Episode #016 - Guest Rodney Foreman on Building Global Channel Programs

Transcription of Episode

Chris Battis:                  On this episode of Intent Topics, we have special guest, Rodney Foreman, who will be chatting with us about his experiences building and managing global channel programs.

Logan Kelly:                  Thanks, everybody, for tuning in today. Today we have a special guest, we have Rodney foreman. I am excited to have him on the show. It's been kind of a stop and start. So you've been a busy, busy man for the last couple of weeks. So Rodney, thanks for coming on the show. Why don't you tell us about yourself.

Rodney Foreman:          Hey, Logan. Thanks so much for having me on this podcast. I'm really thrilled to be joining you today. My background has been, over the past 15 years, really focused on growing channel businesses with software companies. I'm pleased today to join you to talk a little bit about my experiences and my thoughts and perspective on growing a channel business with software companies today.

Logan Kelly:                  Fantastic. Yeah, that's awesome. I think it's an important topic. I think there's a lot of nuance and a lot of disparity between good and not good, so I'm excited here. Kind of build some context here, talk to us about how you made your way into the roles, and some of the foundational experiences that you had before you went into the leadership space.

Rodney Foreman:          Well, I started my career as an engineer and then a network architect and got into product management with a software company. And that led me to an OEM leadership role where we were driving business with companies like Cisco to embed our technology into their solutions. And that was my entry into channels, and I led the largest software channel business at IBM, the middleware and cloud business, and that was a global leadership role, and almost $2 billion software business in the channel. I've fallen in love with that role. Working with partners around the globe, I really like the model where when you allow a company to be successful with your products, you create a win-win.

Rodney Foreman:          I love being a part of making partners successful with a company's software products in the market.

Chris Battis:                  Cool.

Logan Kelly:                  Nice. I think there's a few different flavors that I've seen, kind of like, some are highly sophisticated channel partner programs, some are just not. Can you talk a little bit about like, what's the structure of the channel programs that used to really work? And then why do you believe that's so effective?

Rodney Foreman:          Well, I think that what happens over time with most software companies is the program evolves and it becomes too complex, frankly. You shouldn't have to have a PhD in somebody channel program in order to maneuver it and make money, right? I mean, a really good channel program, you should be on floor one of a 20 story building and hit the button for 20, and then that elevator ride 20 floors in a average speed elevator be able to explain how to work someone's channel program and make money from program and leverage the program to be successful in the market. I think trying to have a lot of complexity in a channel program is not something that's going to attract the top partners in the market.

Rodney Foreman:          What I've seen is successful, indirect sales models that have a great channel program is those programs that empower the partner to be successful with your products, and focus on achieving that goal. So it's all about building skills. Getting a great number of partners sellers activated and having their mind share, because the partners that you work with today have choices. They don't have to sell your software product. They have hundreds of other software products they can focus on and sell today. So you have to make sure that you've got their mind share. Gaining their mind share of a partner and a partner seller means number one, you have the right training programs to build skills, because if they know your stuff, they're going to sell your stuff.

Rodney Foreman:          Number two, it's about incentives and rebates. What are you going to pay the partner in order for them to be profitable? Because they're investing in your business, so they need to be profitable with what they're selling for you. And also, the program needs to be one where there's no channel conflict. You're actually working hand in hand with the partner to sell into the market, and you're not competing against them, and in fact, you're sending them leads. What I've found is when you send a partner leads, that usually turns into five to 10X the opportunities you get back in return. Sometimes, a lot of software companies don't get that. They don't understand that passing leads and giving partners opportunity in turn, delivers five to 10X more opportunity back your way.

Rodney Foreman:          Those are some aspects of channel programs that I believe are successful in the market today, and it's just all about empowering partners to be successful with your products. If you think about it from that perspective, your program will be one of the best in the market.

Logan Kelly:                  Nice. So I see, and I have some of my background in the automotive space as well, which is kind of a weird parallel to the partner, trying to build that mind share and all this kind of stuff. One of the things that you kind of have with that manufacturer partner relationship sometimes, and I don't know if you agree with me here, is where like, the manufacturer comes in and tries to like, rah, rah, build some excitement around their product and stuff, but fails in a lot of other places to support the partner, right?

