30 - The Importance of C-Level Support for the Success of Channel Partner Programs - Paul Banco

>> Paul Bird: When it comes to establishing partner programs in your organization, there's a lot to do to set the stage for success, and quite commonly, the level of involvement and support from the organization's leadership is often underestimated. Today's discussion focuses on a topic for those who are trying to establish partner programs, or for even people that have partner programs but are struggling to maintain support from the C suite, to continue investing resources in it. And for anyone that missed our previous episode with Dorian Kominek on structuring partner programs as an entrepreneurial pursuit, you may want to have a listen as it serves as an interesting introductory conversation to today's discussion. 

Today's guest has over two decades of experience with channels, technology, innovation and leadership. He's consistently led high performance teams and has a proven track record for aligning himself with technology winners. And today he's the Chief Executive officer of 100% channel focused company. Today he's the CEO of Etherfax, a company that enables the exchange of document delivery and focuses on eliminating the need for fax boards, media gateways, and other telephony infrastructure. 

He's here with us today to discuss the importance of C-level support for the success of channel partner programs. Please welcome Paul Banco. Welcome to the show, Paul. It's a pleasure to have you here.

>> Paul Banco: Thank you, Paul, and I'm honored. And good morning.

>> Paul Bird: Good morning to you as well.

So let's start with the basics. How did you start out in the partnerships and channel space?

>> Paul Banco: Yeah, so, going back to my tenure, when I had a professional services firm, we repped several products. And what's nice about that is I've been on both sides, right? So repping several products and understanding the need of just support sponsorship to make my business successful back then just provided some great insight of what it would take to run a successful channel partner program. As you mentioned, I've been doing this for close to two decades now. Certainly a lot of failures, but they say, right, 1000 lessons learned in failure. And in today's environment, it's ever changing. I mean, partnerships are changing, resellers are changing. So, yeah, it's a moving target, and we continue to adapt and adjust.

>> Paul Bird: So tell us a little about what you're doing now at Etherfax.

>> Paul Banco: Yeah, so Etherfax primarily, I mean, you said 100%. It's about a 95% to 98% channel based company. And the reason for that is we can't run everything through the channel for certain accounts, just for whatever reason, but we do ensure that we take care of our partners with that. So we have a worldwide global partner program that has the ability to go in and solution sell with our products and services. So we have a team of about five that just primarily manages their channel, their partners, their resellers, and constantly getting in front of them.

>> Paul Bird: So let's get into today's discussion. It's commonly known that getting backing from the C suite for pursuing partnerships can be a, difficult undertaking. So how do you suggest partnership leaders within an organization communicate the importance of partner programs to the C suite who may not initially see the value of what they're doing?

>> Paul Banco: Yeah, very interesting. There are several organizations that I think are really floundering when it comes to that. Partnerships are pivotal. I mean, these partners hold the keys to the kingdoms, and, I mean, they really are your first foray into that customer. having executive sponsorship is pivotal. And what I mean by that is, at the C suite level, we're really focused more on innovation strategy back end, and we often forget what it's like to be on the other side of the grass, if you will, to make a successful partner program. So it's very important to balance the operational side of it, the strategy, the innovation, the financials, the roadmap. But you also have to remember, we are a partner driven company, and it's very important for our C suites, including myself. I tell my team all the time, listen, if we're going to run programs with partners and they need executive sponsorship and leadership, I'll be there. I will make myself available.

Now, I think the other part of your question is, and maybe I misunderstood, is it getting internal support from your C suite to run a partner program?

>> Paul Bird: Absolutely. For sure.

>> Paul Banco: It's interesting, my wife is going through this with her company right now, and I get to hear about it. Getting the C suite to see how important these partnerships are can be a challenge. Leaders have to be open, right? I mean, you hired these people for a reason, and if you're not going to listen to them, then why'd you bother hiring them? You have to be open to it.

We would all love the revenue to come direct and not shave points off and go through a partner program. And not every partner is going to represent our product the way that it should be represented. It's a tough balance, but you have to be as a leader, you have to be open to it and learn from your partners and learn from your internal team. Listen to what's happening in the market, because if you're the smartest person in the room.

