ZINFI Technologies, Inc.

Most vendors that are selling through the channel depend on their partners to generate demand instead of just relying on leads generated by the vendors. However, the sad reality is that the channel often remains as a fulfillment arm. Despite heavy investments that many vendors have made in channel marketing—particularly in automation and concierge services—most partners do not use marketing development funds (MDF). In fact, our worldwide channel survey data shows as much as 60% of market development funds (MDF) are not used on a quarterly basis. In this article we explore the key reasons why.

Before we delve into the issues, however, let’s spend a few minutes on the 40% of the cases where market development funds are claimed and used. In the majority of these cases, the funds are used by large partners who know how to navigate the MDF approval process and have a much larger bucket of funds. These tend to be large channel partners who have deep relationships with the vendors and have competencies in place to market, sell and fulfill demand. Also, these large channel partners usually have dedicated marketing resources in place to apply for funds and utilize them properly. While corruption tied to misuse of market development funds remains a major issue in the channel, with proper auditing and personnel management organizations can ensure that funds are being used appropriately. This part is not easy, but is highly necessary.

Now let’s take a look at the 60% of the cases where funds are not being claimed or used. Why is this the case? Market development funds (MDF) are available primarily for partners who have achieved a certain level of sales output. And this assumes that such partners have developed specific competencies in selling products and services for which market development funds (MDF) have been provided. However, as we noted earlier, most of the time these funds remain unused. Based on our research we have discovered a set of core barriers that prevent market development funds (MDF) from being claimed and used.

Partners are not focused on selling vendors’ products. Most of the time partners sell a vendor’s product as an alternative to the core solution or as an add-on. This scenario is quite common in banking, insurance, finance, technology and many other sectors where partners (agents, resellers, brokers, etc.) typically represent multiple vendors in order to provide choices to their client base. This lack of primary engagement leads to partners focusing on marketing the primary solution, but skipping any marketing activities for the add-ons as a standalone initiative. In most of these cases, partners do not apply or claim for market development funds (MDF).

Partners tend to focus on the short term. Most channel partners who generate less than $5 million to $10 million in annual revenue and lack dedicated marketing resources tend to focus their business activities on quarterly intervals. However, we know that effective marketing is not just about running events; it’s about putting together a comprehensive, 360-degree approach tied to inbound and outbound activities over the long term. The focus on quarterly initiatives can cause partners to bypass a structured approach to marketing, thus failing to apply for market development funds (MDF).

Partners do not have digital marketing expertise. Marketing has changed dramatically during the past 10 years and even more so over the past five years. In the past, B2B marketing relied heavily on telemarketing and lead generation, and B2C marketing depended heavily on advertising. However, both marketing approaches have changed—primarily due to the evolution of social media, content marketing and social selling activities. In spite of the changes, most partners are not equipped properly with the appropriate tools and techniques to exploit the advantages of digital marketing. Instead, many partners tend to rely on old techniques, like telemarketing and running events, and overlook the value of using market development funds (MDF).

Partners do not have marketing resources. It’s a well-known secret that most channel partners do not have dedicated marketing resources; that’s one reason why they are sometimes called resellers vs. remarketers. As a result, most channel partners are not aware of market development funds (MDF) requirements, don’t know how to apply for them and end up not using them even when they are available.

Vendors do not provide marketing tools and concierge services. While the first four barriers have been tied to partners’ business models and competencies, this last barrier relates directly to vendors’ shortcomings. Many vendors are reluctant to invest in a marketing automation platform that works for channel partners and offer marketing concierge services. It is essential today to give channel partners pre-configured campaigns that are pre-loaded in a channel marketing automation platform. However, that alone is not enough. Since many partners do not have dedicated marketing resources, it is also essential to provide marketing concierge services (for free) in “bite sizes” to those partners who are trying to grow their business but struggling due to lack of internal marketing resources.

As you can see, there is no lack of reasons why a significant portion of vendors’ market development funds (MDF) go unused every quarter. Vendors can address this problem by taking four key steps:

Focus on partners who are using funds. It is essential to provide partners who are engaged and know how to apply for funds and get paid with dedicated marketing services agency capabilities so that partners can quickly apply for funds and execute campaigns that are aligned with the vendor’s business objectives. This step can add deep value to channel partners.

Eliminate channel corruption. While this seems like an obvious point in today’s business environment, companies still tend to shy away from addressing this issue. In fact, they often know which partners are misusing funds but don’t want to ruffle any feathers. Unfortunately, in some case channel management is also involved in the misuse of funds. This is where regional or corporate management needs to step in and clean up the system by bringing in transparency, weeding out corrupt people and partners, and engaging in a public discussion about why it is essential to use funds properly.