Rodney Foreman:          Right.

Logan Kelly:                  It's like, here's the incentive plan, right? But if there's no clear path to getting to that incentive plan, it doesn't matter, right? So what are some of the things that you've seen in like empowering that partner? It sounds good, but what are some of the things that you've done, or some of the things that you've seen done or like, like tactics to actually empower that partner?

Rodney Foreman:          Well, one thing that works very well is making the certifications that you obtain from the vendor to allow the partner to sell, recognize in the market. If you have a certification program that becomes well known, that people can put on their resume and say, "I've earned a certification in selling XYZ product," that means they've gained some skills that are valuable, that employers want in the market. So one thing that I've always tried to do is make the enablement and certifications that are achieved by partners well recognized in the market is something that people want and want on their resumes.

Rodney Foreman:          I mean, for the longest time, for example, Cisco having various Cisco certifications on your resume was something everybody wanted, now it's evolved to VMware and other vendors having that skill and being able to say, "I am a certified technician or certified seller of XYZ product," and have that as being recognized in the market as a skill that is valuable, is something that I think is really important that vendors need to achieve.

Chris Battis:                  I agree. I have a background, I was at HubSpot, and they have a certification program. They've actually started working with some schools, some universities and colleges, and some of these students are getting certifications coming out of college. It's helping them get jobs. That's really neat. We need to see that happen.

Rodney Foreman:          And that's smart, Chris. That's very smart. The earlier you gain that mind share, the better. Companies that are going into universities and making their products and building skills on their products with college students or even early, that's very smart, because you're very early in gaining that mind share in the market. And that just builds brand awareness and extends the market reach. And so I think that's very smart for companies that are doing that.

Chris Battis:                  Yeah. It's interesting, because as a company, there is kind of a tipping point for where that is globally recognized, the certification that is. And so there has to be like a point at which it's recognized, and that takes lots of people, right? Because we could create a certification here at Union Resolute and be like, doesn't mean anything. So it's a pretty big ask, right? To set up that program and put that together.

Rodney Foreman:          Yeah. And if you couple your certification with things that are hot in the market, that's also something that's important. For example in the software industry, digital transformation, artificial intelligence, things like that are very hot skills right now. So if you associate your product certification with those hot skills in the market, more people will want to obtain that, and therefore you'll have inherently a lot more marketing and a lot more sellers in the market.

Logan Kelly:                  Interesting. So kind of the growth hack if you're looking to build that channel program or really expand that quickly, it's like align with the hot stuff in the market and you might actually surpass somebody who's maybe, their big certification they're celebrating is hardware or some infrastructure thing. So interesting, that's really [crosstalk 00:12:52].

Rodney Foreman:          I've actually seen companies that actually have better products are not effective because their competitor actually has more skilled people in the market. So you may have the best product, but if you don't have the mind share and the skills of people in the market, you're not going to be as successful.

Chris Battis:                  Talk to me a little bit about like, what if you're in the channel and you're working with other companies as part of an engagement, how would that work? There's going to be companies that maybe ride the coattails of others' mind share, have you seen a lot of that?

Rodney Foreman:          Yeah, sure.

Chris Battis:                  Talk about that.

Rodney Foreman:          Yeah, I mean, if you're with the right partners who are the trusted advisor to the customer, you may have a company that starts a project with a customer but another company can win that business just simply because they have the mind share of the partner who is acting as the trusted advisor. I've seen that happen many times, where a partner from a competitive company has actually started a project, but a different company won the business, because they actually have the mind share and they have more skills within the partner that's driving the project with the customer.

Chris Battis:                  I bet you have some pretty crazy war stories about channel conflict and stuff like that. In your role, have you had to kind of moderate some of that stuff?

Rodney Foreman:          Oh, absolutely. When you're a global channel leader for a software company, those calls come almost every day. But I'll tell you that, and I say this a lot and it's true, smart sales people are the CEOs of their territory, and they are leveraging the partner as a free extension of their team. Partners can be a huge advocate and can extend your reach into your territory, and where you as one person working a territory can only touch so many accounts. If you're leveraging partners as an extension of you and an extension of your sales team, you touch many, many more customers. The most successful sales people in the market are doing just that. They are leveraging the partners as an extension of them.

