So you built yourself some I.P., and had some success selling it directly, and now you want to scale up with a Channel Model. You are in the right place, because based on our recent experience, I can share a few things to do, and a whole bunch of things not to.
Prepare to Pick a Side
Literally straddling a fence, usually ends with a picket stuck in your ass. Those greedy souls who attempted to have both a Partner/Reseller Channel, as well as a Direct Sales Team, will often find things getting stuck to them also. Those who attempt to “Have their Cake, and Eat it Too”, often end up with a very small slice of cake. However, this is a pivotal decision point in the life of a new ISV. In a recent study, the number one issue cited by Partner/Resellers with their Vendor/ISVs, is Channel Conflict. No Shit!
I get the pain, we went through it ourselves. To build a channel, we made the decision (correctly I feel) to stop offering RapidStart CRM directly to customers. Was it easy to chop a healthy arm off of our practice, in hopes that it would grow back stronger via partners? In a word… No.
Thank you Ma’am, Can I have Another?
Assuming you bite the bullet, and terminate your direct sales effort to appease your fledgling channel, you then get to worry about the other Channel Conflict issue: Partners fighting with you, over each other. I will go way out on a limb here and guess that everyone reading this post has been screwed, at least once, by an ISV giving one of your Leads to another Partner to cash in on. As a Partner, part of your goal with an ISV is to gain favoritism, usually by promising the world, in hopes that you might hear, “What? You will move how much of our stuff? Here’s all of Acme’s Leads”.
Rule #1: Buyers are Liars, and so are Partners and ISVs
Let’s face it, the Channel Model is going to place a Partner in-between you and a Buyer. If you ultimately go the Distribution route, you have added yet another monkey-in-the-middle. I will write about our experience with Distribution in a future post. Be prepared, as you look over the shoulder(s) of those between you and the buyer, to grimace as you watch your value proposition get butchered in the translation. The difference between flat-out lying, and ignorantly mis-stating facts, is negligible.
Signing up Partners is 1/8 of the Battle
I remember the day our very first Partner signed up on our Portal as a reseller, after we launched at WPC15. I took my wife out to dinner that night. The next day another Partner signed up, and I took my wife out again. The next day, 3 Partners signed up, and I decided I would go broke eating out if this kept up. We have over 100 Partners now, which I think is pretty good for a niche ISV. Eventually, the giddiness of a new partner having signed up, gives way to a slight tilt of the head towards the email notification, but I still crack a small smile when it happens. It’s not that I no longer appreciate partners, it’s that I have learned that Partners do not automatically equal money in the bank.
When did everybody stop reading directions?
Regardless of your I.P., education becomes your new business. When, together with Microsoft, we attempted to identify the challenges facing the broad cloud partners with engaging with Dynamics CRM Online, we correctly surmised that the issue was with deployment. CRM is a quite different platform and product than what they were familiar with. Our solution (at the time customer-facing) to rapid, low cost CRM deployment is what led Microsoft to suggest to us that we become an ISV in the first place. We invested heavily in rebuilding our solution to work for non-CRM partners, and I am pleased to say that we absolutely nailed it. We have done countless demos to partners, all with the same result, “Wow, this is awesome, I can see how I can engage with CRM now, and make a pile of money!”
Our Partner Portal is laden with educational information for Partners on how to use our solution to make money, what it does, why it exists, etc. So why then, are 90% of the deployments, resulting from customers asking our Partners about CRM, instead of the other way around?
If they won’t sell it, you will starve
“You can lead a Partner to Money, but you can’t make him pick it up”. The fact is, we did solve a huge problem, CRM Deployment/Adoption, and we solved it in an elegant, proven way. But we did not solve the adjacent problem, “Selling CRM” in the first place. As a result we, and also Microsoft, are now shifting our focus to a “Sell CRM Simple” messaging and effort. You will be hearing more about that soon, including some new terms for CRM including “Opportunity Management”. Sounds less intimidating already, doesn’t it? You should know that as an ISV, we will be carrying the lion’s share of this effort, so as an ISV you should also be prepared. It’s not that Microsoft won’t do their part, we just need it to happen faster than they are capable of moving.
The Shiniest Object… for a fleeting moment
One negative for an ISV, resulting from the explosion of Cloud services, is a lack of available mental bandwidth in Partners. While a new Partner of yours may go to bed that night with visions of sugar-plums dancing in their heads, they unfortunately will wake up the next day. The typical partner is virtually assaulted daily with “recruit” efforts. For our particular I.P., we work regularly with Microsoft’s CRM Online recruit teams, as well as our own independent efforts, to recruit partners to CRM Online (with RapidStart CRM :-)). We are actually “competing” daily with the Azure recruit effort, for mindshare. Not just Azure, but also EMS, Power BI and every other product group within Microsoft, as well as every other vendor and distributor the partner may be engaged with! That’s a lot of noise to be heard over, and being heard once may only get a new Partner signed up. You have to hope that weeks, or months later, they even remember you when the need arises.
Sorry, I’ll get to it next post, promise
Well, I had planned to discuss actually building a Channel in this post, but I veered off into a bunch of other random things you need to think about first. I will write the originally intended post soon. In the meantime, let me leave you with one last thought: You may very well have developed the absolute best possible I.P. in the world… and still not have shit.