Provide channel marketing automation. We have discussed earlier that campaigns need to be pre-loaded into a channel marketing automation platform so partners can quickly search for, select and execute campaigns. The platform needs to be robust enough to provide content in local languages, and it should make it easy for assets to be customized, co-branded and downloaded for execution. Furthermore, the platform should provide native execution capability, so that partners who want to launch a campaign should be able to do so themselves directly from the platform. We have seen a consistent pattern in which, once a robust platform has been adopted, the pick-up rate for market development funds (MDF) goes up substantially.

Provide marketing concierge services. Since many partners do not have dedicated marketing resources, they need to be supported by dedicated concierge services—in much the same way direct sales forces need support from marketing teams and indirect sales forces (AKA the channel). While we have written a lot on this topic, there is much more that needs to be discussed. However, the primary focus of concierge services should be in understanding the partner’s business and recommending what will truly work for them. Once this relationship has been established, utilization of market development funds (MDF) will go up.

As you can see, it can be hard to get partners to use market development funds (MDF), but if vendors provide the proper structure and focus this can be achieved. However, channel corruption associated with fund management must first be addressed by senior management. Vendors who have a clear business objective and purpose and have proper resources and channel marketing automation in place are not only likely to see fund utilization rise, but they will also find the return on their channel marketing investments can scale up quite substantially.

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Most vendors that are selling through the channel depend on their partners to generate demand instead of just relying on leads generated by the vendors. However, the sad reality is that the channel often remains as a fulfillment arm. Despite heavy investments that many vendors have made in channel marketing—particularly in automation and concierge services—most partners do not use marketing development funds (MDF). In fact, our worldwide channel survey data shows as much as 60% of market development funds (MDF) are not used on a quarterly basis. In this article we explore the key reasons why.Before we delve into the issues, however, let’s spend a few minutes on the 40% of the cases where market development funds are claimed and used. In the majority of these cases, the funds are used by large partners who know how to navigate the MDF approval process and have a much larger bucket of funds. These tend to be large channel partners who have deep relationships with the vendors and have competencies in place to market, sell and fulfill demand. Also, these large channel partners usually have dedicated marketing resources in place to apply for funds and utilize them properly. While corruption tied to misuse of market development funds remains a major issue in the channel, with proper auditing and personnel management organizations can ensure that funds are being used appropriately. This part is not easy, but is highly necessary.Now let’s take a look at the 60% of the cases where funds are not being claimed or used. Why is this the case? Market development funds (MDF) are available primarily for partners who have achieved a certain level of sales output. And this assumes that such partners have developed specific competencies in selling products and services for which market development funds (MDF) have been provided. However, as we noted earlier, most of the time these funds remain unused. Based on our research we have discovered a set of core barriers that prevent market development funds (MDF) from being claimed and used.* Partners are not focused on selling vendors’ products. Most of the time partners sell a vendor’s product as an alternative to the core solution or as an add-on. This scenario is quite common in banking, insurance, finance, technology and many other sectors where partners (agents, resellers, brokers, etc.) typically represent multiple vendors in order to provide choices to their client base. This lack of primary engagement leads to partners focusing on marketing the primary solution, but skipping any marketing activities for the add-ons as a standalone initiative. In most of these cases, partners do not apply or claim for market development funds (MDF).* Partners tend to focus on the short term. Most channel partners who generate less than $5 million to $10 million in annual revenue and lack dedicated marketing resources tend to focus their business activities on quarterly intervals. However, we know that effective marketing is not just about running events; it’s about putting together a comprehensive, 360-degree approach tied to inbound and outbound activities over the long term. The focus on quarterly initiatives can cause partners to bypass a structured approach to marketing, thus failing to apply for market development funds (MDF).* Partners do not have digital marketing expertise. Marketing has changed dramatically during the past 10 years and even more so over the past five years. In the past, B2B marketing relied heavily on telemarketing and lead generation, and B2C marketing depended heavily on advertising. However, both marketing approaches have changed—primarily due to the evolution of

