What is up PartnerUp!
In this action-packed episode, Isaac Morehouse sits down with the brilliant Jay McBain, Jonathan Deveaux from ComforteAG, and Jared Fuller. They cover everything from reviving partner programs to debating the 80-20 rule in partnerships.
Your top partnership challenges will be addressed, including reseller partner recruitment, aligning targeted customers, and getting channel managers and partners on the same page.
We also clear up some misconceptions about resellers and the value they provide to customers before, during, and after the point of sale. Our experts discuss the shift from resellers to non-transactional partners in the SaaS space, co-innovation, and the fascinating fact that security deals often involve seven layers.
This episode is packed with insights to help you understand the role of resellers in the economy and tech space. We even touch on what motivates resellers and how to make sure your messaging is effective.
Finally, we share strategies for navigating the noise and clutter of the tech industry while finding the right partners. From the importance of a grassroots approach to breaking through the noise to learning about the six vectors of influence, this episode is a goldmine of insights.
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Full transcript:
Isaac Morehouse:0:10
What is up? partner up. Hey, this has been insane. A few weeks I moved down to Florida, so Jared and I are in close proximity. The next step is working on an actual in person studio. That might be a little bit away, but in the meantime we at least get some time working together face to face. I have faster internet now. I'm not out in the middle of nowhere, so my you know uploads don't take an hour and a half after the show, so that's great, but we are all over the place this week and we did not have time to record a fresh convo. We had some rescheduling, but I'm here to promise you, to commit to you the reader, the reader, the listener and hopefully the reader of the partner hacker daily. If you haven't signed up, go to partnerhackercom and sign up for the partner hacker daily. It's free and it's awesome. Great accidental segue Isaac, i am here to commit to you. We are making our weekly recording time sacred once again, as it was last year, and going to continue to roll fresh episodes, great interviews, all kinds of content. Hit us up. Go ahead and just email me, isaac, at partnerhackercom or LinkedIn or whatever. Any guests you'd like to see or topics you'd like to see covered on the show, would love to hear from you. Always love hearing from listeners. You guys and gals are amazing. So this week we are going to roll a really great event that we just did with Magentrix And we had an amazing conversation with three different people Jay McBain, jd DeVoe from Comforte AG And, yes, i pronounced it right this time because I pronounced it wrong twice. In the event itself. We're going to run our own, jared Fuller, and we really dive into how to revive and incentivize a program, and then we get into a little bit of a debate about the 80-20 rule in partnerships. Should you ignore your bottom 80% of partners and focus on that top 20% or not? So we will bring you fresh interviews ASAP. In the meantime. This is a killer event. I hope you enjoy it And we look forward to seeing you on the next episode and all over in the socials at the events We'll be at Catalysts coming up later on in the summer. We'll be all over the place as usual. Look forward to hearing from you. Until then, keep reading the partner hacker daily. Keep listening, enjoy the episode. Hello, hello, everybody, welcome. We got a bunch of people here already. A bunch more people popping in. Welcome to how to increase partner engagement and grow partner pipeline by 26%. That's right. If you do what you hear about today, you will grow your partner pipeline by exactly 26%, not 25, not 27. I love very specific numbers. They're great. When you're a marketer, you always want really specific numbers. 25 is not believable. 26 is what we're talking about here. Really excited to get this session going and talk about specifically JD over at Comfort. Jd DeVoe is going to talk about how they re-engaged a lot of their partners and got them clicking. But we're going to open up. We're going to start it with Jay McBain And the session I'm doing with Jay was actually pre-recorded. So you will notice suddenly my background and my wardrobe changes. That's because we had to pre-record this. Jay couldn't be with us live for this. So we have a session with Jay where we're going to jump in. I love the emojis. By the way, anyone who has ever done any of these partner hacker events that I've been a part of knows that I need emoji reactions or I start to feel really insecure. So keep them coming. That's the feedback for me. There we go. I love it. So before we jump in with Jay, we're going to have a couple of poll questions, a couple of questions in the chat throughout. So I want to start. We have a poll. Hope you can make that poll live. I want to know what CRM everybody is using. So that's the first poll question. We'll have some more fun, playful ones coming up as well. And then I want to ask in the chat Just answer in the chat What is your top challenge in partnerships? I really want to hear like just your top challenge, just number one. I know there's a million challenges and it's like you know, partnerships is like doing 10 different jobs at once. I didn't even pick, but just right now, just today, what is your number one challenge in partnerships today? Maybe I'm catching on a good day or a bad day. So here we go. Reseller partner recruitment. Nelly, you're in the right place. We're going to talk all about resellers and some of the successes that JD had. Yeah, absolutely. Hubspot and Salesforce, jared, yes, i am also one of those. Hubspot and Salesforce Aligning targeted customers, launching okay. Getting channel managers and channel partners on the same page, getting the attention of the biggest SI's. That's interesting, john. In Jay's session he's going to talk a little bit about how do you go find those partners. How do you get those? How do you get their attention? Where do they live and how can you get in front of them? Getting more resellers Yes. Reseller partner recruitment Yes, y'all came to the right place. I say y'all. I'm from Michigan, but I've lived in the South for like 15 years, so y'all has happened to me. What can I say? Again, i guess it's better than Yins. Do we have anybody from Pittsburgh here, any Yinsers? That one's got to be the worst. Y'all seems elegant by comparison. Okay, enough throwing shade, we got some great, great stuff in here. Driving revenue via referral partners Yeah, driving revenue, it sounds like. Here we go. Here are our themes How do I get more partners, how do I get those partners active And how do I get them to drive revenue? Very good problems, very logical problems to have, especially in this market. It's not enough to just have a bunch of partners just for the heck of it. We got to be driving results, so excited to get into this. Okay, pittsburgh, pittsburgh is the best. I'm throwing shade, but I actually really love Pittsburgh. Time to revenue as well? Okay. So the poll oh, i got to vote on the poll as well. Okay, there we go. I hope that'll. Let me see the poll results. We got actually a lot of HubSpot in here. You know that, actually, that goes along with the theme of a recent partner up episode about HubSpot is coming to eat sales versus lunch. They're coming, they're coming. All right, i am going to share my screen and play the pre-recorded session with Jay McBain. Before I do, though, i got to shout out the reason we're here. This event is brought to you in partnership with Magentrix, partner Hacker and Magentrix doing this event together. The reason we're doing this event together is because I don't know if you've noticed if not, you should follow them. Magentrix has been putting out a ton of awesome content on enablement and engaging partners Just recently. It's been just like hit after hit after hit Getting those partners engaged, enabling those partners a lot of the questions and challenges you mentioned in the chat. Magentrix has just been hitting you out of the park. We thought it was a perfect combination to come together and talk about how to do that how to re-engage, engage and re-engage and incentivize your partners to actually help you drive revenue. A huge shout out to Magentrix for putting this event on with us. With that, we're going to turn to Jay McBain and we're going to start at a high level Talking specifically about resellers, because JD, who we're going to talk to next, and then Jared will come on for the final session as well JD, their program at Comfort is primarily reseller program. We're going to get into the weeds of how they activated and reactivated those partners. Jay McBain is going to set the stage at the 30,000-foot view about resellers, the role that they play in SaaS and how that role has been evolving over time. Here we go, sharing my screen and we should be good to go. Jay McBain, the partner prophet himself. I want you to help us get a sense, for how big are we talking about? What is the impact of resellers on the economy as a whole? Then we can drill down a little bit into the SaaS space in particular and others You mean like the lowdown on resellers. What are some of the high-level facts and data you have about the role that they play and maybe where that's trending?