Rodney Foreman:          They are allowing them to work accounts and drive sales, and it's just a great model. You can make your numbers just leveraging partners alone if you do it right.

Chris Battis:                  Yeah, you almost become their sales manager, they just don't work for you, yeah.

Rodney Foreman:          That's exactly what smart sales people are doing. They are doing the account planning, they treat the partner as a part of their team, and it works very, very well. And for the company you work for, instead of hiring more and more sales people to try to extend your reach in the market, which is very costly, just get more partners sellers. It's been proven time and time again that the channel is the most profitable sales model you can have. So it baffles me, some of these companies that have finance people that are just saying, "Well, if we hire more sellers, we will inherently have more quota distribution, and therefore the company's going to make more money."

Rodney Foreman:          And actually, the opposite of that happens, in that you only have so many productive salespeople. You now have a lot of overhead, and you actually have not effectively extended your reach into the market. So this notion that, I'll just hire more and more sales people and therefore I'll make more money, is a bad theory. It just does not work.

Chris Battis:                  Oh my gosh, yeah. And all that comes with employees, it's more than just them hitting a number. There's so much overhead and HR and all that, and the attrition.

Rodney Foreman:          Exactly.

Chris Battis:                  On a different thread, but similar, we talk about kind of outsourcing sales outreach versus in house, and it's a very similar concept. There's pros and cons, and it depends on your business, but it definitely makes a lot of sense to just extend your reach out externally than internally.

Rodney Foreman:          Yeah. You got to build a partner ecosystem, that's the other thing. There are different types of partners in the software industry, you have resellers, if you are two tier, you're leveraging distribution and VADs, the GSIs, global system integrators. Great way to get your product in the market is leveraging GSIs and including your product as part of their solutions. And then more and more service providers are growing in the software market today as well, so it's important for a software company, you got to build a partner ecosystem, all types of partners, and your program has to support that ecosystem of partners.

Chris Battis:                  Yeah, it's interesting. There's a lot of different ways to be a partner, for example, prior to my HubSpot days, I was in agency, but I really didn't sell much, I was just services. Because that partner ecosystem is pretty tight knit, everyone kind of knew each other, and everyone was like, "How are you so busy? What are you doing? What's the trick?" I just committed to services, and at the time, a lot of people weren't doing that, and it just speaks to the need there. We actually gained a lot of business because people need a lot more than just the software or the technology. They needed it implemented. So I'm a huge fan of the service side of that.

Rodney Foreman:          Yeah. Well, and a lot of companies, Chris, software companies, are moving to a SaaS model. So with SaaS, you're dependent on the customer renewing their subscription to your software, and if you don't have good partners that are successfully implementing your products and making sure that the customer is realizing value from the product, they're not going to renew, and therefore you're not going to get revenue. So in a SaaS model, partners make the product sticky, right?

Chris Battis:                  Exactly.

Rodney Foreman:          They make sure that you're going to get that renewal every time, and that the footprint is going to grow. That's the other thing that smart software companies are doing today is they are creating a platform, and then they have multiple products that sit on that platform. What that allows you to do is establish a foundation in the customer environment, and then sell again and again and again, and then your footprint and the amount of revenue you're obtaining from customers grows over time. And that's just very attractive to Wall Street. It's just a great way to have a sustainable, reoccurring revenue business.

Chris Battis:                  Yeah, that's huge. I love that point. I lived and breathed retention for several years, right? And it was very interesting to me that the sales team and the services team, this is internally, that they're so different, right? Because they're very much required of each other, right? Like you need a new business, but then you need the success, and then the cross-sell, upsell motion can happen, and then you just have to retain. It's very complicated, but those things need to be aligned and in sync for success. And you're right, Wall Street is very aware of the value of retention at these SaaS companies, as they're figuring out how to value these companies and etc.

Rodney Foreman:          Well, and a lot of companies are now creating these customer success teams. And the reason why they're creating customer success teams is because of what you just mentioned. The sales team and the services team are not working in harmony, in order to make the customer, on an ongoing basis, successful. The sales guy is moving on to his next customer, trying to meet his quota. The services team is poking the closest alligator at their feet, and nobody is working with your install base to ensure they're successful, so then customer success teams emerge. What's funny to me as a channel guy is why aren't you leveraging the partners to drive customer success.

Chris Battis:                  I love that, yeah. There you go.

Rodney Foreman:          It's a lot lower cost, and drive the benefit of customer retention into the channel, into the partners, and a lot of companies aren't doing that successfully today, and it just baffles me why they're not.

Logan Kelly:                  Well-

Chris Battis:                  I know, and it ... Go ahead Logan. Yeah, sorry.

Logan Kelly:                  You talk about incentivizing and the different ways to keep mind share in sort of the front part of the sales process.

Rodney Foreman:          Yeah.

Logan Kelly:                  Are there ways that you've thought about, or ways that you've done to incentivize? Because if I'm the partner, it's almost like the sales guy, right? So are there some ways that you've seen the sort of incentivizing of the retention part of the process?

Rodney Foreman:          Absolutely. Well, partners also want that reoccurring revenue, right?

Logan Kelly:                  Sure.

Rodney Foreman:          The same as software companies do today. So if you pay them on that reoccurring revenue, then they have a vested interest to make sure the customer is successful with your products. Now, I don't believe in paying partners just to pay them. I believe that if a partner brings you a customer, they source opportunity, and they drive the implementation, they should be paid at a different level than if they're just fulfilling.

Chris Battis:                  I totally agree. Yeah.

Rodney Foreman:          Right. So there's different levels of rewards with that reoccurring revenue, but I do believe that partners should take part in that. And you can create programs that incent them, but also incent them at the right levels based on their participation in the customer journey, right?

Chris Battis:                  Yeah.

Logan Kelly:                  Yeah, interesting. I think we're running out of time here. But if you were to hop into a company, and you kind of had to build a partner program from scratch, what are three or four of the things that you would really be focused on, say in the first couple of years to get that partner program up and running, and really effective?

Rodney Foreman:          Well, one thing that a lot of companies do is they think that recruiting hundreds of partners is the answer to the channel, and it's not. It's about recruiting the right partners in the market that align to your products and strategy. And I think that's the most important thing about building a channel program is making sure you have the right partners, and knowing the market globally and knowing partners around the globe. It can be very valuable to you if you get the right partners in the right regions, so that's kind of the basics of a channel program is having the right partners, and it's not about an abundance of partners.

Rodney Foreman:          Also, it's about empowering the partner to be successful. So as I mentioned, building skills and rewarding partners for building those skills, and then a program that captures their mind share is very, very important. And you have to create a program that supports an ecosystem of partners. So you have to have aspects of your program from a business and contractual model that is attractive to different types of partners, or else you will not attract and build an ecosystem of partners, which is needed today, you can't just have one type of partner. Partners are evolving today. The resellers today in the software business are becoming service providers. VADs, the distributors, are becoming aggregators of solutions, pulling multiple products together to create an industry solution, and that's where they're obtaining their value in the market today.

Rodney Foreman:          GSIs are also building end to end solutions, leveraging multiple vendors, and they are becoming more and more the trusted advisor of enterprise accounts. And all of those partner types are evolving and changing, you have to make sure that your program evolves and changes with the partners. This one size fits all approach and thinking that your program today is going to be the same five years from now, you're dreaming. You have to be able to be flexible, and make sure that your program adapts to the changing market and how partners are evolving in the market today.

Rodney Foreman:          The other thing I'll add, guys, is measuring the success of your channel program is really, really important. And having the right KPIs in place to measure the effectiveness of your channel is important because that's how you're going to get more investment in your channel program going forward. So keeping an eye on how much business, how many new customers is the channel bringing me, how much revenue am I obtaining really, from the channel, and how many deals are partners driving in the end for me, and how many customer references are partners generating for me. Those are some KPIs you've got to have in place and have agreement from top level executives, that these are the KPIs and these are how we're going to measure the channel, or else you're going to have a nightmare on your hands, trying to show that the channel is successful in your business.

Logan Kelly:                  Yeah, that makes sense. So in the experiences that you've had, have you seen kind of the ... Obviously, they say like, what you measure is what you pay attention to, right? So have you seen things where the manufacturer is kind of focusing on the wrong KPIs? Or what are some KPIs-

Rodney Foreman:          Oh, absolutely.