Most vendors that are selling through the channel depend on their partners to generate demand instead of just relying on leads generated by the vendors. However, the sad reality is that the channel often remains as a fulfillment arm. Despite heavy investments that many vendors have made in channel marketing—particularly in automation and concierge services—most partners do not use marketing development funds (MDF). In fact, our worldwide channel survey data shows as much as 60% of market development funds (MDF) are not used on a quarterly basis. In this article we explore the key reasons why.Before we delve into the issues, however, let’s spend a few minutes on the 40% of the cases where market development funds are claimed and used. In the majority of these cases, the funds are used by large partners who know how to navigate the MDF approval process and have a much larger bucket of funds. These tend to be large channel partners who have deep relationships with the vendors and have competencies in place to market, sell and fulfill demand. Also, these large channel partners usually have dedicated marketing resources in place to apply for funds and utilize them properly. While corruption tied to misuse of market development funds remains a major issue in the channel, with proper auditing and personnel management organizations can ensure that funds are being used appropriately. This part is not easy, but is highly necessary.Now let’s take a look at the 60% of the cases where funds are not being claimed or used. Why is this the case? Market development funds (MDF) are available primarily for partners who have achieved a certain level of sales output. And this assumes that such partners have developed specific competencies in selling products and services for which market development funds (MDF) have been provided. However, as we noted earlier, most of the time these funds remain unused. Based on our research we have discovered a set of core barriers that prevent market development funds (MDF) from being claimed and used.* Partners are not focused on selling vendors’ products. Most of the time partners sell a vendor’s product as an alternative to the core solution or as an add-on. This scenario is quite common in banking, insurance, finance, technology and many other sectors where partners (agents, resellers, brokers, etc.) typically represent multiple vendors in order to provide choices to their client base. This lack of primary engagement leads to partners focusing on marketing the primary solution, but skipping any marketing activities for the add-ons as a standalone initiative. In most of these cases, partners do not apply or claim for market development funds (MDF).* Partners tend to focus on the short term. Most channel partners who generate less than $5 million to $10 million in annual revenue and lack dedicated marketing resources tend to focus their business activities on quarterly intervals. However, we know that effective marketing is not just about running events; it’s about putting together a comprehensive, 360-degree approach tied to inbound and outbound activities over the long term. The focus on quarterly initiatives can cause partners to bypass a structured approach to marketing, thus failing to apply for market development funds (MDF).* Partners do not have digital marketing expertise. Marketing has changed dramatically during the past 10 years and even more so over the past five years. In the past, B2B marketing relied heavily on telemarketing and lead generation, and B2C marketing depended heavily on advertising. However, both marketing approaches have changed—primarily due to the evolution of

Most vendors that are selling through the channel depend on their partners to generate demand instead of just relying on leads generated by the vendors. However, the sad reality is that the channel often remains as a fulfillment arm. Despite heavy investments that many vendors have made in channel marketing—particularly in automation and concierge services—most partners do not use marketing development funds (MDF). In fact, our worldwide channel survey data shows as much as 60% of market development funds (MDF) are not used on a quarterly basis. In this article we explore the key reasons why.

Before we delve into the issues, however, let’s spend a few minutes on the 40% of the cases where market development funds are claimed and used. In the majority of these cases, the funds are used by large partners who know how to navigate the MDF approval process and have a much larger bucket of funds. These tend to be large channel partners who have deep relationships with the vendors and have competencies in place to market, sell and fulfill demand. Also, these large channel partners usually have dedicated marketing resources in place to apply for funds and utilize them properly. While corruption tied to misuse of market development funds remains a major issue in the channel, with proper auditing and personnel management organizations can ensure that funds are being used appropriately. This part is not easy, but is highly necessary.

Now let’s take a look at the 60% of the cases where funds are not being claimed or used. Why is this the case? Market development funds (MDF) are available primarily for partners who have achieved a certain level of sales output. And this assumes that such partners have developed specific competencies in selling products and services for which market development funds (MDF) have been provided. However, as we noted earlier, most of the time these funds remain unused. Based on our research we have discovered a set of core barriers that prevent market development funds (MDF) from being claimed and used.

* Partners are not focused on selling vendors’ products. Most of the time partners sell a vendor’s product as an alternative to the core solution or as an add-on. This scenario is quite common in banking, insurance, finance, technology and many other sectors where partners (agents, resellers, brokers, etc.) typically represent multiple vendors in order to provide choices to their client base. This lack of primary engagement leads to partners focusing on marketing the primary solution, but skipping any marketing activities for the add-ons as a standalone initiative. In most of these cases, partners do not apply or claim for market development funds (MDF).

* Partners tend to focus on the short term. Most channel partners who generate less than $5 million to $10 million in annual revenue and lack dedicated marketing resources tend to focus their business activities on quarterly intervals. However, we know that effective marketing is not just about running events; it’s about putting together a comprehensive, 360-degree approach tied to inbound and outbound activities over the long term. The focus on quarterly initiatives can cause partners to bypass a structured approach to marketing, thus failing to apply for market development funds (MDF).

