One of the greatest failure points in any relationship is the inability to understand the perspective of the other person. I would argue this is especially true regarding PS organizations and their partner relationships. Based on where product companies are in the product adoption life cycle, partners have very different requirements. Understanding the basic needs of the partner is the first step in crafting a successful partner relationship.
The figure below maps the product adoption life cycle to the needs of partners. This figure identifies three distinct phases for partner needs over the product life cycle:
- Prove the market: When new products and their markets are being developed, services partners need to be convinced there is a real and growing opportunity. Partners do not want to invest time and energy to train employees on a technology unless there is a real chance to make money. Who can blame them? If they place the wrong bets, they may be out of business.
- Enable my staff: Once the product market is established, services partners will want help enabling resources to sell and deliver the product. The hotter the market, the more urgent this need will become. Services partners will want to position themselves to capture revenues while the capturing is good.
- Minimize conflict: Finally, as a product market matures, services partners will become nervous for two reasons. First of all, the will be rightly concerned where to find the next market opportunity. Secondly, if the product provider becomes more services intensive, the anxiety will intensify in services partners as they become concerned the product vendor is now crowding partners out of the services opportunities.
Meeting Partner Needs
Depending on the services strategy a product company decides to pursue, there are different tactics the product company will want to pursue to meet partner needs. There are a few scenarios that are very important for product companies to consider. They represent inflection points in partner strategy. If they are mishandled products may not get adopted, partners may get frustrated, or both. Let’s run through the product adoption life cycle and document these inflection point scenarios:
Early stage product, services heavy: In this scenario, the product company may decide to source significant services capabilities directly to help drive the success of the new product. In this case, the product company is proving the market by creating successful customers. The product company is also creating proven services methodologies to support the product. As the market takes off, services partners will quickly want to understand how much of the services opportunity the product company is willing to cede to services partners.
Early stage product, services light: In this scenario, the product company does not want to source significant services capabilities. The objective is to get services partners to invest in the emerging market by training staff before the demand is proven. To convince services partners to make this pre-investment, Product companies will need to show their commitment to creating the market. This commitment can be demonstrated in several ways, including:
- Revealing marketing campaigns that will drive demand for the new product
- Sizing the estimated services market that will eventually surround the product market
- Subsidizing product training for the services partners
- Developing some level of initial services methodologies that services partners can use.
In this scenario, the level of investment required by the product company is directly correlated to the confidence the services partners have in the market opportunity. If a well known product company is releasing a product predicted to be a wild success, there is less of a “prove it” requirement from the services partners.
Hot product: When product sales are rapidly growing, all product companies, regardless of the services strategy being pursued, have to satisfy the same need from services partners: enablement. The more services partners are enabled to sell and deliver the product, the more market share captured.
Maturing product: The final scenario that needs highlighted is perhaps the most difficult for a product company to navigate. This is when a product company pursues a “change mix” strategy and decides to adopt a more services intensive strategy. When this happens, existing services partner relationships must be reexamined. A product company cannot pretend that the shift in services strategy will have no impact on existing partners. Existing partners will be starved for information on the intentions of the product company.
So, there are four common scenarios where the needs of the services partners are very clear. Embedded PS organizations within product companies often do not internalize and empathize with these needs. The PS organization becomes too focused on making sure their own needs of securing customers and meeting revenue targets are met. The reality is that a clear majority of product companies need a robust, effective, and engaged services partner ecosystem. Understanding the needs of these partners is the first step to creating that ecosystem.
Tags: partner management