>> Paul Bird: So in your view, what's the role of C-level executives in supporting channel partner programs?

>> Paul Banco: They have to be involved. I mean, they should be involved with everyone from the inside. Sales rep, if you have one, the account executive all the way up through the chain. I think their role is instrumental because if you're not going to provide the support to your team and it's not coming from the top down, then why should they care? Why should they care? Why should they continue to build a partner program and build a strategy around it? So that role, it's a pivotal role. You have to be involved, you have to help shape it, and you have to listen to the members that your teammates that you've employed below you to come up with ideas and suggestions and listen. Maybe there's some team members have a conflict on how this partner program should be run. And I think the role of the C-level executive should be, hey, let's diffuse it, let's figure it out, and then let's move forward. Ultimately, they have the final say.

>> Paul Bird: Now, you mentioned that your wife's going through some challenges with her company. So what are some of the common challenges that companies face when they try to secure C-level support for their programs?

>> Paul Banco: This isn't in her scenario. Her scenario is a little bit different, but I think a lot of the common problems that they face are, first and foremost, getting the C-levels to actually, number one, talk to you and listen.

Number two, understand why the value of the partnerships is so imperative. Number three, getting mind share. I mean, giving ideas, giving thoughts. A lot of C-level executives will just throw it off. Yeah, we're not going to do that. I don't even want to listen to you. It's just, no, this isn't the way the company is going.

They don't want to. So you have to present it, whether it's a business case, whether you just completely simplify it, trying to get the C-level Sundar. So, I mean, ultimately listen, there's only so much that you can do. And, I mean, if they're not going to listen, you may want to look elsewhere.

>> Paul Bird: Now, are there parts of the channel strategy that somebody should focus on when they're setting the stage to attempt to get buy in from leadership? Is this just a compelling value proposition or is it more focused, like recruitment of potential partners, be the top consideration? How would you suggest somebody approach that?

>> Paul Banco: Yeah, absolutely. And even in our business. Our reseller profile has changed. So approach it two ways. Number one, what is the message and what is the mission of your organization?

That's first and foremost. And then from a channel chief or channel partner account executive, you have to find companies that are going to align with your solution. You have the same values and these are the types of profiles that you need to bring in and bring to executive leadership. In my wife's scenario, she manages all the hyperscalers for her organization. So is she going to look at a small organization? No, they're not going to be valuable.

But is she going to look at to a large organization that could certainly enhance their portfolio, help them get in, understand where they play in the market, their types of customers. It certainly helps your case when going to the C-level saying, hey, this is why we should partner.

>> Paul Bird: And to expand on that, what's the role in technology platforms, other collaboration tools, even dedicated personnel for partner management? Do you think it's important to have all of that figured out before attempting to get leadership buy in?

>> Paul Banco: I think a lot of it should be figured out. I don't think nobody's crystal ball is working, not that I know of.

And I think you need to fail to learn. I think you need the overwhelming majority of that. But also, every organization is different, right? Nobody's DNA is the same, if you will. So you have to have the ability to pivot, you have to be flexible.

Things that don't bend tend to break. So I think you need the overwhelming majority of it. Listen, we've had partner programs for ten years and we're completely in the process of revamping our partner program because things have changed. Our partners have pivoted, they've transformed. We've learned these are the tools, these are the marketing resources, these are the necessities that we need to provide in order for our partners to be more successful.

>> Paul Bird: How do you think support from the C-level can influence decision making when it comes to partner program strategy? Do you think it could alter the path and ultimately lead to success of the partner program?

>> Paul Banco: Absolutely, 100%. C-levels bring a certain level or a certain level of experience from the entrepreneurial side? I think they. Absolutely. I mean, especially if you have a C level. As I mentioned, I've been on both sides of the fence here, who has experience. I think if you're going to bring and really establish a partner program, you should 100% bring in somebody at a higher level, C level, VP level, EVP level that has the experience behind to understand what it takes to run a successful program, but 100%. I mean, when you have the backing, when you have executive support, when you have executive support in anything, it makes your job tremendously easier in getting certain programs off the ground there. And they say, right, fail fast.