Logan Kelly:                  Yeah.

Rodney Foreman:          Yeah, absolutely. It happens all the time, where people that don't understand the channel are trying to measure it, and they measure it the wrong way. I see it all the time.

Logan Kelly:                  Interesting.

Rodney Foreman:          The thing with measurements is there's a lot of aspects of the channel that you just can't measure. There's some inherent values to the channel, and then there's some implicit values. So you can't measure, for example, the fact that a partner started a project with a customer and they recommended your product as the foundation for that project, but then they didn't necessarily drive the sale. There's value in that. There's great value in that partner touting your brand and telling the customer it is the best, but you can't measure that. So one thing with the channel that's tough is there's some things that you just can't measure that are just inherent value in the channel, and then there's some things that are implicit that you can measure.

Rodney Foreman:          You have to appreciate both of those things in order to really evaluate the value that the channel is bringing to your business.

Chris Battis:                  Rodney, what do you do when that goes wrong? Have you seen that go wrong? And what would you do? How would you adjust?

Rodney Foreman:          Well, it's all about marketing your channel success within the company, and that seems to be an ongoing focus for most channel organizations within software companies today. You spend a lot of time marketing the success that you have. And frankly, nothing speaks louder than a win, where you advertise that the partner has brought you a key win, and you just beat that drum within the company. And nothing speaks louder than a customer win that a partner has brought you, but it's an ongoing battle for channel people today. People that are in the channel are constantly trying to show their value. And because this term, overlay, is used a lot, frankly, a term I don't like too much.

Rodney Foreman:          There's this notion that the channel is just riding on the coattails of the sales team, and you've got to get rid of that notion, and you have to make sure that you're really showing the true value that the channel is bringing. I would personally try to get rid of this whole overlay term and notion, because the channel brings much more value than that term implies.

Chris Battis:                  Sure. That makes sense. What are companies doing wrong in the channel? Do you have any observations there?

Rodney Foreman:          Well, there's a lack of commitment sometimes with the channel. They're not truly committed. It has to be a part of your strategy. And when you create a go to market plan for a product, the channel has to be an integral part of that. The channel has to be an integral part of your investment and your strategy. If it's just an afterthought, and you're just using the channel to try to make a little extra money or something, and it's not an integral part of your strategy, it will not be successful.

Chris Battis:                  Yeah.

Logan Kelly:                  That's interesting, so-

Rodney Foreman:          Yeah, that's where I see companies go wrong. It's just a pure lack of commitment to the channel, and then that's where it goes wrong.

Chris Battis:                  Yeah, lack of authenticity even. Yeah.

Rodney Foreman:          Right.

Logan Kelly:                  Yeah. So that's like when the go to market strategy, the marketing team needs to get involved or the creative team to get that material out to the partners.

Rodney Foreman:          Absolutely.

Logan Kelly:                  And that's really where the sales enablement piece comes into to this, right? And the training and the certification, that's got to be thought about as you launch-

Rodney Foreman:          Yeah, and you mentioned marketing, when you're creating assets for marketing and you're creating marketing campaigns, you have to think about, "Well, how are we going to make this successful with the partners? Do we have a platform, a marketing platform, that our partners can leverage, where they can apply their brand and promote our products?" Marketing has to think about that, and everything they do, is this going to work in the channel? And quite often, again, the channel is an afterthought when it comes to marketing, and it shouldn't be. It just should be an integral part of what you do when you're developing campaigns to make sure that those campaigns will work in the channel.

Logan Kelly:                  So it's like there's sales and marketing alignment, and kind of the next step after sales is basically your partner, and if your sales and marketing is aligned, but your partner program is not, then you've got an issue. Is that kind of what I'm hearing here?

Rodney Foreman:          Exactly. Yeah, that's exactly right.

Logan Kelly:                  Yeah, that's interesting stuff. So where's this going in the next five to 10 years? What are some of the things that you're seeing? Changes either in the tech of like, sales enablement, you talked about digital transformation, what are some of these things that you're seeing?

Rodney Foreman:          Well, I think that there's going to be more OEM partners, where software vendors embed parts of technology, instead of products in whole. I think there's an approach today with partners where you're trying to get them to embrace an entire product, and embed that in their product to go to market. Why not take pieces of the product or key parts of your technology, put some value and price on that, and allow vendors to leverage that? I think you'll see more of that happening.