* Partners do not have digital marketing expertise. Marketing has changed dramatically during the past 10 years and even more so over the past five years. In the past, B2B marketing relied heavily on telemarketing and lead generation, and B2C marketing depended heavily on advertising. However, both marketing approaches have changed—primarily due to the evolution of

There is no doubt that channel management is complex. (For more on this, see our previous posts, 5 Myths of Channel Management and Challenges of channel management.) However, it’s made more complex when it is managed through a set of tools and systems that can easily be compared to a patched-up quilt. In many organizations, channel management systems actually consist of a hodgepodge of diverse systems that have evolved over a long period of time. As a result of that, most companies today that try to implement a unified approach to their channel management struggle to make it work and get a decent return on their investment. The primary reason underlying this problem is a lack of available end-to-end systems that can readily adapt to each organization’s unique needs. Every company is different. So, for example, a horizontal product like a customer relationship management (CRM) system cannot really address the requirements for unified partner management. As a result of that—while marketing automation systems have evolved quite a bit over the last few years, and CRM systems have also progressed—no company has completely addressed the need for unified partner management.

So, how are organizations managing the channel today?

Partner portal: Most companies that are selling through the channel today have a partner portal. They build this partner portal over a period of years with various sets of tools, but there are no consistent standards that address how a portal should be built, and requirements also vary considerably across different types of channels. For example, if you’re looking at a dealer network where the relationship is highly transactional, the partner portal will look very different from a portal  in, say, the tech industry, where a solutions provider is working very closely with one or more technology providers to bring in complex, integrated solutions to the market. Similarly, a partner portal in the retail and franchise segment of the marketplace will be unique to those kinds of businesses. Because of this diversity in needs across segments, no vendor has been able to address the requirements for all segments.

Partner records: If we look at how most companies are selling through the channel, and in particular how they manage their partner records or their channel records, we find that most of them are using a CRM or some sort of home-grown database. In fact, based on a survey we conducted, more than 40% of companies actually end up managing their partner list on an Excel spreadsheet. That’s kind of scary, but that’s where the market is today.

Partner onboarding: When it comes to building and growing a channel, partner onboarding is a critical first step. Yet most companies today try to manage partner onboarding with some sort of combination of CRM and Microsoft Office tools like Excel, and some even resort to keeping track through paper records.

Partner programs: To manage partner programs, some companies have started to use marketing automation tools like Oracle Eloqua or Marketo for direct marketing. However, those tools are way too complex for most organizations and they are not flexible enough to be deployed in a multi-tier channel where corporate can load campaigns and content, and then distribute those materials to their partners and execute marketing initiatives in variety of shapes and forms.

Partner training is another area where very few companies have structured systems in place. But what’s the point of recruiting partners if you don’t have a structured way of getting them trained and increasing their competencies? Many large enterprises today have some sort of learning management system (LMS), but when you take a step down to companies below the $500 million level, or to companies that sell to other segments, they typically have serious issues managing partner training.

A final, and very important, area of concern is partner incentives management. This is yet another area where it’s quite commonplace to deploy a patchwork of multitude systems for managing market development funds, rewards, rebates, etc.

So, as we consider the challenge of unified partner management, we see that although companies may have the best of intentions in their efforts to pull together the right programs, the deployment and execution of those programs can be an absolute nightmare because there are no end-to-end systems that exist today to make it happen. However, companies like ZINFI and a few others are now working very hard to innovate with the goal of providing a complete, end-to-end, unified partner management infrastructure that can be not only modular but also comprehensive if all the modules are turned on and used in the right order.

If we step back and look at the problem from a systems perspective at a macro level and consider the core requirements of unified partner management, we can break it down into five parts, what I call the five Ps:

Profiles (partner profile management): Partner profiles represent the most important first step in understanding existing partners’ capability to sell into various segments of the market. Establishing the partner profile is also a precursor to expanding and growing the channel based on an understanding of what type of DNA an organization should be looking for when they are trying to recruit new partners. Without a sophisticated database system, it’s almost impossible to analyze and manage a diverse set of partner profiles to drive productivity.

Policies: Channel policies determine who will sell to what and how. Here’s what I mean: If a channel program has various types of partners, the competencies and reach of those partners, as well as the relationships they bring in, determine whether or not they are actually able to sell. If those policies are not absolutely clear, unified partner management becomes really hard because organizations won’t know what exactly to implement.