Jay McBain:8:59
Yes, absolutely, We're going to talk about the tech space here but, we know that 75 percent of world trade goes indirectly. A car dealership is a reseller. Retailer of TVs is a reseller. We know that a grocer is a reseller. Every part of your life connects to resellers, but in the tech space it's really large. 73.3 percent of the $5 trillion that businesses and government spend on tech goes in and through and around resellers. It's a very big part of the market. There are over a half a million companies out there around the world that collect money on behalf of customers and then on behalf of the vendors. There's distributors that sit in the middle. It's a really big market and it's one that's been around really for just north of 40 years.
Isaac Morehouse:9:51
What do most people get wrong or misunderstand about resellers? Because when I hear resellers, i don't think SaaS. This is something that people talk about partnerships in SaaS and there's integration partners and solution partners and maybe there's some referral partners. Does the reseller segment? is that relevant to SaaS companies?
Jay McBain:10:17
I think the thing that most people get wrong is resellers are more value added resellers If you heard the word VAR and then what does that value actually provide? Because in the modern partnership ecosystem space we talk a lot about the 28 moments that come before vendor selection. We talk a lot about the procurement area and all of the assistance required at that point. Then, obviously, in subscription consumption, every 30 days after that. In the traditional sense, resellers have always shown up before the point of sale, during the point of sale and after the point of sale. In the olden days it wasn't to get a renewal, it was to get them to buy your product again three years later and obviously keep customer satisfaction. But it wasn't defined as such. But resellers do all of those motions, but they're defined by their ability to collect money on behalf of a vendor.
Isaac Morehouse:11:12
When we talk about.
Jay McBain:11:13
SaaS, for example. There is a reason we don't talk about resellers first, because only 20 to 30 percent of global SaaS today is resold. A lot of that, by the way, is more traditional, like Office 365 and some of the more bundled solutions in the past, like Adobe solutions and stuff that now become subscriptions, sold through the same partners that used to sell the boxed software, licensed software. The modern SaaS stack, like big companies like Salesforce, is pretty close to all direct other than parts of Asia Pacific. They're going to grow about 10 percent over the next few years. Indirect, but the point is they got to a company size bigger than SAP, more valued than Oracle, by selling direct. But at the same time they're recruiting 500,000 partners, not resellers per se, but obviously partners that participate in that customer journey. Then other companies ServiceNow, workday, marketo, netsuite, all across the platforms. We don't hear a lot about resell to these new buyers, cmos and CROs and stuff like that. It tends to go through marketplaces, it tends to go direct and things like that. That's the once in a generation shift that we're going through right now between resell and more non-transactional partners. We're trying to disconnect all the value of partnering from that point of sale where it's been really positioned for 40 years to the point of value and hundreds of points of value that a partner provide along the way. If we can do that at scale, now we have a more full view of the partnership ecosystem.
Isaac Morehouse:12:57
Is that adding friction? I'm thinking from the customer standpoint of if I've got a service provider coming to me and they're helping me set some stuff up and then they're like, okay, now you have to go buy these three things. Is there a chance for maybe some of these SaaS products to go that bundled route a little bit more or at least say, hey, here's this bundle and you're going to get one year of this and one year of this and whatever. Then maybe after that year is up, the renewals are done directly. Have you seen anything moving in that direction, or do you think that this separation of the transaction from the partnership is here to stay?
Jay McBain:13:36
Well, I think it's here to stay. So we don't really call it bundles, We call it more layers. The average infrastructure deal today, for example, in the cloud, is seven layers on average. That's what a customer will buy. Not only do they buy from AWS or Microsoft or Google or Elibaba, they'll add security and compliance and data and automation and maybe some AI and other things to create a seven layer stack. The exact same thing happens in SaaS. The average app exchange deal at Salesforce is seven layers deep. The average HubSpot deal is seven layers deep. There's 11,039 ISVs in marketing that can wrap around HubSpot. So the average solution is seven layers. It's not exactly called that a bundle, but it calls you know, that's kind of the co-innovation answer to solve the customer's problem. And so in this world and the average security deal, by the way, is seven layers deep. So I don't want to broad stroke all of SaaS because all of the security and there's 4,300 security companies that sell through a SaaS model, but 78% of it is sold indirectly, Unlike the 20 to 30% of other SaaS security is almost all through the channel.
