I'm feeding the feed

Two posts from http://mimasummit2.blogspot.com/ caught my eye. I’m going to respond to both at the same time. Here are the posts….

Topic #1: Keynote presenter, Ze Frank says, “You have a paradigm shift coming around. There is so much that happens as soon as you release anything — you get all this feedback…you get unexpected usage patterns, you get requests for new things, you get crises.” So, whose job is it to respond to all of these feedback, and how should they go about doing it?Topic #2: Speaker Leah Buley asks, “What’s the process for creative brainstorming at your company? Who gets involved with creative exploration, and how do they do it?

• Business Week article – “Beyond Blogs” – http://www.businessweek.com/print/magazine/content/08_22/b4086044617865.htm

• Virtual Karma blog – list of Web 2.0 applications – dated 2006, but comprehensive, check out comments too – http://www.virtualkarma.blogspot.com/2006/01/complete-list-of-web-20-applications.html

• CNN Money article – Executive’s Guide to Web 2.0 – http://money.cnn.com/2008/03/19/technology/web2.0_goofing.fortune/index.htm

• Branding Tactics by Chris Brogan (note: “Passports”) – http://www.chrisbrogan.com/100-personal-branding-tactics-using-social-media/

• Subscribe to Chris Brogan’s blog on community and social media – www.chrisbrogan.com

• What is Scrum? – check out http://www.methodsandtools.com/archive/archive.php?id=18

“We have a good reputation. Other ERP and CRM vendors want us to sell their products,” said Kania. “But by staying loyal to the Sage family, we receive a high percentage of new leads, lots of help when we need it in the sales process, and healthy margins.”

A trusted and loyal relationship is the holy grail for every channel marketing manager.

Yet, vendors/VAR relationships are wrought with distrust. Inevitably, there is conflict between the direct and the indirect sales force. Trust is difficult to establish, especially when the vendor’s executives don’t completely understand the value VARs or distributors bring to the table.

Lee Levitt, now a sales productivity analyst at IDC, (http://www.idc-slb.com) has designed, built and managed channel programs at three different companies and has built and managed strategic partnerships at several more.
Levitt suggests everyone in the channel recognize a simple fact: companies enter the channel to pursue business that is too small or too difficult to reach with a direct sale.

“In most cases, what you have are resellers with an existing book of business who generate between 10% and 30% of their total revenue from the sale of third party products while the rest of the revenue comes from services. So most VARs are loathe to risk the relationship because they own the only throat that gets choked. If a vendor’s tech support doesn’t live up to expectations, the VAR has to fix it. That is why the reseller moves a lot more slowly than the vendor. They want to reduce risk for themselves and for their customer. The vendor’s timetable is generally not the reseller or the customer’s timetable.”

Levitt says the keys to trusted channel relationships are common business interests, a clear identification of the overlap or conflict, a clear definition of roles/responsibilities and investment requirements for both sides, and a well developed action plan to move forward on.

For Norm Dumbroff, CEO of WAV, Inc., (www.wavonline.com) a value-added distributor of wireless, security, RFID, VoIP and portable data-collection products, tapping into common business interests is the number one way his organization builds trust between vendors and VARs.

“Vendors recognize that solution providers are delivering multi-vendor solutions. VARs know they can’t get multi-vendor support from a single vendor. That’s our sweet spot. Certainly we ship boxes but at the end of the day we do the things that both sides can’t do – we sell and support multi-vendor solutions.” said Dumbroff.

Overlap and conflict are a fact of life. Yet in a trusted relationship, it is important to not buy into the idea that the partner is a competitor, said Dumbroff.

“The true value occurs in the channel when there is quid pro quo between the vendor and the VAR. For example, a good VAR understands that simply providing excellent services implementing the software solution is less important to the vendor than the ability to create demand. After all, the vendor sales person is compensated based on the success of the VAR,” said Dumbroff. If you think you are competing with your vendor partner, get out of the relationship because it is already dysfunctional. That’s no way to build trust. In our position as a value-added distributor, helping both the vendor and VAR win builds trust and profitability.”

When discussing trust in the channel, it may be that the root cause of the tension is a chicken or the egg dilemma in so much as each side is waiting for the other side to fully commit to the relationship. Once someone makes the first move, trust is easier to achieve.

“If you value the relationship with the vendor, if the relationship is important to you, you’ve got the make the first move and demonstrate your commitment;” said Rick Toth, EVP for Pepperweed Consulting (www.pepperweed.com). “There are a lot of great VARs all trying to partner with the leading technology providers. To get noticed, you need to carry the ball in sight of the vendor so they can see how much value you add to the relationship.”

Pepperweed is an INC500 provider of ITIL, ITSM, and ISO 20000 consulting and implementation of complex, large-scale, global IT deployments for HP (2007 US BTO Partner of the Year), CA and distributors such as Arrow.
For Toth, building trust means treating vendors as customers. Toth believes clear definition of roles and responsibilities are an essential part of strong relationships.

“No matter who they are, and no matter how mature their channel organization, we look at our vendors as customers. We address them with a business plan and we work to understand them, their motivation and their drivers, and which behaviors they are trying to incent,” said Toth. “The sooner we get the vendor involved in the plan and the sooner we work together to make it real, the sooner we both see success.”

Ray Green, Managing Director for Focus Data Services (http://www.focusgroup.uk.com), seconds the idea of making the first move. “The simple answer is that you don’t give your partner any reason to distrust you. If you’re open and honest, give as well as take; are loyal, then, slowly, trust builds. The actions are louder than the words. You start to believe that the people in your partner’s organization are on your side as well as their own. And the sum of the two organizations is greater than the individual parts. More importantly, the sum of your business is greater,” said Green.

At information security VAR Anchor Technologies (http://www.anchortechnologies.com), CTO Peter Dietrich says: “our partnerships with vendors span all size organizations from the massive Cisco and EMC to smaller companies like HighTower and Tripwire. Each vendor seems to implement their channel a little different. The bottom line for us is the relationship. The vendor that has a good product, local presence, makes face-to-face contact regularly and truly recognizes that their channel reps are important are the most successful with us.”

Dietrich says his vendor relationships share three common components. First, the vendor has to have a vetted and quality product. Second, the vendor has to be willing to provide some real technical training and demo or NFR product for free or at an insignificant cost. Finally and most importantly, the vendor needs to have a “channel rep that wants to build a relationship with the VAR sales staff. Without this relationship the other pieces do not matter and the relationship will not bear fruit,” said Dietrich.

Jim McManus, VP Channels and Alliances for Dataupia (http://www.dataupia.com) emphasizes open communications as a foundation of a trusted vendor/VAR relationship. “I always ensure that partners are an integral part of the business conversation and process and keep all communication above board, including conversations with potential partner competition. While we believe in open communication as a way to establish trust, we also recognize the value of putting in place programs that compensate partners for representing our company. At the end of the day, partnerships must be financially beneficial for both organizations. Follow through on customer initiatives in a joint manner is critical to the success of partnerships between vendors, VARs and distributors. I have seen a lot of people give lip service, but actions speak volumes.”

Software-Link’s Stan Kania sums it up nicely: “In any relationship, trust is earned by taking chances and communicating openly and honestly. We treat Sage as part of our business and Sage treats us as part of their business. We share sales forecasts, keep them up to date on sales and marketing efforts and vice versa. That’s what makes the phone ring.”

Ben Bradley is managing director of the Bradley Wiltjer Marketing Group (www.bwmginc.com). He writes about the intersection of technology and business. His primary interests include the role of marketing and engagement in the channel, innovation, entrepreneurship, collaboration, networks and groupware. He can be reached at benbradley@bwmginc.com.

You’ll see fear of switching from the evil they know (their existing VAR) to your business. You’ll see the natural doubt any buyer has against a new (and untested) sales person. You’ll see uncertainty from the misinformation your competitors use to cloud the buyer’s mind and get a foot in the door. Spend enough time inside your prospective customer’s brain and you’ll see that FUD is the direct result of not having enough information to make an informed buying decision.

So how do you overcome the FUD? How do you remove FUD from the transaction? We spoke to VARs and buyers of IT services about these questions and we’re delighted by the overwhelming response we received.

According to Tiffani Bova, Research Director at Gartner (www.gartner.com), Worldwide IT Channel Sales, Programs & Alliances, “one way to remove the FUD factor in the sales process is showing prospects that you understand their business better than your competition, have done similar work for other companies like theirs, use the technologies internally yourself, and build a strong reputation around ’service after the sale’. These activities go a long way especially in the SMB space.”

Michael Davis, CEO of Chicago-based Savid Technologies (www.savidtech.com), removes FUD by offering a pilot program for all projects. “If it doesn’t work, we will take it out and charge them nothing. This forces us to test products internally before we sell them, that’s why we don’t have 500 products partners. They don’t all work and we only want to sell what will work.”

But FUD also exists beyond the sales call. Any new engagement has elements of FUD in installation, integration, support and service. Towner Blackstock, software services manager for CIS Consulting (www.cisinfo.com), a Charlotte, North Carolina VAR of Sage Software, reduces installation and integration FUD by emphasizing the importance of training. “Classroom instruction is essential to a successful implementation and rapid ROI. When clients neglect training on new software, frustration builds, confidence lags, and they spend more money on onsite support,” said Blackstock.

Blackstock also believes operations software can’t succeed without good hardware and networks. “That’s why we started our own IT group that specializes in software installation. This eliminates a lot of finger-pointing between vendors and allows our application consultants to focus on implementation. Even if a client doesn’t purchase our hardware, we have the in-house expertise to troubleshoot system issues.”

In the support role, having someone who is always available can minimize problems. Although it seems overly simple, Savid’s Michael Davis provides clients a contact list containing complete contact information for all employees. “Everyone in our company understands they must be available to all clients whenever they need them. All of our clients understand that not only are we available to them whenever they need, but we have an open door policy. You don’t like the way something is heading/running, call me or meet with me and let’s figure it out. In the end, the client is not always right but they are always right about what they want and how they want it.”

From a buyer’s perspective, Fred Held, a Los Angeles, California buyer of IT services in his role as principle of a private equity and management company, believes the VARs who focus most on overcoming relationship FUD are the ones most likely to succeed. “As someone who has hired many VARs in his career, I’m looking for the little things such as VARs that cost slightly more per day but the number of days they work is much lower. VARs that are available by telephone any time of day any day of the week and they are happy to hear from you. VARs that check to make sure what they installed is working well and the front line is happy.”

While removing FUD from the transaction is a good strategy for getting in the door, it remains a viable sales tool once you have established a relationship with the customer. Coley Perry, sales manager for Solution Partners (www.solpart.com), a Naperville, Illinois-based technology staffing and consulting firm, wants his customers to have just the right amount of FUD. “I want our customers to be so happy that the thought of switching to a new vendor causes fear, uncertainty and doubt.”