“Channel 102”: Developing

Successful Partner Programs

WW SPO Partner Development &

Programs team
Mike Wardley

© 2004 Hewlett-Packard Development Company, L.P.

The information contained herein is subject to change without notice
Agenda
- It’s all about the “Channel Value Proposition”
- Things can that hurt the “Channel Value Proposition”

- Channel Partner Plan - Readiness Elements

- The 10 questions that a “Channel-Ready” program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner
component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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 It’s all about the “Channel Value
Proposition”
Before you start, for a moment become a reseller. Lean, hungry aggressive and looking for
your next sale to meet your quota and keep you moving forward and in the game..

Resellers like products that sell, that have market pull and that have positive margins, but
can’t usually make enough margin from them to survive. This is your opportunity…

If you can come up with a value proposition over and above the product sale that is
attractive to resellers then you will have designed a value proposition that is program and
likely will have a winner in your hands. Most resellers like solutions :o)

The challenge is that if you’re in the product business that’s quite a leap to make.

So what element are available to you over and above a great product that everyone wants
that you can potentially include in the channel value proposition for you program:

-Services - Cross sell - Up-Sell - Consulting

-Annuities - Repeat orders - Follow-on - New business opportunity
- Upgrades - Competitive attack - Account control

etc…..

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 Things can that hurt the Channel Value
Proposition
Things that hurt the value proposition always exist so be being aware of them you will
have the chance to mitigate them Example of issues might be:

-You need to do lots of training for this product, it’s very complex to sell
-We do it all from HP
-You need to build infrastructure
-You will be one of 50,000 selling this
-The market is small or undefined
-The market confused and fragmented
-There is nothing but the product offering
-The product have a complex value proposition and long sales cycle with many
dependencies
-There are several better, more competitive offering

Note: All of the above can be overcome with the right value proposition. An example might
be: Who wouldn’t become a road sweeper for $1M per year and with guaranteed
employment for 3 years :o)

Resellers will attack what seem like impossible odds if the value proposition motivates
them to do it. Hence the value proposition is the most important component of a
program. So document it, test and communicate it to the wider program team
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 Channel Partner Plan - Readiness
Elements
As part of preparing a Partner centric plan several element need to be address. SPO
provides the “Partner Readiness Framework” to facilitate. The framework is a series of
matrices that cover the following topics:

• Executive Summary / Program Description

• HP Financials
• Channel Value Proposition
• Competition
• Marketing
• Sales
• Services
• Competency Requirements
• Operations
• Regional Plan

The most effective method to use and complete the “Partner readiness Framework” is to
ask a series of “questions” – the 10 questions that a “Channel-Ready” program must
address to be successful. Consider the following slide..

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

Does it all seem a little to easy?

More to follow :o)
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1. What is the offering and value
proposition to be sold to end customers?
Discussion:

• Must be able to define the target customers

• Must have a strong value proposition for end customers regardless of route to market (whether
selling direct, indirect, or both)

• Partners place high value on the technical components of a solution or offering

−According to CMP Research and CRN, they most highly value ROI to their customer

• The offering should consider the “whole solution” not just components of technology. Complementary
services, products, processes, tools, capabilities, etc. should be developed to enable customers to
successfully deploy the solution.
−Refer to the book “Crossing the Chasm” for more on this topic.

If you can’t say who your perfect customer is then how would you
expect a partner…
It’s still easy, you just have to think it thru and write it down.

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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2. Is this offering compelling relative to
competition?
Discussion:
• Partners must decide what offerings to sell based on the choices and alternatives that an end
customer has.