Programs: When we talk about programs, we’re referring not just to campaigns like partner recruitment and partner training, but also the ability to put together market-segment-oriented solutions, training, incentives and so on to provide a truly unified partner management framework that allows an organization to recruit, engage, enable and manage their partner base to achieve a desired level of growth. Programs are critical, but they need to be analyzed from an ROI perspective. A unified partner management system should provide the tools that an organization needs to quickly perform such an analysis.

People: This is one of the most important Ps. The structure of a channel organization—how the field organization is structured, how territories are mapped, how the relationships between the regions and the worldwide organization work—all of these factors contribute to the broader framework required for people management to drive performance. However, without the right structure and the right unified partner management system mapped into that structure, it’s almost impossible to move fast enough and see through a dashboard what is going on in real time.

Platform: This is where tools and systems come in. Earlier I talked about why platforms are important. However, before a company can deploy a truly unified partner management system at a global level, it must think through the first four Ps mentioned above. How are we going to manage our partner profiling and profiles? What actions are we going to take based on that understanding? Are there policies in place that need to be aligned or streamlined? And can we streamline policies without a channel management system in place? What programs makes sense, and what data do we have to analyze programs and dynamically respond based on ROI analysis? How can we align the people to look for the most efficient structure? Once these questions have been answered, we’re in a much better position to consider how to implement a system on a step-by-step basis so the organization is not overwhelmed but is able to systematically increase its maturity level through transparency and performance management globally.

Based on the points I’ve made above, you can see that unified partner management is indeed complex. However, with a thoughtful approach that focuses on the five Ps I’ve outlined here, an organization can create a maturity map through which they can substantially improve the performance of their channel organization by taking a unified approach to channel management and also deploy systems that will make unified partner management a reality.

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There is no doubt that channel management is complex. (For more on this, see our previous posts, 5 Myths of Channel Management and Challenges of Channel Management.) However, it’s made more complex when it is managed through a set of tools and systems that can easily be compared to a patched-up quilt. In many organizations, channel management systems actually consist of a hodgepodge of diverse systems that have evolved over a long period of time. As a result of that, most companies today that try to implement a unified approach to their channel management struggle to make it work and get a decent return on their investment. The primary reason underlying this problem is a lack of available end-to-end systems that can readily adapt to each organization’s unique needs. Every company is different. So, for example, a horizontal product like a customer relationship management (CRM) system cannot really address the requirements for unified channel management. As a result of that—while marketing automation systems have evolved quite a bit over the last few years, and CRM systems have also progressed—no company has completely addressed the need for unified channel management.So, how are organizations managing the channel today?Partner portal: Most companies that are selling through the channel today have a partner portal. They build this partner portal over a period of years with various sets of tools, but there are no consistent standards that address how a portal should be built, and requirements also vary considerably across different types of channels. For example, if you’re looking at a dealer network where the relationship is highly transactional, the partner portal will look very different from a portal  in, say, the tech industry, where a solutions provider is working very closely with one or more technology providers to bring in complex, integrated solutions to the market. Similarly, a partner portal in the retail and franchise segment of the marketplace will be unique to those kinds of businesses. Because of this diversity in needs across segments, no vendor has been able to address the requirements for all segments.Partner records: If we look at how most companies are selling through the channel, and in particular how they manage their partner records or their channel records, we find that most of them are using a CRM or some sort of home-grown database. In fact, based on a survey we conducted, more than 40% of companies actually end up managing their partner list on an Excel spreadsheet. That’s kind of scary, but that’s where the market is today.Partner onboarding: When it comes to building and growing a channel, partner onboarding is a critical first step. Yet most companies today try to manage partner onboarding with some sort of combination of CRM and Microsoft Office tools like Excel, and some even resort to keeping track through paper records.Partner programs: To manage partner programs, some companies have started to use marketing automation tools like Oracle Eloqua or Marketo for direct marketing. However, those tools are way too complex for most organizations and they are not flexible enough to be deployed in a multi-tier channel where corporate can load campaigns and content, and then distribute those materials to their partners and execute marketing initiatives in variety of shapes and forms.Partner training is another area where very few companies have structured systems in place. But what’s the point of recruiting partners if you don’t have a structured way of getting them trained and increasing their competencies?