Isaac Morehouse:14:46
And if you're one of those companies What makes that why? What's unique about security that makes that so much more attractive?
Jay McBain:14:52
Well, first of all, security is sold to an IT buyer. 75% of SaaS today is actually sold outside of IT. A sales buyer buys a CRM. a marketing buyer buys marketing automation, a customer success buyer. So they all buy HR, operations, finance, they buy their own software and they build their own stack of seven layers and they're business managers. but they're spending 51% of their time now on tech. So whatever line of business they're in is takes up less than half their time. now They're really building tech stacks and the IT department acts like the federal government, kind of the compliance, the kind of the regulatory, the governance, the security, everything wrapped around it to make sure that we're not siphoning off customer data or have exposures in that stack, because we can't expect a marketing leader to be a deep expert in security. So when the IT buyer or in a bigger company, as CISO, a CTO, a CDO, others get involved as part of the committee, they start injecting their intelligence. but forever, for 40 years they bought their servers, they bought their PCs, they bought their firewalls, they bought everything, their networking, they bought it indirectly. So that's the motion that they favor, based on history, whereas the new buyers, i mean they don't have any legacy way and they would rather go in, and in a couple of years the majority of buyers are gonna be millennials, so digital first. they're in a marketplace, for example, piecing together those seven layers themselves, and they're okay with transacting in that way.
Isaac Morehouse:16:29
So let's say you are a company in the IT InfoSec space and you have a I don't know kind of like a small early stage partner program. Who are some of the role models you would look to? If I'm running that program and I'm saying, okay, we really gotta work this out, if in my industry 70% is being sold in this way, how do I get this off the ground? Who am I looking to as the role models?
Jay McBain:16:56
Yeah, and, by the way, 78% is a global number. It's 81 in Europe and 83 or 84 in Asia. Pack. So it goes up as you go East around the world. So in terms of leadership you kind of look at, first of all, it's very noisy. Almost every category is filling up. You could go to G2 crowd or anywhere you wanna go and you can see every category getting filled up. I mentioned 11,000 marketing solutions, 4,300 security solutions. Who's doing it well is there's a lot of noise and clutter and to kind of break through and get some remaining oxygen in the room, the companies that do it the best have a really good grassroots approach knowing where partners which represents 78% of your opportunity knowing what they read, where they go and who they follow what I call the watering holes of where they are, where they're getting influenced, how they build a security stack, for example, to a SASE or a zero trust kind of model. That's where the intersection is And that's a very affordable place at these smaller events. It could be in a podcast, it could be in a smaller magazine. I mean there's 14 spheres of influence. The companies that are growing the fastest, for example in security, are actually measured the most visible and the best execution at a community management level up, once you build a base and once you build large enough customer base and perhaps at that point you're raising later series of money. Then you can afford to go top down into the largest resellers, the CDWs of the world, the insights, the compu centers. You can afford to go into the biggest distributors in the world, the TD, cinex, the Ingrams but much like you need market fit and you need sales and marketing repeatability. You don't really start your business and go into these $60 billion size companies hat in hand because it's a more robust kind of enterprise approach at that point.
Isaac Morehouse:19:00
So it's really about finding it's really a community based approach. you're saying, especially if you don't have the big resources yet, like, okay, where are all these watering holes? Where are the conferences, where are the podcasts? Where is the content being consumed And really living in that market to be known there, to find out where you can interact with your buyers or with your partners? So if you're going and you're trying to attract these resellers and you're going to all the right places, what messages appeal to, like what motivates resellers? Is it purely they wanna know what the revenue it's gonna drive? Is it access to your network? What are they looking for in a vendor?
Jay McBain:19:42
Yeah, so kind of two answers to that One is on this, you're going to the right places. That's a little bit more detailed than just checking a box, but what we say is there's six different vectors that go into the right place Your product. While you may wanna run a $7 million Superbowl ad all things to all people coming out of the gate, you're having some early successes, maybe with a particular type of buyer in a particular sub-industry. In a particular sub-industry there's 297 of them In a particular geographic region, in a particular layer of security. there are dozens of layers of security or whatever product set you're in In the particular market segment, like SMB. but SMB has six different layers inside of it. What works in a flower shop is very different than what works in a 299 or a 499 shop. Then the model is it better delivered through managed security solution providers or in managed service providers or more of that bar mark? So all these things create almost 35 million permutations and allows you to get in the right place in terms of narrowing to those six vectors where you actually want to be. And then you're in the right place. Now the question is what's the right messaging? And this is what almost everyone I talk to gets wrong. They came fresh out of college or they've been around forever, it doesn't matter. They're still thinking the four piece, the price place, promotion, they're trying to work the perfect program and stuff like that. In that case, most people don't care. What they're trying to do from a financial point of view is figure out the multiplier, because there's almost no money left in resell in any category. So you can't pay the mortgage, you can't grow your business. Everybody knows this. In hardware, you're down to single digits now. on software, with a subscription model Every 30 days forever. there's no million dollar deals anymore, so there's never enough margin to properly run a business. This is why 25% of resellers don't make money. The next 25% struggle month in, month out, because the multiplier is the $6 that every dollar of product kicks out. And if I can figure out all the services consulting, design, architecture, procurement, service provisioning services, integration, implementation, all of the ongoing security services if I can figure out what wraps around that and find my way to 200 or 300% of the deal, that's where the money is. That's the value add part of reselling. That's the value add part of regular partner is finding out where the adjacent opportunities are. And that's the conversation to have now Is not how much margin you're giving out, or how much your new customer bonus is, or your market development funds, what 1% that you kick out for that. that's just all plumbing. What really want is this a fast growing part of the market? Is this something that I should spend time certifying, building competencies, building a practice at my business around? Is this a train that I wanna hook my caboose to And are you the right vendor that's gonna take off the fastest from this train station and pull me along and get me access to a really fast growing market where I can take a leadership position. That's the conversation in the elevator pitch.
