Maximizing the potential of channel partnerships – what does it look like in practice? We have applied our team’s expertise and technological capabilities across different use cases. In the third part of our blog series on partner strategies, discover how we’ve helped our clients unlock better business growth.
Partner model redesign – based on market insights and validated client attractiveness
Challenge and objectives
Our client, a global leader in enterprise software solutions, wanted to redesign their cloud partner programs to ensure they were competitive and aligned with market standards. The objective was to benchmark relevant partner programs of other big cloud players to gather insights and make informed decisions.
To address the challenge, a comprehensive analysis of partner programs from three large competitors was conducted. Key questions were to understand how partner programs were used at the other players, assess the competitiveness of the client’s planned incentive levels compared to the competition, and examine the effectiveness of said incentives to drive the desired type of deal collaboration.
The findings from the considered programs were carefully evaluated and formed the basis for the recommendations.
Through our analysis of competitor partner programs, we discovered significant variations in their approaches and identified that some players offer comparatively more attractive and behavior-driving incentives compared to our client’s current partner program. Yet, desired partner behavior and business focus in the indirect channel play a crucial role in partner model design. While some competitors prioritize rewarding “hunting” activities and opportunity generation, others place greater emphasis on renewals and smaller deal sizes. In terms of account management, the competitor focus is rather on customer success and outcome-oriented incentives than process activities. All in all, these findings highlight the importance of aligning a partner program with specific objectives and regularly reviewing its effectiveness.
Based on our findings, a set of recommendations for our client’s future partner model were derived. These recommendations include rewarding specific aspects of the customer journey where our client wanted to drive partner activity. We also suggested differentiating incentives based on strategic priorities, such as regions and products, and tying account management incentives to customer success KPIs, such as consumption and growth.
The impact of implementing these recommendations is a more competitive and goal-aligned cloud partner program. Our client was able to attract and incentivize partners effectively, ensuring customer success and driving business growth. John Scola, GVP Software Partner Activation & Experience, summarizes: “Collaborating with Simon-Kucher on redesigning one of our partner commercial models was a true game-changer, with open and productive communication throughout the entire process. The team’s expertise and insights were instrumental in shaping our strategy, leading to a highly successful launch. The results exceeded our expectations, with increased partner engagement and significant business growth. Working with Simon-Kucher was a refreshing experience that unlocked the true power of our partner ecosystem.”
Implementing a robust partner strategy to boost indirect channel revenue
Challenge and objectives
The challenge for our client, a US-based global web infrastructure and website security software provider with over 1 billion US dollars in revenue, was to develop a robust partner strategy. While the CFO recognized the paramount importance of partnerships in achieving their ambitious growth target, the CEO was initially skeptical about their value. At the time, partners contributed to 10 percent of our client’s business, amounting to 100 million dollars in revenue. The objectives of the project were:
- Identifying the right set of channel partners to prioritize and focus efforts
- Developing guidance on when and how to leverage channel partners in the go-to-market approach
Our approach involved in-depth analysis and collaboration with the executive team. We conducted extensive research and identified key insights to demonstrate the significance of partnerships in achieving the company’s growth objectives. With regional input and executive buy-in, we finalized a comprehensive strategy that guided the company’s channel engagement, segmentation, and pricing decisions.
The project yielded significant learnings for the executive team. They realized that partnerships could accelerate growth in certain geographies, leveraging the pre-existing networks of partners. They also became aware of the essential role of partners in specific verticals, such as the US public sector, where partners possess the necessary vettings and networks that would otherwise take ages to build.
Recognizing the limitations of a one-size-fits-all approach, the team embraced a differentiated strategy tailored to geographies and partner types, distinguishing between distributors, integrators, and managed service providers in both priorities and collaboration mode. Clear rules and guidance were implemented to ensure consistent and optimal partner engagement. Additionally, the team recognized the importance of involving partners early in Large Enterprise deals, avoiding missed opportunities and enhancing deal qualification and negotiation processes.
The development of a differentiated channel partner strategy had a transformative impact on different levels. With the executive team fully onboard, the company was well-positioned to harness the power of partnerships to drive their business towards the revenue milestone they were aiming at. They were able to strengthen their channel relationships, expand market reach, and achieve substantial revenue growth. In fact, the impact was a 50 percent increase in indirect channel revenue.
When it works, everyone wins
Channel partnerships can effectively act as an extended B2B software sales and customer success arm, at a time when “land and expand” strategies require regular, high-quality customer interactions. Successful channel partnerships do both: support ongoing customer success and boost sales effectiveness. Finding the right channel partners, incentivizing, and giving them what they need to do the job are all important elements to enable better growth.
When your partner strategy works, it delivers value to you, your channel partner, and your customers.
Questions? Reach out to Lisa Neumeier and Alix Nepveux today to see how you can leverage the partner channel for driving your business!
Discover more information in part 1 and 2 of our blog series on partner strategies: