CLOUD PARTNERS VS. TRADITIONAL PARTNERS HOW TO ENABLE AND MOTIVATE HYBRID PARTNERS KEY TAKEAWAYS AGENDA

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1 Building a Go-to-Market Strategy to Enable Both Your Cloud and Traditional Partners William Gilsing, VP Channel Strategy Dale Taormino, VP Client Services

2 CLOUD PARTNERS VS. TRADITIONAL PARTNERS HOW TO ENABLE AND MOTIVATE HYBRID PARTNERS KEY TAKEAWAYS AGENDA

3 Cloud Partners vs. Traditional Partners

4 Partner and Cloud trends are defined by the risks and obstacles that must be overcome Cloud partners have had to manage: cash flow issues replace old streams of revenue with new ones, and manage often longer sales cycles all while reinventing sales compensation models

5 And because on-premise opportunities are not going away A balance between Cloud and on-premise spending is the reality IDC, 2013 NOTE: Estimates exclude facilities and staff

6 Channel partners are responding to the increased risk with a more diverse portfolio Forrester, 2013

7 Which means that your goal isn t to enable Cloud Partners and Traditional Partners. Cloud Partners Hybrid Partners Traditional Partners You actually need to enable a continuum of partners with hybrid businesses

8 With an eye to strengthening their Cloud orientation to build a more robust channel Cloud-oriented partners have more: Upsell opportunities The recurring revenue model fosters long term customer relationships 2.4x growth rates and net new customers compared to non Cloud-oriented partners Would you like some fries with that?

9 How to go to market with hybrid partners

10 To develop a hybrid channel strategy that supports all your partners, you need to: 1. Know your partners 2. Provide business transformation support (revenues, cash flow, compensation models) 3. Help partners be better marketers 4. Realign incentives 5. Measure and adjust 6. Maintain a dialogue

11 How to go to market with Hybrid Partners Know Your Partners

12 First you need to know your partners and create partner tiers, scoring both quantitative and qualitative attributes Partners are evaluated based upon their value contribution The value contribution is determined using both quantitative and qualitative attributes Quantitative: revenue performance and revenue growth Qualitative: partner capabilities and specializations that drive demand for the vendor s solutions and further enhance the solution offering Attributes are customized for a vendor s solutions and market focus Each attribute is assigned a specific score Tiers are determined by scoring ranges Revenue Revenue Growth Technical Cert. Vertical Market Focus Sales Capacity Customer Sat Etc.

13 Partner profiling and scoring is used to evaluate partners and their Cloud capabilities Partner attributes are used to value score and recruit new partners Solutions sold, supported Specializations Certifications Top line vendors Marketing resources Sales Resources Vertical market expertise Revenues Growth Rate Partner attributes plus revenues plus growth are used to value score and tier existing partners

14 How to go to market with Hybrid Partners Provide Business Transformation Support

15 Business transformation assistance involves developing a Cloud Services business plan Support in developing customized, scalable cloud solutions while driving ongoing revenue for long-term business sustainability Assistance selecting the right model of engagement based on current and planned cloud business goals Financial planning for the Cloud Project revenues Manage cash flow Re-design sales compensation structures

16 Provide clear direction regarding solutions and services Provide your partners with a roadmap to successfully sell your Cloud solutions Market size and market positioning The competitive landscape Your marketing and demand generation strategy (generating leads for your partners) Most importantly, identify the services they can provide to augment your Cloud solutions Help partners determine which services complement your solutions and meet their customer needs

17 Plan components summary Joint Business Plan Goals for business outcome Company Overview Position/GTM Model Industry Certifications Value to company Sales history Their business goals Location/Staffing Certifications and competencies Marketing Capabilities Profile Data Performance Summary Sales history Certification management Program participation goals and performance Investment summary Scorecard/ Benefits Statement Marketing Plan Objectives and related goals Alignment with vendor initiative Marketing Activities Investment Level required via promotional allowances (MDF/Co-op) Marketing Planner

18 Provide your channel team including CAMs with the knowledge to guide and follow-up with partners Guide select Partners through their personal Cloud implementation roadmap process Immerse CAMs and inside sales in cloud transformation information and knowledge of available resources for Partners Provide targeted workshops for key partners Develop a series of guides and documentation for channel team 2012 hawkeye, all rights reserved.

