Your goal is to sell products that deliver value to your buyers. The buyer’s goal is to find and purchase a product that improves their security, or one that offers an equal level of security at a reduced total cost of ownership. You need a partner that can marry these two goals to the benefit of everyone involved. There is no shortage of performance indicators that you can examine to determine a partner’s viability. Start with the basics: financial stability and yearly revenue and then move onto evaluating other aspects such as the mix of products and services. In my next blog post I will cover how you can engage with partners once you sign them to align synergies and increase your mutual chance of success. In this post we will look at how the product mix that a reseller partner offers can help determine their suitability as a reseller for your solution.
Previously I showed how a partner's ability to deliver services can show the level of trust a partner’s customers have in them. Along with selling services, we also need to be sure a partner can sell a product solution to those same customers with a sales team that will do your product justice. Unfortunately, companies often give partner selection little more thought than telling their staff to start signing up the largest channel partners in their area, which creates a race to sign up as many channel partners as possible. Often the partner sign-up process is begun even before there is an understanding or agreement on what makes a good partner, what makes a successful partner, and how you can assure a partner’s success. If these fundamentals are not in place then you may end up wasting resources signing up many partners who do nothing, or only generate a single sale. It takes just as much effort to sign up an unsuccessful partner as it does a successful one so put the effort in on the front end! Upfront effort also allows you to be sure of alignment across the organization so that resources spent on items such as the right channel managers and the right marketing plan are in place.
I referenced Richard Stiennon's recently published book, Security Yearbook 2020 in Part One to illustrate the amount of product choice buyers have available to them. Not only are buyers bombarded with choice, but the messaging used is so generic that the buyer needs to spend a considerable amount of effort just to determine if the message might be relevant to them and their needs. In Richard’s book he lists 373 of the 2,336 security vendors that fall into the Network Security category. While this category name implies the solution operates at the network level what more does it tell you? A Firewall and a Secure Email Gateway are not the same things, but they are in the same category. This problem extends across categories as well. Many vendors use similar or related messaging, further muddying the picture. Walk through the vendor area at any security trade show and you will see terms and phrases that make it difficult to impossible to determine which of Richard’s categories a vendor belongs in or what the overall value of their product is. If a buyer cannot place your product into a category, then how can the buyer understand the potential value your product brings to their company? The right partner can help.
Partners must be able to place your product into a category that they understand. For a partner to have an impact on your sales, their product and service offerings must also line up with your product and the target market (e.g. company vertical, company size) that your company has selected. Partners who sell compliance services, along with endpoint agents to regional dentists, will be a weak go-to-market partner for a solution that is sold to the networking department at medium to large enterprises. Market verticals can have specific purchasing requirements a partner must be aware of, for example, the healthcare industry has HIPAA. Additionally, the size of a buyer’s company can mean more, less or different steps in the overall purchasing process. You need partners with experience selling to the same verticals and company sizes, ideally also to the same buyers in those companies as is required for your solution. Without this experience the partner could inject delays in the purchase process or worse, such as turn a closed-won deal into a closed-lost deal.
Along with who a partner sells to, what they sell to their customers is key. Partners can sell a broad range of security solutions; they are more valuable as a partner if they have demonstrated success in solution categories that overlap with your own product category. Customers purchase the technologies where they can understand the value the quickest, not necessarily the solution with the best value! A partner’s salespeople can more quickly impart the value of your solution if they have sold similar solutions in the past, so overall a partner with overlapping experience in your solution category can more efficiently and with greater confidence, sell your solution. For example, a partner who focuses on selling endpoint solutions and services would be less equipped to sell a network-based solution.
A partner's ability to sell each solution category is not the only indicator of their value to your company. You also need to look at the number of solutions offered in each category and the number of categories. Does the partner sell a handful, a dozen or fifty plus security technologies? A partner selling too few technologies is unlikely to be able to deliver the customer traction that you need. They simply do not have the experience selling security broadly into their customer base. Too many security solutions, and you may have a partner that is merely looking to take orders. Partners with a large menu of security technologies will have a large customer base and may only be looking to take orders (hence the large selection) vs. proactively selling a new solution or new company into their customer base. Much like Goldilocks and the three bears, we need just the right number of security solutions to have demonstrated success, but not so many that the partner's sales team would have difficulty adding a new offering to the mix. Without this fit, their sales team is unlikely to significantly increase your sales without a lot of heavy lifting, sales spiffs and marketing dollars spent!
Let’s put this into perspective with two real world examples. One company I know sells a security solution that works with cloud-based solutions. They are actively signing up many partners each quarter. The signed partners are currently selling primarily IT solutions to smaller companies. Most of these signed partners are placing only a single order, which usually occurs right after their signup. The partners have good relationships with each of their customers, but they are not well-versed in security. This tells me that the partner is signing up with your company just to place an order on behalf of their customer, and not recommending the solution to their customer base successfully.
My second example comes from my own experience. I examined the number of security technologies that each one of our partners sold and I compared it to how many deals each partner completed for us. Many partners sold fewer than five security technologies, most sold between ten and twenty, and the rest sold more than twenty—one partner sold sixty-five different security technologies! The partners that were the most successful were the ones that had between ten and twenty technologies. They could evaluate a customer’s needs and then recommend one to two vendors in each category for the customer to choose from. Those with fewer than five security technologies have a very similar success rate as my first example from above. I’m sure you have figured out that the partner with sixty-five security technologies was not overly successful. They did not have as many deals as the middle group and barely closed more deals than partners with the fewest technologies.
Price is the biggest issue I recognized when analyzing sales data from partners who sold many security technologies. I noticed that partners who had a large selection of products appeared to be hedging their bets. They wanted to have all the top vendors in a category, assuring success for them in the deal regardless of the product vendor the buyer ultimately selected. For example, when next generation endpoints became popular, resellers (some…not all) were sure to carry Cylance, Crowdstrike, Carbon Black, SentinelOne and possibly a few others. They did not necessarily promote one over the other, but instead would let the customer make the choice. Sometimes resellers with a large selection will promote specific vendors. This is usually due to personal relationships, or the security vendor offering specific sales spiffs. I found that when this happens the sale becomes less about product value fit and more about price, thus driving down the average sales price.
You can be successful working with larger vendors. Many of the larger vendors are great to work with, you just must be aware of what you are getting into and make sure you are prepared to work with them. You need to put in place the processes to work around these issues. You need to make sure your partner program is fully ready to enable them and support them or you may fall victim to a partner who sells a competing solution simply because that company offered the most spiffs. Partner enablement is what I will be covering in the next part of this blog series.