In the previous blog, I pointed out that partner investment funds (i.e. MDF, BDF) are transforming in response to the evolution of the indirect channel, including the adoption of partner ecosystems, alignment with customer buying journey, focus on long-term partner success, and increased competition for partner mindshare.
To transform partner investment funds, companies must reevaluate and realign the strategy, structure, funding, segmentation, allocation, enablement, and measurement of these funds. In this blog, I will highlight the importance of including meaningful partner investment funds in your business proposition strategy which is key to gaining partner mindshare.
Partners have more choices than ever when it comes to determining who they will do business with. Partner discounts, commissions, rebates, and other standard incentives have become table stakes. To win partner mindshare vendors must have a strong partner business proposition, which includes investments, incentives, and enablement of long-term partner success. Development funds are a critical component of the vendor’s incentive stack. To meaningfully drive both short and long-term partner success, investment funds programs must be clear, aligned, predictable, efficient, transparent, and supported. Partners must be able to minimize their time investment while maximizing their return.
Traditional MDF programs are fraught with cumbersome policies, requirements, and manual procedures. Shifting vendor priorities and funds availability creates confusion and frustration for partners. To maximize partner success, programs must be consistent, simplified programs that focus on business outcomes instead of detailed requirements and rules for activities.
Successful partners are aligning more strategically with fewer vendors to maximize their ROI. To increase mindshare with these partners, vendors are jointly planning investments that align with both the partner’s and vendor’s GTM strategy. These investments will be driven by the partner’s business model. Many channel-leading vendors are designing programs to support three key partner business models; Build, Sell, and Service.
Partners that Build solutions on top of, or adjacent to vendor products or platforms require investments that enable solution success. This includes assistance with integrations, sandboxes, proof of concepts, demos, and marketplace inclusion.
Partners focused on selling vendor products and services represent a wide variety of business models, including influencers, referral partners, sellers, and co-sellers. Investment funds must provide the unique value that each of these business models requires.
Influencer partners require investments that facilitate their ability to deliver meaningful insights and recommendations to their clients in relation to your offering. This could include product training, market insights, industry training, and competitive research. Assistance with funding for these activities will make it easier and more profitable for these partners to influence customers in favor of your offering. Keep in mind that most true influencer partners are not interested in direct payments from vendors. Their credibility as a non-biased consultant depends on their independence from vendor payments.
Unlike influencer partners, referral partners depend on vendor compensation for their referrals. While benefiting from many of the investments made in influencer partners, they will also require investments in marketing and demand generation.
Sell and co-sell partners generally benefit from traditional MDF activities focused on partner readiness, marketing enablement, and demand generation. While these partners value investments in sales funnel growth, they are also interested in funds that assist in building long-term success. This includes leadership development, optimization of business operations, and the development of their own partner-to-partner ecosystem.
Leading vendors realize that a ‘rising tide floats all boats’ so they are investing in the partner’s overall success which will drive long-term value for the vendor. This approach also strengthens the vendor’s partner business proposition. This includes MDF/BDF activities that enable the partner’s business growth as opposed to activities that only directly impact sales of the vendor’s portfolio.
Partner Success Activities
- Partner Industry Training
- Leadership Development
- Business Skills
- Partnering Capabilities
- Geo-Analytics Services
- Market Insights Services
- Operational Improvements
- Partner-to-Partner funds
Alignment with partner business models and GTM strategy must be maintained consistently for partners to ‘build a business’ around the vendor’s offering. Program policies, funding models, procedures, and support cannot change every quarter. Vendors must make long-term commitments to the funding strategy, policies, and budget.
Regardless of the quality of all other aspects of investment fund programs, you will lose partner mindshare and participation if procedures are cumbersome. Streamlined and automated processes are vital to both partner and vendor ROI. In a future blog, I will highlight the keys to optimizing investment funds ease-of-doing-business.
Transparency is also viewed as critical by partners when they are analyzing the value of investment fund programs. They need a clear understanding of the vendor’s investment fund GTM strategy as well as easy access to investment fund status and results.
Many investment fund programs focus only on the elements of making the investment (as discussed above), with little focus on enabling the success of the activities. Providing best practices, use-case, tools, and support for the activities will greatly improve the effectiveness and ROI for investment fund activities. Investment fund concierges (including AI-driven support) create a high level of differentiation for investment fund programs.
A strong partner business proposition for your investment funds programs highlighting clarity, strategy alignment, predictability, transparency, and support will drive partner mindshare and investment fund participation resulting in a sales flywheel for both vendors and partners.
Stay tuned for future blogs that will highlight how you can deliver on this strong partner business proposition. Did you miss Part 1 of the series? Click to read now.
Stay ahead of your competitors with AchieveUnite Strategic Insights. Learn more today.