There is no doubt that channel management is complex. (For more on this, see our previous posts, 5 Myths of Channel Management and Challenges of Channel Management.) However, it’s made more complex when it is managed through a set of tools and systems that can easily be compared to a patched-up quilt. In many organizations, channel management systems actually consist of a hodgepodge of diverse systems that have evolved over a long period of time. As a result of that, most companies today that try to implement a unified approach to their channel management struggle to make it work and get a decent return on their investment. The primary reason underlying this problem is a lack of available end-to-end systems that can readily adapt to each organization’s unique needs. Every company is different. So, for example, a horizontal product like a customer relationship management (CRM) system cannot really address the requirements for unified channel management. As a result of that—while marketing automation systems have evolved quite a bit over the last few years, and CRM systems have also progressed—no company has completely addressed the need for unified channel management.

So, how are organizations managing the channel today?

Partner portal: Most companies that are selling through the channel today have a partner portal. They build this partner portal over a period of years with various sets of tools, but there are no consistent standards that address how a portal should be built, and requirements also vary considerably across different types of channels. For example, if you’re looking at a dealer network where the relationship is highly transactional, the partner portal will look very different from a portal  in, say, the tech industry, where a solutions provider is working very closely with one or more technology providers to bring in complex, integrated solutions to the market. Similarly, a partner portal in the retail and franchise segment of the marketplace will be unique to those kinds of businesses. Because of this diversity in needs across segments, no vendor has been able to address the requirements for all segments.

Partner records: If we look at how most companies are selling through the channel, and in particular how they manage their partner records or their channel records, we find that most of them are using a CRM or some sort of home-grown database. In fact, based on a survey we conducted, more than 40% of companies actually end up managing their partner list on an Excel spreadsheet. That’s kind of scary, but that’s where the market is today.

Partner onboarding: When it comes to building and growing a channel, partner onboarding is a critical first step. Yet most companies today try to manage partner onboarding with some sort of combination of CRM and Microsoft Office tools like Excel, and some even resort to keeping track through paper records.

Partner programs: To manage partner programs, some companies have started to use marketing automation tools like Oracle Eloqua or Marketo for direct marketing. However, those tools are way too complex for most organizations and they are not flexible enough to be deployed in a multi-tier channel where corporate can load campaigns and content, and then distribute those materials to their partners and execute marketing initiatives in variety of shapes and forms.

Partner training is another area where very few companies have structured systems in place. But what’s the point of recruiting partners if you don’t have a structured way of gett...

As more and more companies add channel to their sales equation, the competition to reach the end user via channel has increased substantially. New partners enter the marketplace in the same way vendors do, but in the end what matters is having access to a group of successful partners who have been in business for a while. This is not easy without a structured channel management approach. That’s where automation comes in. Organizations need to pick the right channel management software platform, not only to make sure their go-to-market approach via channel is fully optimized and earns the respect of their channel partners, but also to substantially increase sales productivity.

With that as a backdrop, let’s look at some things to consider when selecting a vendor. It’s important to keep in mind that channel management software is a new category. While partner relationship management (PRM) software concepts and even tools have been around for more than a decade, until recently truly affordable solutions didn’t really exist. Also, PRM by itself does not address the full range of channel management challenges, but requires a complimentary solution that most analysts call today through-channel marketing automation (TCMA). So, for channel management automation to be complete, an organization needs to select the right vendor not just for PRM, but also for TCMA. This increases the complexity quite a bit, especially in light of the fact that not a lot of data exists about most of these vendors.

So what is the right approach in selecting a vendor for channel management software? That is exactly what we will explore in the five steps outlined below.

Select the right criteria for your organization. Before you can begin vendor selection, you need to think through your own channel strategy and objectives for the next three years. Is your strategic focus going to be primarily partner recruitment? Partner training? Partner enablement (like demand generation, etc.)? Managing the partners for maximum productivity? You may also have one or more objectives. Before you can begin to engage with a channel management software vendor, you truly need to think this part through. A channel management software vendor can help you execute your strategy better, but they cannot develop one for you. That’s your job, and it’s a very important step.

Plan your deployment in sequence. Once you have figured out what your priorities are, the next step is to make sure you plan the deployment of your channel management software in sequence. Why is this important? Before deployment you are likely to have a lot of manual processes in place, so ripping everything out at once could cripple your ongoing operations. Therefore, you need to make sure that your channel management software vendor does all installation work and maintenance work in a stepwise fashion—and before or after normal work hours—so you can integrate automation into your workflow one module at a time with minimal disruption to everyday business.

