Category Archives: Small and Medium Business

The Chief Partner Officer

After selling my technology-focused agency in 2008, I took some time off from IT in order to explore other business ventures.  About a year ago, craving the adrenaline of the technology industry, I returned.  Much to my shock, not much has changed.

Don’t get me wrong, technology clearly advanced while I was away and innovation, a hallmark of our industry, continues stronger than ever.  Oh yes, and there is the ubiquitous “cloud” and all the disruption that’s caused.  But from a channel management perspective–how we engage with, motivate and support channel partners–it’s business as usual.

I believe now is the time for change. After thinking about it for a long while, I declare that I’m running for the office of Chief Partner Officer (CPO).  To change the status quo of channel management, my platform as the CPO within a technology vendor is as follows:

  • I will use my small business skills, expertise and success to help channel partners systematically improve their businesses
  • I will focus on the channel partners’ businesses and not my company and its products/services
  • I will not only suggest changes, but will have an on-going, business relationship with my channel partners to ensure they make change happen
  • I will have my channel partners’ best interest in mind because I know their success means success for my company
  • I will not carry a quote as a measure of my channel partners’ success or value to my company, but rather be evaluated on the year-over-year percentage growth of my channel partners’ businesses
  • I will have a confidential relationship with my channel partners so that honesty and transparency are the cornerstone of our relationship

As it was before my IT hiatus, so it is now:  most channel partners fail or do not grow adequately due to common business challenges.

For many of the mid-sized and smaller channel partners that typically constitute 45% of a vendor’s channel ecosystem, they are but one bad business decision away from disaster.  Or worse yet, they don’t make the investments to improve or grow their businesses for fear of a disaster.

Hiring, firing, marketing, financial discipline and organization, sales, collections, social media, customer management, growth, payroll, cash flow are a lot of any small business owner to navigate.  However, for our channel partners, the stresses of business are further compounded by the rapid change of technology and vendor policies and procedures.  Often channel partners find themselves alone to face these challenges, with little support from the key vendors on which they’ve built a business.

The vendor’s response?  The infamous channel manager.  An individual whose only interest in the partners’ success is tied to his/her quota.  And, more times than not, a person who’s never owned or operated any type of business.  All too often channel managers are fresh out of college, naively trying to impose finance 101 theories on partners.

For those channel partners who commit to a vendor, they deserve more than a channel manager, some airline miles and sporadic MDF.  Partners are the foundation of any technology vendor’s business.  If valued and properly supported, channel partners will grow their businesses and by default that of their top vendors.

Harsh?  Radical?  Some may think so.  As for me, I believe the time of the CPO is now.  Do I have your vote?

Through a Channel Partner’s Eyes

A couple of weeks I had the privilege of leading a workshop at Channel Focus, a premier technology conference organized by my good friends at Baptie and Company (www.baptie.com).   The title of my session was, “Through the Eyes of a Partner – What Do They Want from a Channel Account Manager?”

When I was offered the opportunity to speak, I had to think a bit about the subject matter. While Channel Focus is a technology conference, the topic really lends itself to any industry. Given my business experience in multiple, non-technology industries, I reflected on the topic from a business perspective. What would I want form anyone calling on me?

As a business owner, I’m not asking for too much by expecting my account manager to:

  1. Selectively drink the company Kool-aid
  2. Understand the market
  3. Understand my business
  4. Care about my customers
  5. Fight for me
  6. Have key personal attributes

Selectively Drink the Company Kool-aid

  • Your marketing department is paid to make your company look good–your company is not good at everything
  • Be honest with me and my staff about what your company is good at and what you suck at
  • Help me sell the positive and around the negative
  • I know this business and industry pretty good—don’t insult my intelligence

Understand the Market

  • Provide insights into where the market is headed and how my business can capitalize on those trends
  • Know complimentary vendors and partners and how they can help me make more money and service my customers better
  • The competition: what they do well and areas where I can beat them…the real truth
  • Know the behavior of the customers I target—i.e., what, how, why, when and where do they buy

Understand My Business

  • It’s margin, not revenue, that matters to me
  • Profitability, not selling, is paramount
  • I have limited resources: cash, people and time
  • Don’t tell me what you learned at Stanford Business School, if you never ran a business
  • Do you know what a P&L and balance sheet are?
  • Customize company plans/objectives to match my business model