• An HP offering could be of good value, but if customers have better choices (competitors or other
alternatives) partners will either not sell the HP offering or will not be successful selling the HP
offering

Be honest, you must be honest about the competitive situation, it

may not change what you do, but if you’re honest you have a much
better chance of building an offer that is compelling, remember the
best product does not always win !
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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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3. What is the size of the total opportunity and
how much is the partner component?
Q1 Q2 Q3 Q4 TOTAL
Market size $ $ $ $ $
HP share % % % % %
HP Revenue
Direct
% of total
Indirect
% of total

• An assessment similar to this must be completed

Size is very important, especially when trying to work out which one to pick.
SPO usually pick the biggest because it usually offers the best return for our
investments.
But be careful, because we’ll also ask you for a forecast :o)
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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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 B/U and Segment: “What do you want the partner to do?”
DESIRED PARTNER ACTION
Conversant – Partner should be able
to talk about the offering
Engagement – Partner should be able
to engage with HP resources to sell and
implement the solution
Investment– HP desires partners to
make significant investments to
develop a line of business to sell and
implement the solution
POTENTIAL REQUIRED ELEMENTS
• WW and Region SPO, CSG-SMB, and B/U interlocked launch
and demand gen plans
• Marketing communications collateral that can be easily
absorbed and communicated to customers.
• WW and Region SPO, CSG-SMB, and B/U interlocked launch
and demand gen plans
• Marketing communications collateral
• Sales training (webinars; powerpoints; interactive on-line
training; instructor-led; translations considered)
• Value proposition to partner and for end customer
• WW and Region SPO, CSG-SMB, and B/U interlocked launch
and demand gen plans
• Marketing communications collateral
• Sales training (webinars; powerpoints; interactive on-line
training; instructor-led; translations considered)
• Value proposition to partner and for end customer
• Certifications; demo equipment; ISV training & partnership;
business case ROI; sales cycle; HP technical sales support; etc
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B/U and Segment: “What do you want the partner to do?”

•The more we ask the partner to do, the more important the
need for a value proposition to the partner for how his efforts
will produce an acceptable ROI

•Conversant: Small bet

•Engagement : Big bet

•Investment: Betting the business !

•SPO can not “make up” a value proposition for a

complex solution – it must be incorporated into the
development of the solution

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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 5. What is the value proposition to partners?
• Potential partner investments • Potential partner returns

−Training & certification −Reselling margins

• Cost of courses and certifications • HP Products
• Opportunity cost – time away and lost • HP services
billing hours • 3rd party products and services
−Working capital −Financing margins
• Inventory • Lease margin
• Receivables (potentially increases −Partner service margins
due longer sales cycles and • Profit on complementary services
acceptance conditions) that the partner can wrap around the
−Demo equipment offering (consulting; installation;
−Demand generation training; support; etc.)
• Collateral −Back-end vendor benefits
• Advertising • HP MDF and rebates
• Outbound call center • Other vendor MDF and rebates
−T’s and C’s
• Returns

• Potential partner risks

−Partner’s reputation and customer trust -
the total customer experience of the
partner’s customer

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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6. Is the partner value proposition compelling
vs competition?

Discussion:
• Partners will be evaluating HP’s offering with other options available
−Other options
• Other vendors
• Different solution approaches
−Evaluation criteria includes:
• Technical
−ROI to end customer
−Quality
−Vendor support over the lifecycle of the project
• Channel programs
−Profitability
−Availability
−Ease of doing business

Most partners have multiple relationships and are more than happy to
attempt to play one vendor of against another…

Know your competitors and document you partner value proposition !

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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7. What do target partners look like?

Discussion:
• Partner profile characteristics
−Geographic
• Region
• Cross-region
• International
−Capabilities
• Certifications
• Size
• Authorizations
−Segment focus
• SMB vs. Enterprise vs. Public Sector vs. SOHO

Document what you’re looking for, if you can’t then “Houston we have a
problem”

And if your perfect partner need to have 4000 PhDs on staff then you’re in
trouble !
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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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8. How many partners do we need, and how
will we recruit them?
ILLUSTRATION
Q1 Q2 Q3 Q4 TOTAL
Market size $1,000 $1,030 $1,061 $1,093 $4,184
HP share goals 2% 12% 22% 32% 17%
HP Revenue $20 $124 $233 $350 $727
Direct $1 $5 $12 $21 $38
% of total 3% 4% 5% 6% 5%
Indirect $19 $119 $222 $329 $688
% of total 97% 96% 95% 94% 95%