Define channel requirements three years out. Once your deployment plan is in place, the next step is to project where you want your channel management automation to go beyond the first year. In fact, you may be better off thinking through the first three years before you turn your focus to the first year. It’s not unusual for an organization to seek a channel management software vendor without having a clear picture of what their objectives are for the next three to five years. I realize that in today’s fast-paced business environment, five years may seem like a lifetime. But you should be able to articulate at least a one-to-three-year vision that establishes your channel management priorities. Are you going to focus on recruitment? Do you have plans for segmenting the partner base in multiple ways? Is there a specific geographical evolution that is going to drive your investment strategy? Are you planning a major product launch in the next 12-18 months? Once you have established a series of business objectives, the next step is to lay those out in deliverables and make sure your channel management software vendor has the capacity to scale along with your business needs. Too often, organizations will focus too narrowly on one specific, short-term objective, and once they have addressed it they struggle with their vendor, who it turns out doesn’t have the capabilities they really required and doesn’t scale.

Review the vendor’s roadmap. Once you have nailed down a three-year strategic vision for your organization, it’s crucial to review your vendor’s product roadmap to make sure it’s a good match. Most companies in the channel management software space are small, with 100 employees or fewer, and many have just a few dozen. When you are an enterprise buying software for your channel, the investment you’re making is quite critical. You need to be certain that the channel management software vendor you select has processes in place to continuously incorporate input from you and other customers to grow their feature sets. The channel management software segment today is highly immature. Certainly it is growing, but it’s still at an early stage, and there is no large, dominant vendor. Traditional players like Salesforce, SAP and Microsoft who have customer relationship management (CRM) offerings have not provided the appropriate tools and technologies to their customer base to build out purpose-built channel management software systems. As a result, there is a plethora of vendors that have evolved over the last decade or so, but only a very few—like ZINFI—are really growing globally. As you talk to prospective channel management software vendors, you need to make sure they understand what it takes to build enterprise-scale software—not just by offering a few cool features and functionalities, but by building out an organization that will scale with market requirements. In the early stages of a market, there can be a lot of merger and acquisition activity. When you are buying from a vendor that has recently bought two or three smaller competitors, be aware: They may have a hodge-podge of tools and systems in place that will be really difficult to scale. Don’t be fooled by an impressive-looking feature set. You need to dig deep to understand their roadmap and how they are likely to evolve, especially from an architectural perspective. If your marketing team doesn’t have the skillset to do this digging, engage someone from your IT team to carefully evaluate the vendor’s overall infrastructure and architecture.

Prepare to innovate against competitors by leveraging automation. Can your vendor realistically sustain the continuous innovation you need to compete? This may be the most important question to ask yourself. It’s one thing for a vendor to come up with an initial product idea or an initial set of features. But can they take the next step and grow an organization that can continuously innovate and deliver new feature sets? Can they truly support your evolving needs in this still-emerging segment of channel management software? Having innovation rest on the shoulders of a company’s founder or on one or two key individuals is quite risky, especially when you are depending on your channel management software vendor to support your enterprise channel management needs on a worldwide scale.

Channel management is complex, a point we have explored in detail in a number of earlier articles. However, if you take a structured approach in building the right set of criteria, planning out deployment, defining your organizational strategy over several years, carefully reviewing the roadmap of your channel management software vendor and making sure they have a structure in place to constantly innovate, you should be able to find a vendor who can not only address your near-term needs, but also lay the foundation for significant maturity and innovation opportunities in the future. In order to fully leverage the capabilities of channel management software, you also need to constantly think about how you’re going to drive your channel best practices. We’ve discussed this in a previous article, and we’ll continue to address how to best drive channel management maturity in future articles. However, if you already have a channel management software partner that listens to your needs, constantly innovates and builds out feature sets ahead of your needs, then you are very likely to be successful, not only in the near term but also in building a channel for the long term that is highly efficient and productive, and has the reach that you need to drive scale and efficiency.