Isaac Morehouse:23:07
Man, that's so huge. It's gonna counterintuitive. If you're coming from a very, very product centric like okay, especially like if you've been steeped in PLG, we gotta make sure that the product just, it's just self-serve and it just handles itself. This is almost the opposite for those partners. They want to know. A lot of change, management is gonna be required on the part of our buyers. There's a lot of this is a long-term relationship, is not just a transaction with a kickback. We're talking about them building something in our customers, building something into their process. That's gonna need help from you and add on services, so the ability to articulate and paint that vision and show people who've done it and who have built businesses on top of your ecosystem. By the way, i feel like we should always have a drinking game when you talk, which is every time you recite a very specific number just off the top of your head. It's like the percentages that did like this many watering holes, this many moments it's amazing always blows me away. So I'm gonna ask you one final question, because you always have some good predictions. Give us a prediction for next couple of years in the reseller space, anything you see coming.
Jay McBain:24:14
Yeah. So one of the biggest changes obviously we're going through, 76% of companies in every industry are going into subscription consumption models. This is from your toothbrush to your car. This is all levels of hardware, software and services. So in that model it actually fits and we're seeing buyers go to marketplaces to provision and procure that level of subscription and consumption models. So they're growing. At 86% compounded, we're seeing some really, really big numbers. We just ran a survey last week where 93% of partners now see their customers buying from marketplaces And that would compete with them because the money's not coming through them, but that's okay. 52% of partners around the world now see their customers making primary decisions and primary purchases through marketplaces or frequent. So this is a big change from even six months or 12 months ago And that 86% compounded might be a little bit light. It might go into triple digits again for the next few years. So, given that, one thing that is surprising, i think, to most people to know 24% of marketplace deals today, whether it's at AWS or any of these marketplaces, are done by partners. So the reseller is literally clicking by on behalf of the customer, doing that work that they've always done, but oddly enough, the money doesn't flow through them. They're not the reseller of record. So why would they do that? Why would their finger be on the mouse? Why would they be helping the customer configure price quote design architect? Why would they be doing this? For them it's a ticket into the multiplier. Hopefully they can charge for those procurement services, because big system integrators like Accenture do. But even if they don't, they literally are building the seven layer, stack their fingers on the trigger and they're in the pull position Among the seven partners that might be trusted at that mid-sized customer or larger. They're in that pull position to get the first slot on that multiplier. So in 24% of cases it's literally the partner reselling. It just doesn't happen to be collecting the money and sending Biff out to break your knees if you don't pay in 30, 60, 90 days.
Isaac Morehouse:26:28
That's amazing. That's amazing. We might have to just change what we mean by reseller. now, jay McBain, everybody always bringing it. Thank you so much, jay, for coming and setting the stage for us.
Jay McBain:26:39
All right, thank you.
Isaac Morehouse:26:46
Alrighty, can you guys hear me again? I think we did this transition smoothly. Okay, i saw some emojis. That means we are good to go. Well, okay, we have. I think we have another poll question, which is is it possible To hear Jay McBain talk and not walk away feeling hyped? I guess that's a double negative. Is it possible here? Oh yeah, and not walk away feeling hyped? Yeah, i don't know what it is, it's. It's like every time Jay just recites these numbers, i come away and then I'm like, oh my gosh, this ecosystem stuff, this partner stuff, this indirect selling, this it's changing the world. I got all these numbers and stats and then somebody asked me Yeah, like what? I'm like I don't remember, but Jay just said like 10 of them and they all sounded super legit. So, all right, next up I'm gonna bring on Oh, let me see, i think, if we have another question that wanted to ask first before I go with JD. I don't think so JD DeVoe, head of strategic partnerships at Comfort AG. He's gonna tell us the story about how they Incentivized and really re-incentivized partners when they were kind of not getting the results that they needed from their program, what they did to drive that 26% number that I mentioned before. So JD, how?
Jonathan Deveaux:28:02
are you? Hey, what's going on, isaac, how are you?
Isaac Morehouse:28:06
Great, get, get. Let's give some emoji. Welcome here for JD. It's mostly for me, really, because I need to see those there We go. There we go. That's for me. So I would love to just start with, like, when did you first realize, you know, was there? was there a point or a You know a change in focus or something that made you realize like, hey, we got to do something to re-engage our partners, to reinvigorate our program. Was there specific indicators you were looking at that that made you come to that realization?
Jonathan Deveaux:28:33
Well, let me. Let me reset a couple of things too. So the company I represent is Comfort AG, not Comfort AG. We don't. I know we talked about this, it's hard.
Isaac Morehouse:28:44
This is embarrassing, yeah, embarrassing, because you said it already to me before.
Jonathan Deveaux:28:49
Well, it's the name too. And No, we don't sell pillows or mattresses. You know that's a lot of what people think initially when they see our, our company name. So we're in that cyber security space that Jay McBain just talked about. He said there's a lot of noise. That's completely true. There's so many other companies that address cyber security and we address just data security right, a small snippet, if you will, of that, that overall problem that it buyers are approaching. So We we use the resell Strategy, if you will. So we have a channel network. I've been at Comfort a four over seven years now and We really took a strategic approach to to partnerships. Within the last three years, like right before COVID started, we really looked at partnerships and just made it a focus to to go to market that way, rather than our previous approach was working with technology Alliance partners and waiting for technology Alliance partners to pull us into Opportunities.
Isaac Morehouse:29:58
But having a focus and a strategy and then a program behind it To scale up and enter a different market is what we did so Talk to me through, like what the steps involved in you know getting to that, getting to that partner pipeline growth 26%, like what we're kind of the. I know you implemented some incentives, you know did some things to reengage. Can you sort of walk us through tactically What you went through so?
