Brand New: Stepping Up Sales, Marketing Strategies

Prior to the recent moves shaking up IT, including Hewlett-Packard's decision to split into two companies, Symantec's move to form separate security and storage businesses, and other potential moves analyzed by CRN, editors at the XChange conference sat down with five top channel chiefs for a wide-ranging discussion about issues facing the channel, including the importance of marketing to training a highly skilled sales force and beyond. The executives -- including Cisco Systems' Bruce Klein, senior vice president, Worldwide Partner Organization; Dell's Frank Vitagliano, vice president, channel sales; HP's Stephen DiFranco, vice president, general manager, Solution Partners Organization; IBM's Tami Duncan, vice president, North American channels; and Rackspace's Will Knight, vice president, channel partner sales -- shared strategies they're seeing on the front lines.

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[Roundtable Video: Hiring Channel Talent]

CRN: We're hearing partners say they need a different sales methodology from what they've had in the past. Some solution providers reach out to the vendors to ask for help. Some are asking for a sales perspective on how to go to market with managed IT services and cloud. Are you seeing that?

Tami Duncan: [Partners] certainly have been interested in us sharing internal education. ... [IBM CEO] Ginni [Rometty] created a [program] … internally called 'Think Friday,' where we go through a very specific point of view. It's very well done. There usually is a customer interview and then [a discussion around] things the clients are looking for in spaces like big data cloud analytics. ... A lot of it is around, 'How do you reach that line-of-business buyer?'

Frank Vitagliano: I've actually seen [partners] become a lot more thoughtful to us on how to go to market. Because, for years, it was just all about referral business. ... I think partners are sitting back, stepping back, trying to do a better job with that. And in the marketing piece, to be honest, you know, talk about partner marketing. Partner marketing really didn't exist probably 10 years ago, right? The reason a lot of it exists in a lot of cases is because we helped drive a lot of it, from the vendor standpoint, by making it easy for them. We'd hand them the templates and it was basically fill-in, and I don't mean it to demean what was being done, but that's just the way it was.

Bruce Klein: The statistics show that most of the buyers are making decisions before they're actually talking to someone. Doing that research and revenue marketing is becoming more of the term, as in, 'How do you kind of keen up your marketing organization to be able to drive that demand, drive the pipeline and actually conduct the sale and drive the revenue?' ... In most of the partners' marketing organizations, they're not as connected with the sales teams. They're there to put on events. They're there to put on different trade shows. They’re there to try to drive a message into the market but they’re not as connected with the overall strategy of that company, and that seems to be one of the missing pieces -- to get marketing at the table with the sales organization to create that plan.

Stephen DiFranco: I think there's this interesting change that's [going on with] VARs. They used to be able to control their entire revenue stream in a relatively small number of customers and farm really deeply into them so there wasn't a lot of need for things like marketing organizations. There wasn't a lot of need for very sophisticated selling methodologies because they had five or six customers that were taking care of actually 80 percent of the revenue. Now, as they're trying to grow and they open up lots of offices, we've noticed that the consistency of the selling across the different offices has very inconsistent selling methodologies. So what's happening now is you put all this capital out and you've hired all these people and yet [they] don’t really have a sales methodology. ... Have you ever taken a look at a VAR's pipeline? You might want to do that. You'd probably be really surprised about how unsophisticated that is. So I think this is just another sign the industry's growing up; it's getting more mature.

Next: Partners Getting On Board With Vendor's Marketing Strategies

Next: What about at Rackspace?

Duncan: We've been very pipeline-driven for years and the firms are real clear that they run their own businesses and so we're working very closely with them to link in.

CRN: What about at Rackspace? You guys are really selling a service that kind of falls in line with this need to be positioned differently from a sales perspective. What are you seeing?

Will Knight: I echo the thought around maturity. As the resellers and SIs are getting bigger and more mature, they're asking for help around sales methodology but, equally important, they're asking about compensation. How do we think about an annuity model as opposed to this big sale? And again, if I had to pick one hurdle, it's probably compensation, and the second one is probably around the readiness and enabling the people to talk about that hybrid solution. It's a lot easier to build the data center then it is to think about a hybrid environment where you have some applications that live in the cloud. You have some applications that live on-premise and you have some applications that live in between because they're dedicated but also versed in cloud. ... The second trend we're seeing is the money. Everyone is aware that money is flowing a lot outside of IT into the business areas, and so you get a lot of diverse people that are actually making decisions in the process and it's not just influencing the CIO or the IT director. It's influencing the VP of sales via marketing. Those are exciting, but much more complex, sales and so asking for a 12-step, incredibly structured sales process is probably the wrong question to be asking. ... It's less about us wanting to see your pipeline. It's actually more about wanting to help you to be able to architect that in a way that's going to be scalable, high-performance and efficient to actually deliver for the customer.

