Wednesday, September 2, 2020

The Evolution of Go-To-Market - Evaluating a Partner's Service Offerings


In the first part of my Go-to-Market Evolution series, along with the concept of using Sabermetrics (popularized in the film Moneyball) to optimize a company’s channel partner selection, I discussed the overwhelming amount of choice that today’s security buyer faces. 


Baseball is not the only sport applying the principals of Sabermetrics; Liverpool Football Club track a variety of stats for approximately 10,000 players from around the world!  The channel partners that a company signs up are equivalent to a player on a sports team, with each one having as big an impact on a company’s success as any star player on a sports field.  Yet when companies set their go-to-market channel strategy, they rarely look at anything more than superficial indicators of success, such as the number of employees, their yearly sales, and financial stability.  Most of the time when looking at a list of potential channel partners companies usually pick the large, well-known partners and those with whom their channel managers already have relationships.  What if a company hired a channel manager with ties to the wrong type of channel partner?  We are in an age of Data Analytics, Artificial Intelligence and Machine Learning, so why can so few companies answer questions on simple partner stats, let alone looking at the equivalent of “in-game” stats I am proposing, and that make Liverpool Football Club so successful? 


The first area of recommended “in-game” data we will focus on is a partner’s mix of service offerings.  Then in Part 3, we will cover how the products a partner sells relates to their potential success in bringing your products to market.  Services can be a better indicator of future success than a track record of product sales, but given your goal is to sell a product, you need a partner that has some level of success on both sides.  When selecting a partner to resell your product, find out what their distribution is between services revenue and product revenue.  Partners with significantly more service revenue than product revenue are not experienced in selling products along with those services.  A partner with more product revenue than service revenue maybe doing nothing more than taking orders for products in established categories.  You need a partner with the right mix of product sales and service sales, and when you find them this partner will have both a tight relationship with their customers and understand how to sell products and services together to those customers.  So why is this mix so important?


People tend to do business with people that they trust.  When a company contracts with another company for services, they are showing a significant level of trust and confidence in that partner.  The first time a customer uses services from a new partner it is a big step.  The level of trust that comes with repeat services is a considerable indicator of the reseller’s potential to take your product in with a recommendation that would be respected.  The strength of the relationship between a partner and their customer hinges on how well that partner delivers services.  Customers do not typically blame a partner for a lousy product purchase; instead, they often blame the vendor of the product!


Additionally, the customer might purchase a product from a partner simply because they offered them the highest level of discount, while services are selected based on the success of the company delivering those services.  A reseller's track record of successful service delivery can also be a good indicator that they would be a reliable partner.  If a customer receives a meager level of service, they will be unlikely to sign up for additional services or extend any existing services.  The key is to look at the strength of the relationship; that is why repeat service delivery is a more robust indicator of trust than a partner’s history of selling multiple products to the same company.  Don’t get me wrong, a prior history of selling products to a customer is still essential, and I will be covering that in my next piece.


When looking for a company or individual to deliver services, people more often look for recommendations from people they trust.  How many times you have heard someone ask, "Does anyone know a good plumber?"  We want our partners to be that referral. We want partners that are trusted advisors to their customers.  We want partners that have success selling not just the same service multiple times to the same customer, but also success selling various services to the same customer and partners that have service offerings which synergize with our product area.  Once a customer has found that trusted advisor, they will most often go to that trusted partner time and time again, especially when looking for recommendations for additional services.  Customers are also more likely to listen to that trusted advisor when they recommend other items (such as your new product).


Repeat services have secondary benefits as well.  When delivering services, a company will typically have multiple staff members engaged with numerous staff members of the customer.  Services also require a deeper level of interaction with the customer than selling a product does.  This repeated in-depth exposure to a customer gives our partner a higher-level understanding of that customer’s environment and needs.  When selling only products, the partner would not typically have this level of visibility.  Partners with this level of interaction with their customers are in a prime position to uncover additional needs and be a sounding board for the customer to ask questions.  Therefore, a partner selling multiple repeat services to their customers is far more likely to be able to pitch your product in the right way and select the optimal customer to approach.  Understanding a customer’s architecture and overall environment is key to delivering value to the customer. 


This importance of understanding a customer’s architecture is one of the reasons I have moved this blog to the home of the Security Architecture podcast.  I would highly recommend listening to podcasts which discusses architecture to individual security vendors! 


The Security Architecture podcast is a first of a kind cybersecurity podcast that focuses on architecture and integration by pulling back the veil on the confusing world of security theater to help you make sense of new technologies, better integrate the tools you own, and ultimately make better choices in securing your company.


Along with looking at the frequency which a customer uses a partner’s services, we also want to find out what types of services the partner offers, such as vulnerability assessment, compliance audits, and incident response.  A partner whose services do not synergize with your core product value is likely to provide little benefit.  For example, if a partner’s services are built up around server installation while your product focuses on breach detection, then the buyer and the value derived are entirely unrelated.  The flip side of this, a partner that offers services surrounding incident response, which also sells breach detection solutions, has a significant level of alignment.  Additionally, the services delivered could even highlight the need for your product, which is optimal for you and the partner.  If your product requires professional services during implementation or has a natural tie-in for value-added services at the time of implementation, your product could generate more services for the partner.  These "win-win" situations create far more synergy with the partner, significantly increasing the attention level you get from your partner and overall improving the odds of success when taking your solution to market!


Overall, customers purchase the technologies where they can understand the value the quickest, not necessarily the solution with the best value.  A partner with product and service experience overlapping with your solution category and customer base can more efficiently and with greater confidence sell your solution.  In the next piece, I will cover how the products a partner sells can have a similar impact on your partner selection.

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