Covering the markets across Europe with an adequate sales presence is challenging given the diversity of cultures, languages, economies and governments. It’s no wonder so many companies leverage partners to reach and serve customers across Europe. When, where and how revenue leaders should leverage partners effectively is a more intricate question to answer. All too often, companies pursue an indirect channel believing it’s a cheaper, faster way to gain a ubiquitous market presence, only to wind up wasting millions of dollars recruiting partners that don’t deliver. According to Alexander Group’s recent study on driving top-line growth in Europe, partners are essential to growth when carefully selected and properly supported. The same discipline and focus direct models require for precision selling applies to indirect models as well. The study found three important lessons on partnering in Europe: 1) less is more, 2) start local and 3) enable to achieve scale.
Less is more: One might think it’s best to sign up as many partners as possible. More partners means more coverage, right? Instead, study participants stressed selecting partners that not only had the desired capabilities, but were also willing to invest in the future. Companies must be willing to make an investment, as well, to make the partnership work. Therefore, leaders must choose partners carefully to invest in the right ones. One participant shared, “A couple years ago we had over 100 partners. We scaled this down to 10, and we are investing heavily in these select few partners. We’ve seen our partner revenue double since we started 18 months ago.” It’s far better to invest well with a few partners than to invest poorly with a wide array of partners. Strategic partnering calls for continually rationalizing your partner base — targeting, recruiting, on-boarding, developing, managing and pruning partners to yield an effective indirect model.
Start local: Partner strategies among the study participants typically began with smaller, local partners and expanded from there. One participant shared, “Our first wave of partners were country-specific. Once we gained traction, we began to move up the chain to bigger multi-nationals.” The point is less about the size of the partner and more about the partner’s strength in the local target market. The risk with bigger partners is they may not have the local focus. Terms with smaller, local partners may be easier as well. Creating situations resembling local market exclusivity is a means of investing in the partner. “We can give them [partners] certain markets so they can say, ‘This is mine,’” one study participant shared. Smaller partners may also bring unique value. “We get a lot more traction building deeper, more specialized industry solutions by working with boutique partners,” said another participant. Strategic partnering means choosing to engage with fewer, smaller partners — an approach that is consistent with the idea of precision selling — taking a more disciplined and focused approach to your market coverage and learning as you go.
Enable to achieve scale: Achieving scale to grow is one of the primary advantages of working with partners. But scale doesn’t happen by simply signing on more partners. Revenue leaders frequently underestimate the time and effort needed to make the partners successful. Revenue leaders prefer globally consistent and standardized channel partner programs, incentives and campaigns. But in Europe, market differences often call for channel leaders to exercise some leeway with collateral, training, support and even incentives in order to ensure the local partners can succeed. Balancing globally consistent programs with effective local execution presents a difficult task. One study participant shared an innovative channel partner program they call “Campaign-as-a-Service.” Rather than sending in channel marketing resources to help their partners (which doesn’t scale), they decided to give their partners a platform to run campaigns. They stripped out as much complexity as possible so partners need to do only two things: 1) define their target accounts and 2) drive the marketing events (in this case, webinars). The campaign-as-a-service did everything else (message, emails, tracking and follow up). The initial pilot delivered a 40 percent lower cost per marketing qualified lead (MQL).
Driving top-line growth in Europe poses a significant challenge for revenue leaders. Thankfully, Europe is quite channel-friendly — there are many organizations (country-specific, regional and global) ready to serve as partners. Partners offer several advantages: the ability to shift sales costs from fixed to variable, speed to market, market access, local market knowledge, specialized expertise and risk mitigation. All of these advantages apply when tackling the diverse and complex markets across Europe. Strategic partnering in Europe means choosing partners carefully and rationalizing partner ranks, which allows more investment in the right partners. It means ensuring partners bring local market knowledge and expertise. This usually entails starting with smaller local boutique partners. Finally, strategic partnering means enabling partners to succeed.
This is the fourth article in the series on driving top-line growth in Europe. The fifth and final article will focus on the 3rd lever: Centers of Excellence.
Learn more about the Alexander Group’s consulting practice in Europe.
Contact an Alexander Group practice leader.
Original author: Paul Vinogradov