If you're going to run a partner program and it's failing, you either pivot quick, right. Use your C-level executives to understand. Have them mentor you, throw out some ideas, hey, listen, we know this partner program is great, but we're failing. These are the aspects. What support can I get from the C-level? These are the things we have to do. We have to invest more in marketing, we have to invest more in a partner management platform, lead generation and handing them off. We need a better process. So that's where C-levels could be really instrumental.

>> Paul Bird: So once you get leadership locked in and committed to support the partner program, what do you think you can do to kind of foster a culture of collaboration? To get the whole team on board to support the partnership initiative?

>> Paul Banco: An absentee level is going to fail very quickly. In launching that, you have to foster collaboration. You have to make sure that everybody has a voice on that team, make sure that they're being heard. You have to constantly, as a C-level, if you want this program to be executive, I mean, delegation is great. Don't get me wrong. We do have to delegate in our positions, but we have to listen to our team. So if you could foster an environment where there's a ton of collaboration, this is the team building this partner program with the C-level executive of sponsorship.

Like I tell my team all the time, guys, you're creating this. I'm, here to support you in any way possible. I want to understand what we're doing. I want to make sure that we don't say something that we can't do to put the company in a. Jeopardize anything that we may or may not do from a legal or risk standpoint. But fostering collaboration amongst a team to build the partner program and having a C-level, that's part of that. Delegating, listening, making decisions if needed, managing the conflicts certainly goes a long way.

>> Paul Bird: You've always said that if your reps, your channel chief, need you on anything, you'll be there. But are, there other ways that you would recommend that leadership can contribute to the growth and development of the actual partners?

>> Paul Banco: Yeah, absolutely. There's no doubt. So providing C-level sponsorship to your team is great. Talk about timing.

We just had our partner event, and one of the initiatives that I threw down to our team is I want to see our partners do more local events. I want to see our partners throw some marketing funds and do steak dinners and things of that. And by the way, you will get C-level sponsorship. So do you want the CEO coming out to your dinner? Absolutely. Do you want the CTO coming out to your dinner? We've made ourselves available because when the partner feels like, man, I got access to the CEO. I mean, imagine being able to tell my customers when Poop hits the fan. Not sure we can curse on this. When Poop hits the know, I pick up the phone and I dial Paul Banco, and I got access to him, or I dialed Rob Chicolo, the CTO. It makes the partner feel that much more special. People want to be heard, right? That's exactly. People want to be supported. We actually got it. I can forward you over from one of our resellers. I'll say it, Atticus Consulting. You may or may not know them, but they said, Paul, you getting on the phone with us, closed a major deal. And the fact that we were able to get you on when we needed in the middle of the day, unscheduled, closed a major deal. You got to be available. You have to be.

>> Paul Bird: That's awesome.

So all of this has to be measured. So from your perspective, what metrics or key performance indicators should C-level leaders focus on when evaluating the success of their partner program?

>> Paul Banco: So we have probably close to 400 partners, and I would say there's probably 25 to 30 great ones.

I mean, understanding our model, you have the partners that bring in a one deal, and they live on recurring revenue, and that's great for them, which forced us to kind of revamp that partner program. There's a couple of things that you need to look at. First and foremost, we look at the type of customer that the partner is bringing in.

If I give you 100 leads, are you closing on 90? I mean, that's a great closing rate. How much support are you needing from us? Are you just throwing it over? Or are you actually taking the time and investing in the resources needed to make the solution that you're repping for us successful? Number four, what are the resources? I go back to resources. What are you putting towards it? Are your employees getting compensated for selling us? Are we on your website, do you lead with our solution? We understand that of our partners and resellers, they rep several different solutions. But how do they rep us?

Business ethics, are they an ethical company, are they doing the right things? These are all indicators outside of just the financial side of it that we look for in a partner, because when we give a lead to a partner and our account rep say, oh, listen, this is a big customer, which reseller or which partner am I going to go ahead and pass this to? Because ultimately it comes back to the sales rep as well that's managing that. And we want to make sure our partners are successful. Are they getting complaints? Are our customers coming to us saying, hey, I've tried to reach out to the partner several times and the partner is not getting back to me. I don't want to do business with them anymorE? Those are a lot of the KPIs that we look at to ensure that we have successful partners.