Logan Kelly:                  Yeah, like a Twilio kind of play. You are talking about, like APIs, where you can kind of get a piece, but you don't need the whole thing? Is that-

Rodney Foreman:          Exactly.

Logan Kelly:                  Yeah, interesting.

Rodney Foreman:          Exactly. And it goes beyond APIs. APIs are important, don't get me wrong. APIs are very important, but it's about allowing segments, if you will, or parts of your technology to be embedded in other ISVs or software company solutions, or even hardware company solutions. I see more and more with Lenovo, with Dell, with Hitachi, Fujitsu and others, where software is becoming the differentiator for the hardware. So if you allow those hardware vendors to embed parts of your good software technology, it can add value to their solution, and I think you're going to see more and more of that. I think the traditional reseller will have to become a service provider.

Rodney Foreman:          You're not going to survive just simply reselling a product. You're going to have to sell a solution to the customer, and you're going to have the skills and ability to implement that solution, or you're going to get left behind in the market. And as I mentioned earlier, VADs are going to have to be that aggregator of solutions, bringing together different software vendors' products to address an industry need, or the VADs are going to be in trouble, and the GSIs are becoming more and more important. And what's key for software companies with GSIs is to understand their strategy, their focus and their solutions they're delivering to the market, and being able to articulate how you add value to that.

Rodney Foreman:          Trying to get a GSI to resell your software, you're wasting your time. You've got to be an integral part of their products and their strategy, then they become interested in your product, and also, you have to have the right business and contractual model to work with the SIs today. In my experience, I've created some really good best practices with regards to business and contractual models that work with different types of partners today, and you really need to perfect that in order to have a successful channel.

Chris Battis:                  That makes sense.

Logan Kelly:                  Interesting. Cool. So to wrap this up, what value are you looking to provide this space? Because I can see there's a lot of passion, a lot of knowledge here. So like, what's the value that you're going to provide this space over the next five to 10? What are you working on? And that kind of thing.

Rodney Foreman:          Well, I've got a number of opportunities, and I've been consulting with a number of companies, and I think I'll either be a global channel leader for a company or potentially a CEO of a company that wants to really leverage the channel to grow and scale their business. I think that's what's in store for me in the future. I really have gained a lot of knowledge and experience over the past 15 years being a global channel leader, and built some long term relationships with some key partners, and I hope to leverage those relationships and that knowledge in the future to do some good for the channel, because it is a great model for software companies that are looking to expand and extend their reach into the market.

Logan Kelly:                  Nice. That's exciting stuff. That is awesome. So any last pieces of advice to companies that are either struggling with their channel, looking to grow their channel, or even maybe thinking about whether or not they should build a channel program?

Rodney Foreman:          Well, I think it's important to understand up front what your strategy is and what you're trying to achieve in the channel, and make sure that you have the right investment behind it. Dipping your toe in the channel is not something that works. You've got to be committed to it, and when you're committed to it, it delivers results. I've never seen a company that's committed to the channel, and implemented a very good channel program, it always delivers results. I've never seen it not work. If you got the right level of commitment and investment, the channel delivers results for you.

Rodney Foreman:          So that would be my parting advice to companies that are thinking about growing their channel or establishing a more robust channel business is you need to be committed to it. You need to have a strategy, and you need to make sure you're prepared to invest, and it will pay results. It will deliver results for you when you do those things.

Chris Battis:                  Very nice.

Rodney Foreman:          Yeah.

Chris Battis:                  Cool. Well, Rodney-

Rodney Foreman:          Thanks for the opportunity, guys. I really appreciate the opportunity to have this podcast with you. This is an important topic today, because companies are really struggling for ways to capture more customers, to grow their customer base and extend their market reach, and the channel is the way to do it. So this is an important topic today.

Chris Battis:                  Awesome. Well, Rodney, thank you so much for joining us on Intent Topics. This wraps up the episode for today. I'm Chris Battis.

Logan Kelly:                  And I am Logan Kelly. Thanks everybody for tuning in. Please give us a five star rating, and follow us on whatever podcast app you are listening on, and we will see you next time.

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