19 How to go to market with Hybrid Partners Help Partners be Better Marketers

20 65% of marketers report that they are not highly skilled in marketing 43% say: We need help with marketing software tools. 35% say: We need marketing training (SEO, social, and lead management). 32% say: We need better BI on MDF utilization 30% say: We need help with website design/services/ tooling.

21 Determine where your partners can best contribute Sirius Decisions

22 Use joint marketing planning on the front end Individual activities are tied to overall business objectives, not considered in isolation Funding for an activity is based on acceptance of the overall business plan Automated solutions make JMP practical for a wider range of partners/segments Directly tied to MDF/Co-op funding allocation An analysis of spending vs. goal attainment is the driver of best practices which can then be applied to improve overall channel performance

23 There are three key components of marketing enablement 1 Pre-sales incentives (MDF/Coop) + Provides funding - BPM, not marketing optimization 2 Marketing Automation + More control over brand & messaging - Still requires marketing expertise 3 Prepackaged Programming +Programs are preplanned, and managed end to end Best Suited for Tier II and III partners

24 Your pre-sales (promotional allowance) incentives are a strategic tool to help you achieve GTM goals Introduce new products/solutions and drive sales adoption Introduce products and solutions to new target geos to reach goal of 7% market share in FY2014 Help drive new partner recruitment and enablement goals to achieve 2014 recruitment targets Reinforce corporate brand messaging in partner-toprospect communications

25 Your promotional allowance program can be a strategic tool to reach key GTM goals Example GTM objectives Introduce new products/solutions and drive sales adoption Introduce products and solutions to new target geos to reach goal of 7% market share in FY2014 Help drive new partner recruitment and enablement goals to achieve 2014 recruitment targets Reinforce corporate brand messaging in partner-to-prospect communications

26 Marketing automation eases execution for partners Content designed around your initiatives, but allows partners to customize, differentiate themselves Provide support/tools that activates across the entire sales cycle from lead generation to near-sales Consider Marketing Concierge Services as a complementary offering Incentivize partners to use your marketing automation initiatives

27 And prepackaged programming aligns with your GTM goals Establish packages around fixed price tiers Define a predictive marketing outcome with each Consider multiple suppliers and alternatives for each marketing type Allow for peer reviews of individual packages Improve appeal by direct deduction of allowances or funded via credit cards

28 Partner Type A Score your partners marketing savvy to help determine the right mix of marketing support Partner Type B Joint Marketing Planning MDF/Co-op Joint Marketing Planning MDF/Co-op Marketing Automation Tool Key Scorecard Elements: # Head count in Marketing Dept Use of Marketing technology # of campaign per quarter/year Social media presence # of content pieces created Partner brand recognition Size of contact database Partner Type C MDF/Co-op Marketing Automation Tool Concierge Marketing Support

29 How to go to Market with Hybrid Partners Realign Incentives

30 Design incentives programs that deliver engagement and repeat sales 1 Strategy Socialization Localization 7 Experiential Participation Segmentation Customization Establish core implementation strategy and baseline value proposition Utilize strategies to drive enrollment and participation Embed... mechanisms to ensure continuous utilization and engagement Move from basic offer construct to smart segmentation with different requirements and benefits for each Perform geobased segmentation Move from segmentation to unique offers and communications based on individual behavior Integrate ALL data sources so that each participant experience is even more personalized and unique

31 Align incentives throughout the customer lifecycle Pre-Sale Enablement Pre-Sale Rewards Post-Sale Rewards Partner-Led Marketing Sales & Technical Training Lead Follow-up Register Opportunity Long Term Sales Goal Attainment Soft Goal Attainment Close Deals MDF/Co-Op & Rewards Individual Rewards Individual Rewards

