Will it help to accelerate your channel by scoring your VAR Channel Partners?

I wrote about the creation of an effective channel program for VARs in my previous blog entry and explained how SolidWorks made a decision to really understand its channel partners, their strengths and weaknesses. What SolidWorks also did was to rank its partners and the question that we of course have is how to make all of this happen. There are a myriad different ways to rank things but what SolidWorks decided to do was to create a derivate of GE Marketing Management Model that enabled them to rank the channel partners.

Based on the analysis from David Skok, clustering the partners based on different criteria helped SolidWorks tremendously to see where to put their focus on and also create a plan how to help its VAR channel.

The criteria that they put together was based on a numeric score (from 1 to 5) and the questions were based on factors such as “Do you have a dedicated sales manager?”, “What percentage of your sales representatives has attended formal sales training?”… I am sure you get the point here… Read more about the questions in the excellent blog by David Skok.

What the interview process revealed was that most of the VAR channel partners did not have written  documents capturing the business plans or any system to track the performance. Furthermore, the business leaders had for the most part a good and solid understanding of their business, but the lack of written procedures and documentation prohibits these organizations to scale and grow.

What was also interesting in the analysis of SolidWorks Channel Partners was that not all of the VAR channel partners bought into the improvement program of different reasons: some just couldn’t and some just did not want to. This is a very tough question to any ISV: should I kick out the channel partner from the program if it does not show its readiness for investment? What if I walk away from considerable revenue source if I do that?

I have built and managed channels throughout my career and I have to say that it is very hard to provide one simple formula for success. What I can say though is that an ISV has to treat its channel partner almost as part of the ISV organization itself. I have seen too many organizations mistreat its channel in many different ways, everything from competing with its direct sales to changing terms during the sales process. Those are things that will cause trouble for the ISV sooner than later.

I have soon lived half of my life in the US (second half in Europe) and I can confidently say that even if the the world is large, it is extremely small in respect to each industry. Europeans see US as a huge market (which it is), but the players are still pretty much known. I know the Microsoft ecosystem and I would be tempted to say that many know me and my company as well. It is the years of collaboration on multiple different levels that has made this happen. I think this is extremely fascinating to think about and it is also a tremendous opportunity for any ISV to grown and build its channel. There is a simple rule to this: “treat your channel as you would treat your own people, and you will see that your interests are aligned”. Nothing else matters.

It the last and final blog entry about SolidWorks, I will summarize the findings, and recommendations of their channel program.

Stay tuned for more….

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