Care About My Customers

  • Go on joint sales calls with me
  • It’s my customer…let me lead and be supportive
  • Coach me: the good, bad and ugly
  • Always keep me in the loop when communicating directly with my customer…better yet, communicate through me
  • Help educate my customers on the benefits of the technology and not the features
  • Let the customer know that you have my back…and theirs

Fight for Me

  • Have the authority to get things done and use it when needed
  • Help me gain access to your company’s resources and people that can help my business
  • Showcase me and my business
  • Get me special pricing/terms when I really need it
  • Don’t carry a direct quota

Have Key Personal Attributes

  • Be easy to do business with and remove your company-imposed friction
  • Available and responsive
  • Take ownership and responsibility and be truly objective
  • Solve problems just as enthusiastically as you sell
  • Integrity and transparency
  • Be an expert at something that helps me
  • Anticipate next steps, be proactive
  • Lead by example, don’t ask me to do what you can’t or don’t want to do

Bottom line, help me sell and make money by selecting or specifying your products over the other alternatives available to me in the market.

Being a channel manager is not an easy proposition. A good channel manager is a combination of sales, business development, account, alliance, marketing and product manager. But a good channel manager can make all the difference for your company and to your channel partners.

From 1 2 10

I love my mechanic, Tomas. He was the former head mechanic at a major dealership here in South Florida. A few years ago, Tomas ventured out on his own. Specializing in German performance cars, Tomas employs his wife, son and an additional mechanic. The shop is small and customers come from all over South Florida due the family feel and excellent, reasonably priced work.

The other day, I asked Tomas why he did not expand into the bay next door and grow the business. His response, “Hell no, who needs the headaches!”

Sounds like Tomas has it right. But, there is a major trade off when it comes to a “lifestyle” business.   In return for long hours, the owner makes a good living. There is food on the table; nice cars; and the kids attend good schools. There is nothing wrong with a lifestyle business. There are millions of lifestyle businesses. Just look your own neighborhood–the barber, the local cleaners, the corner bakery.   However, for the most part, one will never retire rich.   Tomas consciously made this decision.

I don’t know what Tomas’ business grosses. But my guess is just shy of $1 million annually. In my opinion and experience, it’s not hard to grow a business from zero to $1 million. Yes, you read that correctly. With the assumption that you have a product/service that somebody wants, growing a business to $1 million can be easy because:

  • With a limited set of customers, every customer can be made to feel special
  • Small number of employees, most of whom are known before being hired, makes it easier to deliver better products and services
  • Any process or procedure can be adjusted, corrected or implemented immediately
  • Employee’s tend to work harder and smarter because there is a real connection with the owner and the business
  • The owner has the pulse on every aspect of the business
  • Cash flow issues, when they surface, are usually covered with personal funds or a personally guaranteed credit line.

But what if you want more? What if you want to grow your business to $10 million or more? To do so, you need SCALE:

  • Sales – When you are a small business, customers came to you. With great services and products and possibly a pricing advantage due to your small size, “word of mouth” and referrals drive sales. This all changes as you try to grow the business. Many times the owner is forced into a business role that he/she is not comfortable with. As growth continues, the business requires sales people to fuel revenues.
  • Cash – With growth comes the potential for major cash flow issues. For example, payroll is due and there is not enough in the bank to cover. Most small business fail due to lack of access to cash. Securing credit lines or other sources of cash for working capital is critical to growth.
  • Automation – To grow, delivering customized services and products becomes a challenge and introduces more cost into the business. Wherever possible, manual tasks must be automated. Likely for the first time, the business faces a major investment in information technology.  Documented processes and procedures are critical.
  • Long-Term – There are many moving parts to a growing business. Many times investments are required today in order to grow revenues, deliver better products/service or reduce costs in the future. Often relegated to large corporations, annual planning, quarterly reviews and monthly financial reporting must become part of the business.
  • Employees – As you grow, you need to hire more and more employees. Now, more complex human resources challenges come into play–attracting quality candidates, competitive wages, benefits, background checks, terminations–becomes a major business priority. This complexity takes greater hold as many state and federal employee and safety laws begin to apply. And one bad termination can lead to a lawsuit , which can be the ruin of the growing business.