Jonathan Deveaux:30:29
The best way I could describe it is we're like other partner organizations that resell. So we have, you know, reseller partners. That's the bulk of our channel program. We have referral partners who, only you know, come in at certain parts of the sale cycle, most of the time before it and Then maybe at the end to help us close. We've got distributor partners right Who don't sell directly to end customers. Maybe they sell to resellers, so they'll pull in resellers. So we were bringing in a mix of all of these different partner types. So that was one thing that we we made sure that we were able to bring in these different type of of Resells. I'll just call them the resell category. We have a program like everybody else. We've got a 10-step program. Kind of sounds like a 10-step program to fix a habit, but a 10-step program to to On-board and ensure partners, our resell partners, are able to sell, includes what they can get from marketing, includes how to deal reg, the whole nine. You know we set up a project. Look, it'll take you 30, 60, 90 days to go through this whole thing. You guys should be enabled to sell. Boom, here's your team, have at it. And you know that was working well and it continues to work. Well, you know, depending on the partner right We got. We started to recognize situations where partners, after they went through that program, you know, out of the bang, they started to, you know, talk to have the right meetings, open up opportunities and it started to look good, developing the pipeline, etc. And then we started to see a stall, a little bit like oh, it's not, some opportunities aren't getting to the next stage, or The number of meetings. We started to see these indicators and number of meetings are going down, not as many. They went through the enablement process, yeah, the whole nine. So we started to see these, these indicators on that level and it it brought us to to say what do we need to do here? and That's when we started to to relook at the whole program itself and just determine alright, in the beginning We didn't offer incentives. You know I'm kind of old-school on the point that You know our product, our solution, should be able to be enough to be a value for that organization. Say, yeah, you know what? We don't have your type of solution in our price book and we'd love to go to market with your solution, boom, and that works. It's re-engagement when, when they go to market and they get some failures. They get like not enough and they're not closing sales and they don't do anything. That's the re-engagement that we saw that we needed to do. So we did do some incentive. You know, we could drill down and into that a little bit and we just tried a couple of different things with marketing, etc.
Isaac Morehouse:33:14
So yeah, yeah, i would love to know let's drill down just a little bit What some of those incentives are, because I know it to your point. You know And this J was kind of making this point that, hey look, the biggest thing is what's the multiplier They can get you know from your product, what kind of services. And you would sort of think, okay, well, we onboarded them, they were doing it, they were doing great. Why would we have to throw a bunch of incentives that? doesn't that just seem like you know, i don't know, like superfluous stuff? What did you do like? what kind of incentives did you find were useful to re-engage or to get them back on the horse after they had some failures?
Jonathan Deveaux:33:46
Well, let me, let me. Let me address like, why you got to understand, like, why didn't what happened? it can't just be It didn't work. Oh well, i'm going away. I mean, we too have to understand our partners better, and that's what we did as well. It's like they're not only just selling our solution, they're going to market with other solutions, other shiny objects, right, other solutions that they think they can, you know, increase their revenue with Some of the partners we looked at, you know. So what we did was you took a subset of these partners and said let's, let's work on this program And we analyze the ones that were working really well, put them in this category, carry on, don't worry about them, they're on track to continue doing what they need to do. Another subset We looked at and said, alright, how do we address them? Do we need to Talk with the? you know, escalate it up, escalate the message up and talk to the C-suite Leaders of that partner organization and understand where we need to go. So the initial indicators told us the partners declining the QBR, or at least the, the general meetings that we tried to have. We have informal QBRs. It's not a formal QBR with most of our partners. I think we'd like to get there in the future. But we have informal QBRs where, hey, you know, let's talk about how things went. You know previous quarters, if we get cancellations on QBRs, or if we get just non participative QBRs, or You know there's some come to Jesus QBRs. It's like you know, hey, we started off under the premise of, you know, trying to get to a certain point and we're not there. What do we need to do? So of the subset that was working, well, we left them alone. Of the subset that we needed to up level the conversations with the C-suite executives or those Organizations we did determine some of those work just weren't a fit. It's like you know, we did approach the, the partnership, understanding that you know We have a couple of opportunities but maybe it's not going to turn into a full-blown Partnership. We had to realize that. And then some of them, we had to say, well, what else do you need? and that's where you truly uncover What were some of the barriers for them to move forward. And that's where we saw like in some areas, for example, many people on this poll, maybe, or on the on the call Sell in other markets outside of the US, try getting money. If you, if you made a sales closer in Latin America, try getting funds. If someone bought your product today, try getting that, that, you know, dollar. If you will tomorrow, it's very difficult. You need partnerships that know how to navigate that. So, not only about Navigating the end sale, but also they need solutions in their language. They need to go to market with Joint documentation that's converted in their language correctly, but also that they can, you know, go to market with. There's also sales tools that they need, maybe the ability to do demonstrations themselves, training that they understand so that they can, you know, regurgitate that, if you will, to a prospect. So these, all these other needs, start to bubble up, if you will. And those were the things that came out that we addressed and We're able to come up with now when we talk about incentives. It, the incentives, worked when there was a gap where we started to see the decline And we had these meetings and we said how do we reengage with you? blah, blah, blah. What we've got, you know, documentation, blah, blah. Things like that weren't working. We put the incentives out there and said look, we're also focused about, you know, meeting some particular goals by certain quarters. What if we did this. Get your teams reengaged. You know here's a sales program incentive that we did for Completing training. Boom, so their tech team. Get your tech teams aligned up, complete the training by end of quarter. We have these, you know, rewards this week and give out. You open up an opportunity or progress opportunities to a certain stage. We've got reward incentives for the sales folks. And then, of course, there was the. We offered rewards for closing. We actually kick you a few more points if you're able to close it by a certain quarter or end of year. For us, which was really good. So those were the type of initial incentives that we used to help augment the other things that the sales teams needed.
