Many technology vendors have taken decisive action in response to Covid-19, putting relief measures and other benefits in place to protect and support their channel partners during a very difficult time. For many partners, these additional benefits have brought the support needed to stay afloat. But what about those partners who, even with the added help from vendors, will not survive this economic crisis? What happens to their customers? Your customers? In this unprecedented time, it puts the age-old question back in the limelight…“Who owns the customer?”
Everyone has heard a vendor say, “it’s our customer because they are buying OUR product!” Everyone has heard a partner say, “if it weren’t for us, that customer would have never bought your product!”
The fact is the partner feels true ownership of that customer. In most cases, they likely acquired and grew that relationship over many years, having implemented complex solutions encompassing products and from multiple vendors.
Co-Ownership with Partners
Long before COVID, companies who truly value the channel have strived to create a sense of shared customer ownership between partners and vendors. They have tools and engagement policies to reduce channel conflict, not only between themselves and partners but between competing partners for customer ownership. Program elements and policies such as:
- Deal or opportunity registration, providing an advantage above other players in the deal or account.
- Co-marketing activities, allowing partners to co-brand marketing materials and other marketing activities that promote both brands.
- Co-selling activities and rules of engagement, including account mapping, and pricing policies to ensure the partner that uncovers and works an opportunity has a fair chance of making a reasonable margin to compensate their costs and efforts.
Challenges in the New World
As we navigate through this crisis, it is, unfortunately, safe to predict that not all partners that existed pre-COVID will be in business under the new normal. If the partner that uncovered the initial opportunity and supported that customer for years no longer exists, now who owns the customer? Do you have a plan in place for identifying at-risk partners, and a strategy for retaining those customer relationships, and the associated revenue? How can you manage the customer experience and work with the partner to ensure the customer is not a loss for you both?
Managing your partners AND your customers
There are 5 steps you as the vendor can take to not only assess potential risk with partners but work with them to retain and protect the relationship with your customers.
- Partner Relief and Support: If you have not yet put relief measures in place, consider making financial investments in your partner community. If a short-term extension of additional credit, or pricing actions keep a long-term partner in business, that is an investment in your customer retention strategy. An extra 45 days of credit might be the difference between survival and bankruptcy. If you already have a relief plan in place, check-in with your partners regularly to see what is effective.
- Assess the Risk: Have candid financial discussions with your partners. Ask the tough questions to determine if their business is at risk and how that may translate to your business both financially and with customers.
- Leverage Distribution: Work with your distributors to help identify partners who may be at risk or need additional support.
- Know the Terms: Review your partner agreements to see what recourse you have if a partner must stop operations completely and/or declares bankruptcy.
- Leverage the Ecosystem: If needed, help your partners create a network of partners to mitigate business disruptions with customers, and develop business policies for how to deploy and implement.
We are all operating in a new environment that has generated a whole new set of business challenges, but it is also changing the way in which we approach and solve them. During the last recession, the study “THE ECONOMIC FUTURE JUST HAPPENED” by Dane Stangler of the Ewing Marion Kauffman Foundation, found that well over half of the companies on the Fortune 500, and just under half of the Inc. list of America’s fastest-growing companies, began during a recession or bear market.
The relationship between vendors and partners, vendors and customers, and partners and customers will continue to evolve. Remember, the customer is also navigating this new world and is relying on you and your partners to minimize stress and disruption to their business during this time. Supporting your partners while protecting customer relationships needs to be a key consideration in your new adaptive channel strategy.
Interested in exploring ways to improve your partner channel? Contact Us Directly to see how we can help.
Partner Perspectives is a global management consulting agency focused on enabling clients to maximize their investments in the technology partner channel. Partner Perspectives is an operating division of TJL Information Technologies, Inc., founded in 2006.