My background is with corporate web teams, and this is a topic that is just starting to get explored.
Channel and Partner Marketing often largest revenue stream
At a previous job I was the Web Marketing Manager for the Channel Extranet site at Hitachi Data Systems, called PartnerXchange, a website that dedicated to helping our partners resell our products. This was a high-tech B2B sale which accounted for 60% of the overall revenue of the company. One of the largest networking companies recently told me that the channel accounts for 80% of the overall revenue of the company.
[While Social Media has impacted corporate marketing departments such as PR, MarCom and Web Marketing, Channel and Partner Marketing programs are starting to wake up to the opportunities –and risks– that it entails]
Terms used:
Vendor: The primary company selling the products, such as Hitachi Data Systems
Partner: Often referred to as the “channel, this group resells products to the market, often with additional services, sometimes referred to as a value added reseller or “VAR”.
Social Media: An easy to use toolset that includes technolgoies that empower anyone to easily communicate, such as: blogs, forums, podcasts, social networks, and other easy to publish tools.
Customer: End recipient of product and services, in this case, they primarily deal with the Partner, and may or may not deal with the vendor.
Small uptake in Channel and Partner Marketing
At first, social media impacted the PR group within any particular vendor, then spread to corporate marketing, yet just now in 2008 I’m starting to see some uptake of Channel Marketing departments starting to take notice of social media for channel use.
Resellers often have limited marketing resources
A majority of resellers (although there’s some larger ones) have challenges with marketing, many are small or medium size businesses that have strong competency in service delivery, but lean on the larger vendors to setup marketing initiatives and programs to help them.
When it comes to social media, this can go one of two ways, some small companies, strapped for resources have already started to use these cost-effective tools to communicate to their clients. On the other hand, these resource limited companies won’t have the time to even think about ‘new media’ ways of marketing themselves.
The fact of the matter is that social media tools are cost-effective when used correctly, but could cost hundreds more when used incorrectly often in the form of brand backlash.
Four Impacts of Social Media on Channel Marketing and Partner Marketing”
1) Internal Vendor Training and Support
Vendors can benefit from training their Channel sales groups, and support teams by creating internal blogs, podcasts, to teach internal staff how to better communicate and work with channel partners. Along these lines include fulfillment and support, where collaboration and community tools could help harvest, manage, and deliver key information to teams.2) Vendor to Partner Communications
Perhaps the first seen effort is to use these tools as a way to better communicate to partners. Tools such as blogs and podcasts are great for talking to your partner base, but don’t forget about letting them cross-communicate to each other by using community tools. The better your partners are at reselling your products, they better off you are. It’s expected there will be some needs for permissions and rules of engagement as many partner are competitors.3) Partner to Customer though Empowerment
The resource restricted partner is going to be happy to receive help from the vendor to market their products, and often they already have content that is re-syndicated on their website such as brochures, case studies, and white papers. Now, start thinking about how to create media (audio video) that could have a pre-roll with your partners name on it, and then embedded on their site. This would include RSS news feeds what could help populate their website with freshly updated content. Lastly, consider social media training sessions that teach them how to fish. As the vendor and partner groups start to cross-link all boats start to rise as the conversation gets passed from one company to another.4) Vendor to Customer
Lastly, vendors should use the opportunity to discuss from their own social media activities the great things their partners are doing to satisfy clients. While it’s sometimes difficult to remain non-partisan, discussing issues, challenges, and solutions that partners are doing in an non-biased way from blogs, forums, communities, and podcasts could spark discussion that could lead to further sales.
Conclusion
In summary, there’s quite a few ways these tools can be used to improve the triangular relationship between vendors, partners, and customers. You’ll often need to find an internal resource dedicated to these new media efforts, and you may require outside help to train, establish a program and conduct workshops. I’m sure you’ll find the right mix.
Another aspect in which a partner network solution can make a positive contribution is in facilitating a specific business process. Things like a certification process can be built into the network through workflows. Another process is the partnership process itself. The network can facilitate ISVs and VARs to find each other and work together to offer a joint solution to a customer.
Thanks Veronica, all good elements of a program. Now how can social media improve any of those?
Hi Jeremiah, the platform we’ve used to build partner networks was actually a collaboration solution. One example was a community called “The Marketplace” which maps out the end to end partnering process. Partners had a community which was seeded with collateral needed at each stage of the process, things like NDAs, MOUs and Reseller agreements. These were all templates and one of the intentions was for partners to upload new versions of templates and to begin having conversations around the process.
While the solution was built around maximizing the value of collaboration b/w partner-to-partner and between partners-to-vendor, social media would have brought the people aspect to the network. Rich profiles, rewards and recognition programs, communication hubs and support all being part of the network. At the time I worked for the collaboration vendor, we found creative implementations for all these, but we really were in need of a collaboration and social media solution.