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As more and more companies add channel to their sales equation, the competition to reach the end user via channel has increased substantially. New partners enter the marketplace in the same way vendors do, but in the end what matters is having access to a group of successful partners who have been in business for a while. This is not easy without a structured channel management approach. That’s where automation comes in. Organizations need to pick the right channel management software platform, not only to make sure their go-to-market approach via channel is fully optimized and earns the respect of their channel partners, but also to substantially increase sales productivity.With that as a backdrop, let’s look at some things to consider when selecting a vendor. It’s important to keep in mind that channel management software is a new category. While partner relationship management (PRM) software concepts and even tools have been around for more than a decade, until recently truly affordable solutions didn’t really exist. Also, PRM by itself does not address the full range of channel management challenges, but requires a complimentary solution that most analysts call today through-channel marketing automation (TCMA). So, for channel management automation to be complete, an organization needs to select the right vendor not just for PRM, but also for TCMA. This increases the complexity quite a bit, especially in light of the fact that not a lot of data exists about most of these vendors.So what is the right approach in selecting a vendor for channel management software? That is exactly what we will explore in the five steps outlined below.* Select the right criteria for your organization. Before you can begin vendor selection, you need to think through your own channel strategy and objectives for the next three years. Is your strategic focus going to be primarily partner recruitment? Partner training? Partner enablement (like demand generation, etc.)? Managing the partners for maximum productivity? You may also have one or more objectives. Before you can begin to engage with a channel management software vendor, you truly need to think this part through. A channel management software vendor can help you execute your strategy better, but they cannot develop one for you. That’s your job, and it’s a very important step.* Plan your deployment in sequence. Once you have figured out what your priorities are, the next step is to make sure you plan the deployment of your channel management software in sequence. Why is this important? Before deployment you are likely to have a lot of manual processes in place, so ripping everything out at once could cripple your ongoing operations. Therefore, you need to make sure that your channel management software vendor does all installation work and maintenance work in a stepwise fashion—and before or after normal work hours—so you can integrate automation into your workflow one module at a time with minimal disruption to everyday business.* Define channel requirements three years out. Once your deployment plan is in place, the next step is to project where you want your channel management automation to go beyond the first year. In fact, you may be better off thinking through the first three years before you turn your focus to the first year. It’s not unusual for an organization to seek a channel management software vendor without having a clear picture of what their objectives are for the next three to five years. I realize that in today’s fast-paced business environment, five years may seem like a lifetime. But you should be able to articulate at least a one-to-three-year vision that establishes your channel management priorities. Are you going to focus on recruitment? Do you have plans for segmenting the partner base in multiple ways? Is there a specific geographical evolution that is going to...

As more and more companies add channel to their sales equation, the competition to reach the end user via channel has increased substantially. New partners enter the marketplace in the same way vendors do, but in the end what matters is having access to a group of successful partners who have been in business for a while. This is not easy without a structured channel management approach. That’s where automation comes in. Organizations need to pick the right channel management software platform, not only to make sure their go-to-market approach via channel is fully optimized and earns the respect of their channel partners, but also to substantially increase sales productivity.

With that as a backdrop, let’s look at some things to consider when selecting a vendor. It’s important to keep in mind that channel management software is a new category. While partner relationship management (PRM) software concepts and even tools have been around for more than a decade, until recently truly affordable solutions didn’t really exist. Also, PRM by itself does not address the full range of channel management challenges, but requires a complimentary solution that most analysts call today through-channel marketing automation (TCMA). So, for channel management automation to be complete, an organization needs to select the right vendor not just for PRM, but also for TCMA. This increases the complexity quite a bit, especially in light of the fact that not a lot of data exists about most of these vendors.

So what is the right approach in selecting a vendor for channel management software? That is exactly what we will explore in the five steps outlined below.

* Select the right criteria for your organization. Before you can begin vendor selection, you need to think through your own channel strategy and objectives for the next three years. Is your strategic focus going to be primarily partner recruitment? Partner training? Partner enablement (like demand generation, etc.)? Managing the partners for maximum productivity? You may also have one or more objectives. Before you can begin to engage with a channel management software vendor, you truly need to think this part through. A channel management software vendor can help you execute your strategy better, but they cannot develop one for you. That’s your job, and it’s a very important step.

* Plan your deployment in sequence. Once you have figured out what your priorities are, the next step is to make sure you plan the deployment of your channel management software in sequence. Why is this important? Before deployment you are likely to have a lot of manual processes in place, so ripping everything out at once could cripple your ongoing operations. Therefore, you need to make sure that your channel management software vendor does all installation work and maintenance work in a stepwise fashion—and before or after normal work hours—so you can integrate automation into your workflow one module at a time with minimal disruption to everyday business.

* Define channel requirements three years out. Once your deployment plan is in place, the next step is to project where you want your channel management automation to go beyond the first year. In fact, you may be better off thinking through the first three years before you turn your focus to the first year. It’s not unusual for an organization to seek a channel management software vendor without having a clear picture of what their objectives are for the next three to five years. I realize that in today’s fast-paced business environment, five years may seem like a lifetime. But you should be able to articulate at least a one-to-three-year vision that establishes your channel management priorities. Are you going to focus on recruitment? Do you have plans for segmenting the partner base in multiple ways? Is there a specific geographical evolution that is going to drive your investment strategy?