Isaac Morehouse:38:09
I love that. And then there's something really key in here is it's not that you just looked at your ecosystem and said, oh, we've got some partners that are kind of falling off and not doing very much, let's just invent some incentives and announce it to them. You kind of sorted them, looked at them kind of as a whole and did this sort of qualitative analysis and then a quantitative rather, and then, qualitatively, you started talking to them. I know that sounds really simple, but you're starting asking them why, what's not working, what would help. And then you came up with incentives that were relevant to what they were telling you. That's just such a huge step that's easy to miss out on, cause you just you want to do it all at scale and you just want to impose it down on everybody and say, okay, they're struggling, let's just come up with something and throw it out there. But I just I think that that key step of talking to them, finding the ones who are struggling and asking them why, is huge.
Jonathan Deveaux:39:00
I think in one of your past webinars maybe another speaker said, in real estate it's location, location, location and partnerships is people, people, people. You have to because you got to ask the hard questions And then, like I said, they're busy trying to sell other things. Maybe they can't talk to you now. It's end of quarter, right. They're focused on you know, whatever revenue targets they're trying to meet. It's sometimes it's not personal, right? I have some channel managers that are really on it that are like let's get this done. They haven't spoke to me in four days. I'm out of here with this. It's like, okay, hold on Timing, attention and then these other things that you can do. And even in another conversation I had with another team member, outside of this, it's doing different type of events. So incentives, events, things you could try to do to bubble up your company's name to the top of their mind. share is really what we're trying to do.
Isaac Morehouse:40:02
So we have a couple of questions in here, specifically on the incentives. Nelly Scott asks incentives, financial or other? And then John Hallett asks were the incentives extra points for deadlines, and were they only for the problem partners or for all?
Jonathan Deveaux:40:17
Great question. So all partners. So we let the channel managers decide. They're gonna take it to every partner. But we focused initially. They were designed how do we get our non-performing partners to reengage? And then we said why don't we just give it to everybody? Yeah, why not? So it fit into our newsletter better if it went to everybody, rather than just a program to touch on our under-performing partners. Financial incentives. Now that's a good question, because I've had some sales reps tell me they're like JD, i'm not motivated by 25 or 50 bucks of a spiff. Right, we want our solutions and enterprise solution, kind of like what Jay said during his talk. It's we talked to IT buyers, so it's a larger item. It's a six figure, potentially seven figure item. The sales reps are motivated. They get more points off of that as a discount than a 25, 50, $100 spiff. But with that said, the ones that are the people that are motivated by those are the technical teams, the SDR teams, the internal influencers of the partnership that have great relationships with end buyers. They're the ones that are influenced by, i mean, the heads of those departments. Tell me, jd, what you wanna do is you need to give us incentives in order to get my whole team to attend your webinars, your training. Okay, done, deal. So if we do that, the advantage for us is I want it done on the time we want, so we put an expiration date of a quarter, that way it's not a forever incentive. Do it when you're ready, we can get them up to speed. That matches our revenue targets, if you will, per quarter or whatever it would be. So hopefully that answered the question that was in the no, i love it.
Isaac Morehouse:42:06
So we're gonna bring Jared on to talk about. You mentioned which partners do you focus on? And looking at the troubled partners I know Will Taylor has talked about oh, forget the 80-20 rule, you gotta focus on everybody. And Jared's like no, you're totally wrong, will. So hope you can bring Jared on stage whenever you want to, as he's coming on. I'm gonna ask one more question in the chat here just out of curiosity, because when you're talking about managing, looking at all your partners and figuring out who's doing well, what partner tech tools does everybody here use? Like what are you using? I'd love to just see in the chat what all the difference are. There you go. Hope's got the question what partner tech tools are you using today? So, jared, we love to hype up controversy here and have real or imagined battles. This idea of focusing on sort of the long tail of partners who are maybe not doing as well, or versus let's just focus everything on the top 20%, top 10% of partners who are doing really well. I wanna hear your take and then maybe you can illustrate with story from some of your past efforts on that And maybe there's some.
Jared Fuller:43:19
I think, how much time do we have?
Isaac Morehouse:43:21
We have 18 minutes Jared.
Jared Fuller:43:24
Okay. Okay, because last year I gave a presentation at Supernode about the emergence of systems. And ecosystem is a more mature business system that's kind of emergent, where companies are kind of interdependent and they rely on each other. But there's this thing that happens in the emergence of systems is other things get disrupted, so like, and there's these principles that kind of apply from system to system. So it's a strange way of answering the question. But I think at a more foundational, fundamental level, the Pareto principle was discovered by Alfredo Vincent Pareto and by observing peas, right, that like 20% of the pea pods produced 80% of the peas, right. Like this interesting observation that kind of happened then all of a sudden. That would you call that like a distribution curve or a parabola of productivity. You could kind of take that same curve, the Pareto principle, and apply it to numerous different things, a whole bunch of different things, and what it means to say is that things that are emergent, right, things that emerge. So, for example, like whenever you start a partner program, can you call and be like, hey, in five years, here's exactly how these partners are going to be our best partners. No, it's like an emergent thing, but what you can probably state like it's the same thing as looking at that pea farm right, here's exactly the pea pods. They're gonna produce 80% of the pea production. Or you can look at that farm and go like, hey, i know that this much production's gonna come out of it. You can't stipulate, though, that all of them are gonna produce the same. It just doesn't work that way. It's never worked that way, and I can give you two concrete examples, right? So tagging this very ethereal, like more first principles viewpoint on the world, isaac is, look at. I'll give you an anecdote for the HubSpot ecosystem, and an anecdote that I have. Who was HubSpot's number one partner in the early days? It's a gentleman named Marcus Sheridan. Right, and you know this story, isaac, and people on the call might or might not. Well, his gentleman's name was Marcus Sheridan. Marcus Sheridan was a customer of HubSpot and all of a sudden, he was using HubSpot to automate and do marketing automation for his pool cleaning company. Well, he started to realize that there was a much better opportunity for him to go distribute HubSpot to every other pool cleaning company in America, and he became HubSpot's number one channel partner globally, from servicing one area of pools to distributing HubSpot software to every single pool cleaning company in America. Now, in what world could you even tell me that that was going to be a partner? This is like an emergent thing, right. Like we start a partner program, what's going to happen, who knows? And then I have an anecdote at Drift, right, so our number one partner was what He had a hot air ballooning company. Like in no world would have I been like, yeah, you know that guy that's using Drift to build these crazy bots for his hot air balloon company. Like he's totally going to be my number one partner next year. Like that's an emergent thing, it's probabilistic thinking and it just demonstrates. It's a favorite quote of mine And it's kind of like economics or like first principles. It's a great high quotes called the fatal conceit. It's. The curious task of economics is to demonstrate to us how little we know about what we imagine we can design. Right, and that's if you have that like ivory tower lens, where you're like I'm, my partner program is going to do exactly this And here's how I'm going to activate all of my partners. I don't know, tell me the last central planner that was bright about the economy.