CRN: Is there a way, as an IT leader, to show a CFO a proper justification for return on investment for these service plays or cloud deployments? How do you suggest partners actually make that argument that returns are a better way to go?

Knight: I think what you're seeing is there's a lot of shadow IT going on right now. What we're finding interesting is when you go talk to CFOs and you ask them, 'Do you know how much your company is actually spending on cloud?’ They think it's one expense, and then we have a process where we could do an assessment of how many of those business units are actually sliding the credit card and spending the money. It’s usually a 10X of what the CFO thinks they're spending on cloud because they don't have control of it. ... With an IT organization becoming more of the orchestrator of these cloud services and making sure it's secure and reliable, there is choice and I think this is going to open up a huge opportunity for partners around professional services.

CRN: Do you believe closely aligned sales and marketing strategies will be the critical differentiator for solution providers?

Klein: When you talk about the world of cloud and where it's going, as you mentioned with hybrid, it's all about hybrid IT, right? It's going to be private. It's going to be a public cloud. It's going to be able to offer both. As the partners get into that, they're going to have to create a brand -- what is their brand in this world? Everyone's going to have offerings and be able to link with their marketing organization and have a joint go-to market strategy on what their brand is, what their differentiation is, what services they offer. ... I think it is going to be important that the marketing organizations step up and become part of the organization's go-to market strategy.

CRN: How critical is it that partners team up with their vendors' marketing scheme?

Klein: We want to make sure that they've got the skills and capabilities and they've got the talent and they leverage as much as they can that we can provide them. That's what we're working on, all the tools and enablement so that we can train them but also help them leverage our materials and they can customize it around their branding and their differentiation and put it out. So we're in true partnership with them.

DiFranco: In a world that's a hybrid cloud where software-defined data centers is what this is all about, these VARs who, for years built sales teams made up of relatively well-paid selling animals, now end up having to do things like call centers, now have to start to do things like outbound marketing. Frankly, I think the VARs have relied on the manufacturers to do that for them for years and in a software-defined networking world where more of the partner revenue is going to come from services than it had before, and might even come from things like consulting besides services, they're going to have to build marketing departments and they don't really know how to do that yet.

CRN: There was a lot of talk by some individuals to just fire a whole sales force. Obviously, no one is doing that but most of them are actually retraining and in some cases bringing in some new people with different skill sets. Where would you put your limited resources right now?

DiFranco: I have a lot of passion around this topic. Go back five years -- the salesperson was also the SA. Then over the last five years, at a great expense, partners have added SAs, which they can't bill for, which has put a lot of interesting pressure under the salespeople. If you really dig into the sales culture in the non-VAR VAR world, in the solution provider world, you find some interesting things. There's still people running around on 1099s. There are still VARs whose entire sales forces are living on 1099s.

Listen, training a salesperson is probably the most expensive thing that a company does. It's really hard to do. ... It takes a long time to find the right person to bring into sales because most people don't wake up in the morning at 8 years old and say, 'Oh, God, I want to be a salesperson.'

Vitagliano: Sales management is really critical here because in a typical small solution provider operation, the company kind of grew up with the owner/entrepreneur who tended to be technical, not really a sales guy, and then as they've gotten bigger and more successful, they've had to have sort of the vision to put in place some professional sales leadership, [or] people that know really how to lead salespeople with different methodologies.

Knight: I typically ask one question that gives me pretty good insight. I say, 'Talk to me about your compensation model,' and if they stutter, I realize we've got a lot of work to do because there's an old saying at least that I've had, 'Sometimes people pay for A, hope for B and are surprised when they get A.' You get what you pay for and so when I chat with the leadership team -- typically sales leadership -- and if they are paying for on-premise workloads and they're hoping for cloud workloads, they're going to get on-premise and it's going to be a difficult transition.

This article originally appeared as an exclusive on the CRN Tech News App for iOS and Windows 8.