Unfortunately, while I was working there, overall adoption did not take off as it could have. Although, I believe it was due to a lack of community management and executive sponsorship as opposed to an issue with the solution that was built.
thanks for this jeremiah. as always good timing! 🙂
I appreciate your illuminating perspective regarding the various cast of characters! It is always useful to have the “starting line-up”!
Every day so intersting post. I´m working on my final report forUniversity about Social Media and here i can find a lot of information. Thnx
Collaboration and Online Community in the Channel isn’t something new to large enterprise – SAP were doing it in 2005/06 with their Channel Partner Solutions Network (CPSN) which was later renamed the P2P Network (Partner to Partner Network). I also know that with their renewed focus on the Channel, Dell and at least one other large IT hardware and software vendor are looking at how to use social media to enable their partners.
My company helped SAP build their original partner network and, among other things, it provided for each partner to build out private online communities for themselves to use to collaborate with other SAP partners.
However, just like every implementation of social media or online community, it’s purpose has to be for a reason that has some tangible value to the users. We found that some SAP users instantly got it and saw their partner-to-partner sales increase by well over 300% (Enprise in NZ) within a single year.
Feedback from other partners suggested they were just too busy to use it, didn’t see the value in it, or were worried about sharing their IP with other partners. SAP’s P2P network is still in place and continues to be developed to address these concerns.
What the experience has shown me is that the challenge for the Channel is how to engage sometimes huge numbers of small partners that make up the bulk of a partner base and get them to be involved in the design and implementation of any social media or online community strategy? (another opportunity for social media here….because without any partner involvement up front, these opportunities can easily fail to yield the results the sponsoring vendor hopes to achieve)
Sorry for the ramble. While social media for channel partners isn’t new, I agree it is taking a long time to get off the ground and maybe only now is starting to increase as use of these tools becomes more commonplace. It’s certainly exciting that you are seeing an increase in interest among Channel Marketers!
Reach me at twitter.com/sathompson or sixent.com/steve
Thanks Steve, this is good to know info.
Jeremiah, thanks for addressing this topic and the advantages of social media. As Steve Thompson mentioned above, Dell is actively utilizing social media to engage and listen to our Partners. As a leader of this effort, Iâ„¢m more than excited to connect, build tools and harness partner conversations to continue evolving our PartnerDirect program.
The spread of social media amongst business units has been an experience to witness here at Dell. I look forward to sharing our channel milestones; you can reach me on twitter- APaxtonatDell
Take care,
Amie Paxton
Channel Community Manager
Hi Jeremiah,
Why do you think there is little response and interest in this subject? In your experience, is there a difference between channel marketing and customer facing marketing folks?
Just wondering.
I have been using strategic partnerships for many years. ‘Strategic’ meaning that the partners each bring something to the table that helps further the interests of all concerned.
Collective efforts and resources to achieve something that otherwise could not succeed while each interest (partner) has its own base of resources to sustain them is a good way to do business.
Trying to do everything under one roof also is like having all the eggs in one basket. Diversity helps insulate from many of the risks in a sole venture.
Its better to have a small piece of a huge pie than all of no pie. Right?
VMware has a big private partner portal (with a new version just about ready to launch on Force.com), and we have a full schedule of webinars and BrainSharks for our partners (Your category #1, internal training & support).
As far as the public side, we’re ramping up the content on our partner-facing blog (http://blogs.vmware.com/partner/) that also goes out to Twitter & Facebook. The head of channel sales Doug Smith (@smith_douglas) adds the personal touch on Twitter. (That’s all Category #2 Vendor-Partner)
We’re using SharedVue and RSS to syndicate product information to these channel partners’ websites. (#3 Partner-Customer)
And we talk directly to our customers all the time, via our own social media channels of blogs, webinars, podcasts, etc., that often include partners. (#4)
Could we add a slightly different kind of channel here? With so much intellectual property already in companies, can we use social media as a way to get sharing/paying for knowledge (company consultant to customer) that is not a part of the normal channel support? Dupont did this with environment, health and safety consulting initially and opened up a new business platform eventually. They had great knowledge. There was a social benefit of sharing it. It also became a money maker. Social media could really be a benefit in this arena, particularly in areas like chemicals where customers are suppliers and vice versa. And, offering these services can help customers be more effective in their pull-through of products, but in a less direct way. May be very similar to the others here, but also could be just off direct product channel relationships enough to be interesting to channel partners.
John the VM ware info is very helpful thanks.
Jeremiah- Increasing the quantity of resellers/partners/VARs is a common growth strategy for certain types of vendors, but you haven’t called that out as a potential impact in this post. Shouldn’t social media (if targeting the correct players in potential partner organizations) be able to support goals related to recruiting new partners? Interested in the community’s and your thoughts…