Isaac Morehouse:47:23
So you're kind of saying like, hey look, it is going to be 20% or whatever somewhere about there. That's going to, that's going to drive most of the value. But the danger with focusing myopically on that is you don't know which. Who's going to be in that 20%. You don't know which.
Jared Fuller:47:37
Yeah, i would say that that that's the thing that is more true than is the 80 20 rule right or wrong. So I think that's the nuance. So, like, when I say wills wrong, i'm not saying that like the 80 20 rule is some like thing that, like you have to figure out. The point is, is that 80% of your partners will be unproductive, like you're not going to be able to unfix that, but to state right, do you know which? 80%, not necessarily right. So it's a trap both ways right. So you're going to pull the audience. Let's see what the audience says.
Jonathan Deveaux:48:17
I've got some commentary on that as well. Speaking from a buyer's perspective, I'm not a buyer, but buyers that we talked to. Some buyers tell us hey, I've moved from partner ABC sorry, reseller ABC that we're talking with. I now buy from partner or reseller XYZ. So they're still doing the transaction. They just shift and that might be, that might fit into what you're talking about. Different players come and go in that 80 20 area. But that that's what it is right. It's a shift. We got to understand where people buying right.
Isaac Morehouse:49:00
So how do you think about? you know there's like the rescue effort. You know, okay, we got, we got to go get these parts. And you mentioned something, jd. When you looked at you know partners that were kind of falling off Some of them, you decided this doesn't really make any sense, kind of making that decision. Like I think that that's a challenge. People I have found that could be wrong about this, but people in partnerships, people who are attracted to partnerships, they tend to be very helpful personalities, which is why so many Canadians are in partnerships, i'm convinced. And so the idea of you know they're like, they're not like cutthroat right, the idea of being like, okay, forget these partners, we're done, this is not, there's nothing there, let's move on. That can be a hard thing to kind of like cut bait and say this is, this is not not working. How important is that to be able to know when not to spend energy and attention on a certain segment of partners, and how do you make those decisions?
Jared Fuller:49:55
Well, there's another quote that I think is appropriate here is if you can't, you're dropping quotes, like J McBain's dropping numbers, you know well, i mean it's I use the three C's a lot, right curiosity, courage and conviction. And what I tend to say over and over again are the things that are more true, right and more apparent and more evident to me the more I spend time in this market and help people. Isaac, is that the? there's a Einstein quote. If you can't explain something simply, you don't understand it well enough, and I think what people's tried to do is. It relates to, let's say, the long tail of partner activation, theses, right, so it's like playbooks that are in depth and it involves, you know, partnering, better partner enablement and better partner marketing and better partner recruitment, better partner onboarding and better partner experience. But and we just it's on and on and on and on and on and on. And the reality is this, right, if you're the average that you spend, you know you're the average of the five people you spend the most time with, and you realize that one of those people, like the visions off, they're going in a different direction or heck, it's just a friend, right, someone in your friend group, and it's like you know they're staying out later and later in their, their party and over here and they're drinking and they're making poor decisions. It's like Do I want to be around that person and guess what? some of your partners are going to stray from the path that you're going on as a company, especially right now? Are you making changes that are, let's say, bold dictates on your market? You might be moving in a direction that might be fundamentally different than where some of your partners were a year ago, three years ago. I mean heck, has business strategy changed in the first six months of 2023? you bet your asset has right. So if you don't think about, like, the people that got you to where you are might not be the people that need to get you where you need to go. I recall very vividly my first year at drift and Michelle and me grinding through onboarding and signing over 400 partners in the first year. In the third year, how many of those 400 that were we still working with? Maybe a dozen. Maybe a dozen Why? Because we went in a different direction. We were an SMB all in one platform we were trying to be, and then we pivoted very hard into AI and enterprise. That means that we had to cut bait. It wasn't the right alignment To say no. Those partners that we signed on paper we have to protect and nurture all of them, and it would be in direct contradiction to company strategy.
Jonathan Deveaux:52:26
I comment on that too. Excellent stuff If I was to drop when I dropped the Simon Sinek. Start with why? Because if we look inside, our CRO or our CFO is going to ask why are we partnering with Phil and the Blank Partner? Take the GSIs, for example. Everybody loves to want to partner with an Accenture, ey or Deloitte. They're really hard to partner with and you have to have clear opportunities with them, but their focus is what's in it for me? If you don't clearly answer how they're going to increase their revenue or satisfy their goals, it's just not going to work. We started some partnerships where we were ambitious, like no, here's exactly how we're going to do it. It's like you said, jared, if even our model changed a bit and we said wait a minute, we're going to focus here, this is making it for us here. Maybe when we started those partnerships back here with companies ABC we didn't have that in mind. So it's worth going back and having those conversations and saying, hey, are you with us if we go here? Maybe they won't. Maybe when we're ready to do a little bit more, we'll come back to you. You don't have to cut them out of that partner lifecycle. Maybe you can table that for months or a year or whatever it would be, but it's nothing to consider.