I’ve had the fortune of starting and selling two businesses, the last of which employed over 125 employees. Growth is a decision. From initiation, we made growth a priority for the businesses. This meant that everything we did was with SCALE in mind, from the types of services we provided to the kind of customers we wanted. Although very hard at times, sticking to SCALE allowed us to grow the businesses and ultimately sell them at a very nice multiple.

To Market or Not to Market, That’s Not the Question

Earlier this year, I had the opportunity of speaking at the Baptie Channel Focus Conference, an event that features the IT and telecom industries’ most effective channel sales and marketing strategists. I was a speaker at one of the very first Baptie conferences, held many, many years go. And through the years, I’ve continued supporting the conference as a sponsor (via an agency I owned), speaker or both.

As part of the conference, attendees participate in sessions that address some of the industry’s most pressing topics; I sat in on the workshop regarding how channel partners can better market manufacturer products and solutions. Recalling, it seems to me that this very topic has been an agenda staple nearly every single year.

During the session, I asked those in attendance how many had actually owned a small business? Of the 30+ attendees, comprised mainly of major IT manufacturer representatives, can you guess how many actually ever owned a business? Well, besides myself, none! Yup. Not a single person had ever experienced what it’s like to own a small business–i.e., find customers, invoice, collect, pay bills, hire, fire and meet payroll. Oh yea, and do some marketing with the time and energy left over.

To be clear, this is not an IT industry issue. We see this across all our customers in the various industries we work in. Manufacturers are manufacturers and the channel is the channel. But one thing is clear, the vast majority of those “channels” are very resilient, small business owners. They’ve built a business on hard work, savvy and pure determination. Call them VARs, MSPs, Retailers, resellers, SIs or whatever, their drive and desire amazes me. Compared to the trials and tribulations of a channel partner’s reality, being a channel/sales representative for any type of manufacturer is a walk in the park!

So why don’t channel partners do more marketing? Is it because marketing is so complicated? Is it because they can’t possibly understand what it takes to find new customers? Is it because Twitter, Facebook or Instagram is only for young people? Hell no! It’s simply a matter of time and priorities. Once you understand what it takes to run a small enterprise, it’s easy to understand why marketing mistakenly takes a back seat to just about any other activity for the business.

So, the age old debate rages on: It is the responsibility of the manufacturer or the channel partner to drive demand? In my opinion, it’s the responsibility of the manufacturer. With fat margins and as the owners of the brand, it’s unfair to put the responsibility of demand generation squarely on channel partners. Now, this is a blanket statement.

The reality is that partners that do marketing and create or seek out opportunities as agnostic “trusted partners” do drive better margin opportunities, especially with services they provide. Waiting for manufacturers to do this for them, puts partners in danger of lower margin business and at the mercy of manufacturer leads, which are typically poor. So with good reason, there are channel partners who can and will drive marketing efforts, but this should not be the expectation of manufacturers.

Manufacturers can deploy all the channel partner marketing portals they want. They can continue to throw MDF/Co-op funds at the issue. And, they can continue to hope that the average channel partners will somehow become great marketers overnight. But, the reality is that on a daily basis, marketing does not even register as a top-10 activity for the vast majority of small business owners. It’s not that they can’t or don’t want to market; it’s simply a matter of time and priorities.

So, the next time I hear complaints about a partners’ inability to effectively market, I want that manufacturer’s employee to think about having to meet payroll with not enough money in the business bank account. How’s that for perspective?

Using Video to Promote

It’s  evident that we’ve become a visual society.  You need look no further for proof than the popularity of YouTube, Instragram and the proliferation of videos on Facebook.  It’s natural that with so many communications channels and the resulting noise, customers want things “netted out” for them, which is where video hits the spot.  To effectively promote your business, video is no longer a luxury; it’s a must.  But it’s not just about videos; it’s compelling content delivered via the video medium that matters.  Click here to read the rest of the post.

Seven Social Media Tools You Should Be Using

In today’s world social media is not a luxury.   There is no other marketing vehicle as critical to the success of a small or medium business as the consistent and effective user of social media tools.  The challenge is that a social strategy usually does not yield immediate results, which brings the challenge of “sticking with it”.  To make it easier to implement and execute your social media strategy, these seven tools are a must.  Click here to read the rest of the post.