>> Paul Bird: So what's involved with maintaining a long term commitment to a partner program, even through challenging times? Is there things that you can do to prepare for a situation where you need to convince the C-level to keep faith in the, original vision?

>> Paul Banco: To answer the first part of your question, what does it take to keep a, was it a long term partner or long term partnership program?

>> Paul Bird: A long term partnership program, yeah.

>> Paul Banco: You constantly have to adapt, first and foremost, and you have to adapt with your partners and you're not going to be able to adapt to every single one of them.

>> Paul Banco: I think getting in front of the partners and understanding, because listen, they're first, right? They are on the edge, right? They're the front lines. They're in that customers, they're understanding their customer needs. So constantly being in communication with your partner, and I think this is really important because I learned at our partner event, like, we released a product a year ago and some of our partners came up to us and like, well, we had no idea about your product. And we were like, well, shame on us. We send out newsletters and emails and all of this, but shame on us for your account rep not calling you and making you aware of this.

And I'm not saying call every partner. You're not going to be able to do that if you have hundreds of partners. But take your top 20 and constantly make sure that you are in front of them. Whether it be training, whether it's new product releases. Hey, let's just get together, right? Let's just get together. Let me fly out there. Be constantly in their face. My wife handles the Amazon relationship for her organization as one of the hyperscalers. It's 400 reps. She has to constantly be in front of these reps. Constantly, constantly, constantly. You go without two or three weeks without talking to these reps, they don't even know who you are anymore.

So part of having a successful Program is constantly in communication, and that also makes the partner feel important. So if you're in front of them more, they're going to feel more important. And whether or not they may feel more pressured to push you more or sell you more or leave you more, I mean, that's up to them to decide. But if you're constantly, constantly with them, I don't want to say in their face, but constantly communicating and making them known that you're there, that's going to lead to a long term partnership and a partnership program, and having the C-levels behind that. And also part of that. Hey, I got to take a ride out to California. Let me go visit one of our resellers out there or get on a plane. These are all pivotal. The C-level just can't sit behind a desk. Yes, decisions to this, yes decisions to that. They got to be out in front.

>> Paul Bird: So when things start to get challenging, how can you prepare and convince the C suite to keep faith in the original vision? I mean, a lot of people are experiencing challenging times. I've, seen some large programs get canceled this year. So how do you kind of reinforce that to get them recommitted almost?

>> Paul Banco: Well, you have to take what works, right? I mean, if the entire program is failing, you have to ask yourself, well, why is it failing? Are we just blaming it on the recession that's supposed to be here? Are we blaming it on budget cuts? And if you take that approach and you just say, well, let's just scrap the whole thing, that's not a strategy, right? I mean, you're just succumbing to what probably every other organization is subcoming to. So you have to take what's working in your partner program, and you have to stick with that. And you have to evolve, ultimately. Listen, a lot of C-levels, they look at numbers, right? We're the bean counters, right? I mean, we're bleeding cash. We can't afford to do this. We need to increase margin. And by increasing margin, we're going to take everything direct. I think both you and I know of a company that's done that, acquiring almost Their entire reseller channel, and it hasn't bode well for them. So you really need to take what works and then expand upon that. You may or may not get buy in, and that's really the only thing that you can do. Hey, this is successful, it's working. Let's build off of this momentum. Let's build off of what's working and continue, and let's pivot and let's revamp. Maybe we skinny some things down. Maybe we take a couple of points away. Maybe we come out with a new tier. There's always ways to make it work. But getting the C-level buy in again, there's only so much that you can do. I mean, you can lay out everything, lay out, know Jesus himself can come down and lay it out. Ultimately, you need to be working with a C-level that has an open mind.

>> Paul Bird: You gave some examples of visiting partners, coming to partner events, getting on the phone with large deals. What about the overall partner experience? And with strong C-level support, how does that affect the overall relationship?

