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Relayware Partner Relationship Management

Your Customers Are All That Matter Pt.1

But What if You Don't Actually "Own" the Customer?

Posted on September 1, 2014 Mike Morgan

I attended the CRM Evolution conference in New York City last week where we sponsored the event and had a booth in the exhibition hall. It was a great opportunity for me to interact with many CRM experts – the likes of Paul Greenberg, Brent Leary, Denis Pombriant and others – as well as listen in on a number of panel presentations.  But after two days of drinking the CRM Kool-Aid (and hearing once again that United Airlines has a tendency to break more guitars than Pete Townsend in his day), I was starting to believe that in the eyes of the world’s largest corporations – I am a giant!  As a customer, I have the ability to bring these companies to their knees with little more than my Twitter or YouTube accounts. But more importantly, I also realized that it’s never been easier to win (and maintain) the adoration of you customers.  There is a plethora of affordable (and sometimes free!) technology at our disposal to manage the customer experience in ways we never imagined possible a decade ago. It truly is the age of the customer!

As I walked the exhibition floor and surveyed the dozens of technology vendors, it was evident how much everyone sounded alike.  “We’re the leading software platform that enables you to acquire, nurture, monitor, manage and analyse the customer experience.” It felt like the only thing that mattered in this world was “the customer”. I know, it is a CRM event …

Then I approached our booth. There it was emblazoned right at the top of our pop-up booth:  “Relayware, the #1 partnering automation platform”.  What leapt out at me from our signage was one word.  For two whole days not once did I hear any industry analyst or technology executive mention it – “partners”.

I toured the hall one more time to count how many of those exhibitors actually sold their products through partners. Almost all of them!  What many companies fail to realize is that a vast majority of commercial transactions … with a majority of their customers … are not made by them, but by their channel partners. On top of that, channel partners are frequently responsible for serving and supporting their customers as well.  So, how can any company that relies heavily upon an intermediary model for marketing, selling and supporting their products fail to recognize the critical importance of enabling those partners to be effective extensions of their own teams, as well as the custodians and facilitators of customer delight?

 

Sadly, the answer can be found in the boardroom. Most companies are led by C-level executives who have had little positive exposure to partner ecosystems. Frequently, they’re engineers, accountants and sales people who see indirect channels as a cost-center or a frustrating barrier to customer intimacy. Sometimes you’ll hear comments like, “partners require twice the work for half the revenue,” or in times of economic uncertainty, companies often retreat to the safe haven of direct selling. Company culture inevitably trickles downward, and as a consequence partner-centric cultures can be hard to find. It also highlights the failure of so many companies to exploit the true potential of their partnerships in maximizing revenues and in delighting their customers.

 

If your company sells to consumers and you don’t own your own outlets and you don’t consider your independent retailers are your biggest asset, then here’s an uncomfortable fact. There are over 700,000 firms with over 1.1 million establishments in the US that generate a total of approximately $4 trillion in sales. Breaking news: they own your customers, not you. And if your company sells to other companies and is not among those who consider the partner a hero, here’s another uncomfortable fact. Over ¾ of all businesses in the US employ less than 1,500 employees.

 

Channel partner large company size focus

Mix of US Business by Employee Size – Source US Census Bureau

Most companies don’t want to sell to them, or simply can’t, for either logistical reasons or the cost of sale is too high.  So instead, they typically devote most of their resources to trying to sell to large companies and you can see their point to an extent:

Channel partner company size consideration

Mix of US Business Revenue by Employee Size – Source US Census Bureau

A disproportionate share of fiscal output comes from large companies in spite of their relatively small numbers.  Not surprisingly, the result is they are inclined to spend more on the things you make or the services you provide. We should not ignore, however, that those companies with under 1,500 employees account for a greater slice of the economy overall than companies of 5,000 employees and above.

They also buy an awful lot of what you make, but they don’t buy much of it (if any) directly from you. What is more, when they have a problem, they don’t come to you to fix it. Instead, they go to their trusted local dealer, reseller, broker or sales agent to address the problem – frequently unbeknownst to you. The same company that will – for the duration of the customer’s relationship with your product or service – determine whether they are delighted with it and whether they will ever buy from you again. They represent your products, your brand, and your company. 

Think about that.

Come back next week for Part II as I go even deeper into the topic of controlling the customer journey and experience when you don’t really own the customer.

 

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