Jared Fuller:53:53
Yeah, we went to a lot of those partners and we said, look, we could be your partner for X, y and Z in the enterprise and the degree to which you're going up market. They were like, okay, sounds great. And that was the last convo we ever had with them, boom, Clearly we're not going in the same direction.
Isaac Morehouse:54:09
Jared, i'm curious on the incentives question If you've found incentives that are helpful in reengaging partners or, specifically to JD's point, people that partner with you. They're all excited, they go out in the market and they fail on their first attempt to include you in a deal Like do you have just like you would with a sales team where you got to keep morale up and keep people engaged when it's not working out? What have you found to work well with partners in that regard?
Jared Fuller:54:42
Well, let's see if the people are paying attention right now, because this is a point that everybody needs to drive home. So give me some emojis if you're paying attention right now, because this is the stuff you're going to want to listen to. What most partner people aren't very good at and they need to take a long hard look in the mirror is helping. This is not incentives 10 percent revenue share, 15 percent revenue share, 20 percent revenue share that ensures that the CFO can put something in the book that you put your name next to, but it doesn't guarantee success. It pays for the cost of the program, assuming the program works. But what great partner people are great at? is it helping, not giving? What do I mean by helping? It's by having a deep understanding of what is most important to your partner What do they need help with right now and being able to deliver on that promise. I've said that trust comes from helping people reach their promise land. If you are not viewed as a node by which they can get closer to where they need to go, you don't have a seat at the strategic table. You are one amongst many. You're not the few that they call on that they count on to get help from when they need it. So whenever you call on them for help, are they going to give it to you? Ask yourself that question. That means that you need to be an industry expert, you need to be passionate and you need to be the type of person that can execute across marketing sales success, maybe some product innovation to push that in the right direction. The reality is and this is tying it back to the 80-20 principle why I think that's so important. Can you go do that with every partner? I don't think the answer is yes. I think that you need to be able to call your shot and understand with which partners do you need to knock it out of the park? You need to know that and your partner managers need to know that, because it's not going to be all of them. You can't knock it out of the park. I mean, your slugging percentage is what matters, not your batting average. That's what matters at the end of the day, it's that everyone's going to bat 200 to maybe 350 max. That means that you're striking out or not getting on base more often than not, but when you do get on base, that's a double, it's a triple, it's a home run, it's not a single. You're not getting walked on, you're not getting lucky, and when you connect, you better knock it out of the park.
Isaac Morehouse:56:56
I was a big singles hitter, so that hits me hard there. Sharer JD, any thoughts to add there?
Jonathan Deveaux:57:05
No, that's excellent. That analogy is perfect, especially for people that understand baseball, and that's super key. But it is the helpful mindset. What can we do to help? And I think listening to your partners and understanding, if you do, you know, i recall a conversation when Jared was saying that was a partner said I need to understand how you guys compete against fill in the blank right. This is what problems they have And we've got to be able to simplify that, deliver it and help them solve those type of problems for their customers, because, at the end of the day, the customer is going to keep coming back to them And it's their reputation as well that says well, you told me about this solution And I don't know. I don't know about it. So it's their reputation on the line as well.
Isaac Morehouse:57:48
Yeah, that distinction between giving and helping. I think it goes back to what you said, jd, what we were talking about before. Rather than just okay, let's just give our partners some incentive that we make up, helping means first you go, listen to them and see what they actually want and getting in, living in market with your partners. All right, we're going to bring this to a close, we're going to wrap it up Speaking of helping. huge shout out to Magentrix for helping us put this session together. and an offer from Magentrix. This is not a sales offer, but if you want to know, you want a brainstorm, you want to get some help with how to reengage partners. Paul Byrd, who is a portal wizard this is title over there at Magentrix he's willing to chat with you and just talk through some of the things that they've seen people do successfully. So if you're interested in that, you can put an X in the chat or just say something in the chat like, hey, i'll talk with Paul. That sounds great. Or if you want more info on improving the partner experience, you can also just mention in the chat. there's a recording of a recent Magentrix event on creating partner experience as well. So anybody who's interested what is it? an X? We'll do an X. Put an X in the chat. You got to talk to Paul. Put a Y in the chat or just say recording. if you want a recording of that other Magentrix event, we'll probably just send a link to everybody that registered for this as well, because we know all of you are here to grow your partner pipeline by 26%, exactly, exactly To the decimal point. JD Jared. thank you so much. Everybody in the chat. we'll keep it open for a few minutes. If you have any follow-up questions, go ahead and let us know if you want to chat with Paul over at Magentrix. But this has been awesome. Any final words you guys want to leave everybody with?
Jared Fuller:59:35
Thanks for hanging with us this Thursday. Had a blast. I always love coming and speaking with you all, so hopefully didn't scare you too much.
Isaac Morehouse:59:43
We got big stuff to do out here. Jared even took off his hat. Got a haircut for you.
Jared Fuller:59:46
Yeah, got a haircut to show up today Brought the A game in the shirt. Thanks, Helen, for making fun of it.
Isaac Morehouse:59:51
Appreciate that In fact there might be some kind of a record. The odds of seeing both me and Jared without a hat up with neither of us wearing a hat, it's kind of low.
Jared Fuller:1:00:01
So shout out to Ella for telling me I can't wear it anymore.
Isaac Morehouse:1:00:04
So Hey Jonathan, thanks so much, Despite me embarrassing myself mispronouncing your company's name twice, Twice, after you warned me So. But look, as long as I hit a couple of home runs, those strikeouts will wash. You know exactly. Thanks so much, everybody. We'll see you next time.
Jonathan Deveaux:1:00:22
Thank you, Thanks everybody.
