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Helping You Deliver Tomorrow’s CX, Today

Why Partner Experience Matters

(By Jim Semon and Andy Monga)

Many companies have channel partners that control a significant part of the actual experience with customers. Automobile companies have dealers, insurance companies have independent agents, software companies have value-added resellers (VARs), and hardware and other heavy equipment manufacturers have distributors. Even brokers or financial advisors have external partners.

While companies may not have direct control over partners, brand owners have the opportunity to influence partner organizations to provide a better customer experience.

A Forrester analysis indicates that "Those who use a channel sales enablement technology solution show a 22% increase in hitting sales quota."

In this post, we'll discuss the decision making criteria a business might consider when moving from a fully direct channel business model to supporting an indirect channel for all or a part of their business practices.

The Role of Partners within the Customer Ecosystem

Customer experience is the sum of all interactions a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. Customers have these experiences anytime, anywhere, on any channel with multiple constituencies of the company or brand.

A great customer experience relies on the company's ability to connect behind-the-scenes entities and activities to customer interactions and to provide superior service at every touch point. Companies need to consider the influence of every single employee and most importantly external partners on every single customer interaction. Forrester calls this complex set of relationships the customer experience ecosystem.

"Moreover, the age of the customer dynamics widen the aperture of the customer experience spectrum to include customer' experience of partners and partners' experience of their manufacturers."
–Forrester Wave

Here's a list of the primary types of partner relationships. You should consider the type of relationship based on how your company wants to utilize partners to help sell and drive business objectives.

  • Reseller: Partners that sell your product who act mostly as a different sales channel. The partner derives their revenue through the margin you provide them when they sell your product. They can sell your products using their own contracts.
  • System Integrator (SI): Partners who develop more complete solutions by integrating your product with others. These partners make the majority of their revenue through services and little through product resale. The customer would typically sign two contracts, one for products and one for services.
  • Distributor: Partners that can leverage the distribution of your product through a network of other partners giving them choice. Marketplaces can offer side-by-side comparisons.
  • Value-added Reseller (VAR): Partners who could provide additional products or services or packages bundled with your product to deliver a more complete solution to their customers. Their profits come more from the delivery of their services, than from the margin you provide them for reselling your product.
  • Original Equipment Manufacturer (OEM): Partners with their own product to sell who are looking to expand their offering with your product. For example, bundling Intel chips inside of a Dell computer.

Considerations for Utilizing Channel Management

Once you've established the type of partner relationship, it's important to manage the processes and experiences across your indirect channels. Here are some important considerations.

  • Function: Are some business functions better served through an indirect channel? Some scenarios include field service, product installation, preventative maintenance, or lead generation.

    Think about how third party contracts are used for home installation, real estate appraisals, or home health care after hospital visits.

    For example, you might be able to have your field service outsourced to a third party who offers a better experience for onsite customer service.
  • Reach: Are you missing sales opportunities for some reason? Is it possible that your sales team cannot reach all of the customers in their assigned territory? Are there companies that never seem to be able to get served by your business due to size or other issue?

    A partner might be able to sell products to customers that are harder to access by your current sales teams.
  • Profitability: Are there deals that aren't cost effective for your sales teams to work on but might be profitable for an external team? Profitability can diminish for certain business segments. Your company might attempt to reach those customers with a specialized product or service sold through a partner.

    You might be able to offer partners deals because they can service them more efficiently.
  • Brand: Do you have a well-defined partner community? Are your partners helping you do business? Would you consider allowing your partners to sell for you under their own paperwork and contracts? How do your competitors sell? If you can offload business functions without compromising your brand, this is a good consideration.
  • Territory: Are territories or bands best served through a channel? Could a partner allow you to expand to a new geography or market segment? Sometimes a partner is already established and ready to engage, they just need to negotiate the terms of the relationship.

    You might be able to save money by setting up a distributorship in a foreign country, who are more familiar with local regulations, rather than establishing your own business there.
  • Overlap: Span of control. How would you segment or separate business functions so a partners coverage doesn't hinder or overlap your direct channels? Or is it a strategic decision to switch from a direct sales to an indirect business model? Can you convert your existing sales team to support the channel?

    You can both work in the same country or the same state at the same time if the appropriate controls are in place.

Bottom Line: Good Partner Experience Drives a Good Customer Experience

So as you look to grow your business, indirect channels can support your objectives across marketing, sales and service needs. Channel management can drive revenues or enhance customer outcomes for your customer.

"Moreover, the age of the customer dynamics widen the aperture of the customer experience spectrum to include customer' experience of partners and partners' experience of their manufacturers."
–Forrester Wave

Our next blog post will discuss how you deliver optimal partner experience across your channel ecosystem, by transforming the ease-of-doing-business along the entire partner life-cycle.

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