32 Target some MDF funds specifically to develop your Cloud initiatives Balance MDF budget between Cloud and on-premise initiatives Allocate funds to partners that demonstrate growing Cloud capabilities (i.e. QoQ growth in Cloud solution sales, completion of Cloud sales training, etc.) Align approved activities tightly to drive increased demand generation of Cloud opportunities, funding further partner enablement and business development like individual sales rep SPIFs for cloud sales success

33 Incentives tied to pre-sales soft skills Incentives at both individual and organization level Marketing and business acumen skills development via training and certification offering completion

34 Align rebates for a recurring revenue model to help drive partner transformation For recurring revenue, rebates paid based on Life Time Value (LTV) instead of one-time unit price Adjust compensation model (MRR, QRR, or ARR) Oriented more to revenue growth, not revenue attainment Services attach rate (manufacturer OR partner services) incentives Rebates tied to customer adoption/usage in initial 6-9 months 34

35 How to go to market with Hybrid Partners Measure and Adjust

36 Partner metrics change in the Cloud Number of Deals Sales Cycle Upsell Opportunity Deal Size Performance Impact Gross Profit Annuity Revenue Cash Flow Overall Revenue Adapted from IDC, 2014

37 Channel transformation has made measuring partner and program performance more critical than ever before Value Breadth Frequency Financial POS Sales activity Trainings completed Deals registered /closed Engagement Behavioral Partner portal Training tools Sales tools (e.g. Deal reg) Marketing automation Registrations Participation/frequency Accruals/redemptions Engagement Programmatic Rewards platform

38 Track program ROI ROI of partner programs in aggregate 128% Determined benchmarks for elements of programs delivering high ROI Analysis of sales and partner program data from Q1 to Q4 for 3 regions Sales Debit SPAs Platinum Rewards (EMEA & APAC) Gold Rewards (EMEA) MDF Sales Net of (NA & EMEA Incentives

39 Track partner performance Pareto/RFM Divide Partner database into 20% brackets from highest value (1) to lowest value (5) Anchor tracking from earliest sales period Most recent, frequent and highest revenue per Partner are most valuable Align programs to ensure rationalization of enablement and incentives Track migration of partners from tier to tier

40 And measure marketing performance Play ROI Cost per lead MQLs, SALs, SQLs generated Number of registered deals by partner Number of deals closed by partner Key Metrics Database size Number of partners participating Certified marketing resources Amount of MDF utilized Marketing ROI Marketing contribution to pipeline Marketing influence to pipeline Marketing investment to pipeline (e.g. 1-4%) Adapted from Sirius Decisions

41 How to go to market with Hybrid Partners Maintain a Dialogue

42 Communicate and engage your partners and motivate them to participate Communication Strategy Interactive and UX Mobile and Social Media Direct & Communications

43 But do it in a way that facilitates an ongoing conversation Bi-directional Change is happening SO FAST, you have to have REAL- TIME conversations with your partners Leverage PACs Use monitored forums Train the trainers - channel account management / coaching Solicit real-time channel insights Build an adaptive GTM system - in tune with channel and end users to get immediate feedback Use it to evolve hybrid partner programs

44 Train your CAMs to be hybrid partner coaches Understands the market place and competition Understands Vendor and Partners business models Develops and manages Business Plans Drives demand through partners Meets/exceeds partners sales quota Manages sales pipeline Coverage & Capacity Programs Communication & Engagement Competency Enhancement Coaches partner sales, marketing, tech teams Provides programs, funding, tools, support, training Gains partner and staff mindshare Champions vendor value prop, goals & objectives Aligns goals and mediates disputes Coordinates vendor resources

45 Key Takeaways

46 Build a go-to-market strategy for all your partners Strategy without tactics is the slowest route to victory, tactics without strategy is the noise before defeat. Sun Tzu Know your partners Provide business transformation support Help partners be better marketers Realign incentives Measure and adjust Maintain a dialogue 46

47 Thank You William Gilsing Dale Taormino

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