>> Paul Banco: Having C-level support with your partner is tremendous. It's tremendous in some that the partner is going to feel, number one, highly confident and highly comfortable in putting this solution in to their customers, knowing that at any time of the day that they can pick up the phone or shoot an email. I need some C-level sponsorship. Makes the partner want to lead with you more. It's like buying a car. You buy a Mercedes that you go in for service. Here's your latte, here's your cup of coffee. Let me make you feel comfortable in this crummy experience that you're coming to to get your car service. Well, partners want to feel the same. They want to feel that they have backing. So that relationship is that much stronger when you have those relationships at the top.

>> Paul Bird: Can you share any specific example of a vendor's partner program that benefited significantly from a high level leadership commitment, or alternatively, one that faced some setbacks because of a lack of C-level support?

>> Paul Banco: Yeah, well, our partner program, but I'll take a perfect example. we're a huge partner with Lexmark. We have C-level sponsorship all the way up to the CEO. And that has been very, very, it didn't start out that way by any means, but it was very pivotal for mean, it was very instrumental for us. Now we have executive sponsorship, and what really was nice about that, having that executive sponsorship is it was pushed down from the top. I mean, it didn't get any higher. This is our partner. This is what we're going with. This is what we're leading with. I don't have any examples. I don't know if I could publicly say any examples of leadership or partnership, but a very big competitor of ours did not have executive. Well, I'm sorry. They had executive buying of destroying the channel.

>> Paul Bird: Wow.

>> Paul Banco: They had executive buy in, they felt that we needed giving away 45, 50 points. We're going to take that direct, and we're going to make up that margin, and we're going to get rid of the overall majority of the resellers, and we're going to keep two or three. We may even buy one of them, which they did for us. I almost want to send a Christmas card, thank you very much. Because they're feeling the pains of it now. So having a partnership and then destroying a partnership is, I would say by no means is any strategy. I mean, unless you just don't care about your product, your business, and what you're going to be perceived as. So, yeah, interesting. But it's even harder when you don't have a partner program. You're so used to selling direct now you want to build a partner program. Well, the partners, first thing. Well, do you guys sell Direct? Well, yeah. Well, I'm not going to compete with you because nine out of ten times the customer is going to want to go with the manufacturer, the company, direct. So why would I partner with. So now you have to come up with an entirely new program that sends a message, hey, we're more partner focused now. We're not going to compete with you by any means. And, if for whatever reason, and we do this, if for whatever reason, the customer has to come to us directly, and it can't be on your paper, we'll make sure that you're compensated.

>> Paul Bird: That's the best approach for sure. 

So as we start to wrap things up, what would you say is the most essential element for setting the direction of a partner program to ensure its success for a long time to come?

>> Paul Banco: There's a couple of answers to that. First and foremost, communication, I think, is key. Having support for the partner, for the partner program is also essential. And you need to have the ability to adapt quickly.

I mean, you have to change, especially if it's a new partner program. You're going to learn a lot of things, so you have to be willing to adapt and to change and listen. And then they're going to have to manage conflict here more than ever. I feel like that we have had more channel conflict this year, in the past nine years, since the inception of the company. So make sure, number one, you're transparent. Transparency is huge to partners. Some will get it and some won't. And what I mean by that is, hey, we have another partner in there already, and we have to protect that partner. We can't let you register this deal.

You would hope that it's appreciated on both ends. So transparency is key. I would also going back to communication, if you're going to make changes to your program and you're going to pivot, run it through your partners first, get their feelings, see how it's going to affect them. I mean, for the one company I was talking about, there were organizations that have built their livelihoods right now. Shame on them. For some of them not diversifying, but that have built their livelihoods. And the partner program was pulled and there they are left. So transparency is huge. Having a clear, as clear as you can be roadmap program, how it's going to benefit the partners. We just launched a new partner page, by the way, why you should partner with us, all of those things should be really set out clear before delivering your partner program.

>> Paul Bird: Well, this has been really insightful advice, Paul. I thank you very much for being a guest on our show today. It's been a pleasure having you here.

>> Paul Banco: Thank you, Paul, very much.