.????Taking ownership and leadership

5.????Planning as a basis for every Business decision (Planning is Critical success factor)

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Assessing Baseline Relationship level

?To Assess baseline relationship, we need to investigate: Basis of Relationship, Partner decision criteria, Coverage and Sales behavior, but what is not obvious even though it might be defined in current Channel Programs is that we need to see how Partner Business model is aligned to Channel owner Business model taking into consideration influence on the customer. Therefore, We should evaluate following aspect of Business models:

1.????Delivery model and implications,

2.????Current relationships from Channel owner perspective,

3.????Current relationships from the Partner perspective.

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Measuring implications of different delivery models

Sample tool to define impact on different delivery models to Partnership with the idea of putting partner into the right segment or program (Example being Traditional IT Solutions delivery model transitioned to the Cloud Solutions delivery model):

You can use the simple table as the one proposed, but You can also put a weight factor to each aspect and score it at the end, if you get measurable result to put Partner in the right segment any tool design or number of Aspects is fine. Some Partners will be ready to be positioned to New Delivery models, but some should stay in the Traditional ones. If the corporate Strategy is to move completely from the existing Delivery models to new ones, like the one that would transition from Traditional It systems delivery to the Cloud, a separate project needs to be defined that will help existing partners transition based on their current state and implication that different delivery models have on their business.

?Current relationships from Channel owner perspective

?General cookbook to define current state of relationship does not exist, but a good idea is to create a picture based on criteria for Business Relationship levels defined in Partner program or similar existing guidelines (e.g., Revenue, Pipeline, number of Certificates) and then add set of Relationship based questions based on processes that interfere between Channel owner and Channel Partner. So, let’s define a sample tool with one sample question that can help us assess these relationships (please not the more questions You define and deeper into process You go the relationship will be better assessed):

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Processes Based Relationships:

You Can also examine Processes like:

1.????Level of Interest (Beside Share of Valet)

2.????Willingness to share Risk or Ideas

3.????Handling of Business Challenges, Issues or Opportunities

4.????PR, Referrals, Marketing and Social Activities

5.????People Development

6.????Information System Integration

?At the end You simply add points and evaluate Your relationship from various POVs that have relevance to Your interfering processes.

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Current relationships from the Partner perspective

In Partnership relationship it is always important to see the perspective of interfering processes from another side. It helps You understand why Channel Partner made some moves and what could the next Business move be. Therefore, this assessment is crucial.

You Can also examine Processes like Share of Valet compared to Share of Valet of other competing suppliers, or examine the impact of substituting another supplier by Your company etc.??

Therefore, after careful examination and grading of Current relationships from both sides, Partners are now ready to be positioned based on existing Business Relationship Levels and Business Relationship GOALS that we want to achieve. Having both criteria in mind a set of SMART Objectives need to be created.

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Closing the gaps and achieving the Goals

So now when we defined the Partner segment where our Partner is currently located based on Business Relationship levels which could be defined by Channel Program or similar existing guidelines and when we defined clear and Understandable GOALS and “SMART” Objectives to reach those Goals, we are ready for a Strategy and Tactics that will help us Close the gaps and achieve the Objectives. Since guidelines for creating strategy will be topic of our next articles, I would just like to point out some general definitions to help us work set a scene:?

1.????A?goal?is a broad primary outcome.

2.????A?strategy?is the approach you take to achieve a goal.

3.????An?objective?is a measurable step you take to achieve a strategy.

4.????A?tactic?is a tool you use in pursuing an objective associated with a strategy.

But the most important of all is Execution and tracking of Execution, so the process needs to be defined and implemented to track the Execution of Strategy.

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Summary

?To summarize the Assessing of the Current relationship part here are some Key points to be taken into consideration for a Channel owner:?

1.????Relationship is the platform on which Partners should build MUTUALLY rewarding business, therefore please try to get picture form both sides of the Business relationship,

2.????Channel owner needs to set up Measurable Objectives based on Goals and exiting structure of Relationship levels to know that relationship is developing and at which pace,

3.????The Objectives and existing Relationship levels should be accepted and agreed also from the Channel Partner side and the commitment to achieve them should be achieved.

?Next article will be on the step 3. of the channel relationship flow: “Creation of Value proposition framework.”

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