CJ10. This episode features Laz Gonzalez, thought leader and Chief Strategy Officer for the channel tech company Zift Solutions. Laz has a unique channel journey that begins in Cuba and stretches across a wide variety of channel leadership roles. And he likes to spice things up with a little conga drum action along the way.

This episode is packed with valuable channel marketing tips. We talk about how lack of alignment within an organization and with partners hurts so many partner programs. Laz shares the 3 key ingredients for channel marketing success and how much you should budget for each. And he explains why too little of one ingredient can greatly reduce the return on your channel marketing investments.

[3:00] Think of Zift as an ERP solution for the channel. Zift merged with RelayWare and acquired some companies like Elastic Grid to create an end-to-end solution.

[6:30] As Chief Strategy Officer for Zift, Laz covers channel marketing and channel sales, and has done both in his channel career.

[8:40] Zaz was born in Cuba, came to USA in the 60s and moved to the Bronx. Learned to play the Conga drums at a young age for his parents’ house parties where everyone was a musician.

[10:15] Laz’ dream was to be an astronaut. He joined the Air Force during college, learned how to fly and how to program.  Decided to follow his new dream of a career in the computer industry.

[13:00] First channel role was working as a partner of Digital Equipment Corp. Laz was the network guy, relied on DEC’s partner program for training. Went on to Lotus Corp. when they rolled out a first-class partner program. Then had the opportunity to move into running international channel programs. Joined Sirius Decisions where he helped create channel marketing frameworks and the Demand Waterfall.

[18:00] Channel programs that succeed have close alignment between channel sales and channel marketing.

[19:30] Day-to-day channel challenges include getting alignment within the organization; is the channel organization funded and resourced to do the job? is it connected with the right parts of the organization to succeed? Zift serves applications to both sales and marketing, helping to build that alignment by providing data that breaks down the silos between the two.

[21:00] When running marketing programs for partners, having partners sales data helps you pick the right partners and the right marketing campaigns.  The data becomes the lifeblood of information on the partners that flows into the marketing.

[22:00] Partner engagement is an uber challenge. Lack of engagement hurts a lot of partner programs. Zift drives more productive partner engagement by getting the vendor’s sales and marketing teams together, rather than in silos that are counter-productive.

[26:00] There are three modes of partner marketing; to the partner, through the partner, and for the partner. To-partner marketing builds awareness of your products and your program to recruit and gain mind-share.  Most vendors start doing marketing for the partner, then try to get the partner do the marketing themselves.

[28:20] “What’s in it for you – the partner” is a message that many vendors miss.

[29:00] Many organizations have trouble pinning down their channel budget requirements. Generally, companies with under $1 Billion in revenue spend 5-7% of their channel revenue on their channel program. Compare that to sells budgets of 20% and marketing budgets of 7-8%. That percentage goes down as channel revenue grows. Companies over $5B spend 2-3% of their channel revenue on their channel program.

[31:00] You want to spend the majority of your channel budget for marketing activities through the partner. But if you’re spending less than 30% of your channel budget in to-partner marketing, you get less than 15% adoption for anything you do in through-partner marketing. For-partner marketing should be special types of program like financial incentives and should not make up more than 10% of your budget. So a good split would be 30% of budget to-partner, 60% through the partner, 10% for the partner.

[36:00] Zift has team of channel engagement folks to help improve partner marketing skills. Vendors are also implementing marketing academies for partners.

[37:30] Laz cautions that vendors can go overboard on marketing training. Need to be more prescriptive and teach partners on marketing skills specific to the vendor’s offering.

[39:00] Big takeaway for Laz, with all the change taking place, is that you can no longer implement a one-size-fits-all partner program. With all the different partner types…specialized, cloud, MSP, agents, referrals, OEM, alliance partners…suppliers need to develop programs that recognize the differences between these partner types.  And you need a partner management software solution like Zift that allows you to manage all these partners types on one platform.