Avg sale / partner $10 $10 $10 $10

Number of partners 2 12 22 33

Net new partners required 2 10 10 11

Close rate 30% 50% 50% 50%
Partner "impressions" 3 20 21 21

• Must quantify assumptions of yield per partner, number of partners who are engaged and active, and number of
partners who we expect we need to “touch” in order to net to the required number of active partners
• Must ensure resources are available for effective recruiting:
− Collateral publication/mailing
− Call center Remember that forecast we talked about….
− Feet on street
− Roadshows
− Webinars Forecast /partner thru-put = # partners
− Advertising
− Public relations

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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9. What do we need to do to enable partners
to be successful?
• Training
− Partner personnel
• Sales
• Pre-sales
• Administration

• Systems
− Order management and logistics
− Benefits payments
− Sales compensation

• Tools

• Communications
− Web information
− Printed and electronic collateral

And if to enable partners we have to have an HP VP attend sales calls with

them, then give it up, and deploy you plan B !

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Training considerations: Partner Training Development Standards (we need standards
to communicate SPO Business Requirements to groups producing training for partners)

Dimensions
• Relevant Target Audiences
− Call center sales; field sales; technical pre-sales; See following pages
Trainers
− SPO Sales (selling the partner on the program)

• Objectives and competencies

− Sales– delivering the customer value prop
− Pre-sales skills – sizing and proposing See following pages
− Selling partners on the Partner Value Proposition

• Media and Translations

− ILT; Webinar; Powerpoint; Interactive Web-based
training; POD See following pages
− Ongoing maintenance funding including updating
courses with translations

• Course Architecture
− Duration and modularization of courses When is legal review required?
− Legal constraints and guidelines 20 minute modules in easy to drill-down
just-in-time-to find hierarchy
• Maintenance
− Delivery and translation funding agreement Ensure there is budget to maintain,
especially for translations and
Interactive applications

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Training considerations: Partner Training Development Standards (we need standards
to communicate SPO Business Requirements to groups producing training for partners)

TARGET AUDIENCES (proposed)

These roles should be considered when defining training

requirements for solutions and offerings to be sold through
the channel
Volume Products Value Products &
Solutions
• Partner call center inside sales Transactional selling & Solution selling and
customer value prop customer value prop
• Partner field sales

• Partner Technical pre-sales Transactional selling & Solution selling and

customer value prop customer value prop

A significant # of partners do not speak

English !

• Partner Trainers and HP Trainers Class Guides and Instructor Guides

Demo equipment

• SPO Sales • Identifying targeted partners

• Selling the partner on the value
proposition to make the
investment
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Training considerations: Partner Training Development Standards (we need standards
to communicate SPO Business Requirements to groups producing training for partners)

MEDIA STANDARDS (proposed)

Desired Partner Action

AWARENESS COMPETENCE INVESTMENT

Low PowerPoint
PowerPoint with Instructor notes
• Leveragable for both simple
relative complexity

PowerPoint with ILT and Webinar/Presentation

Audience size or

Instructor notes on Demand

No partner-specific • Leveragable for both
training – leverage simple ILT and
Marcom collateral Webinar/Presentation
on Demand
ILT – Student and
Instructor guides

Pre-recorded Presentations
on Demand with WW Interactive Web
High Subject Matter Experts Based Training
with translations
and budget for
ongoing
maintenance

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Effective Partner Programs: 10 questions that a “Channel-Ready”
program must address to be successful

1. What is the offering and value proposition to be sold to end customers?

2. Is this offering compelling relative to competition?
3. What is the size of the total opportunity and how much is the partner component?
4. What do we want partners to do?
5. What is the value proposition to partners?
6. Is the partner value proposition compelling vs competition?
7. What do target partners look like?
8. How many partners do we need, and how will we recruit them?
9. What do we need to do to enable partners to be successful?
10. What else will we need in order to execute in the regions?

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10. What else will we need in order to execute
in the regions?
• Launch coordination • Other partners (Microsoft & Intel; other ISV’s; other
• Demand generation HW or Svc vendors)
− Air cover − Contracts and relationships w/ HP
− Partner agreements
• Training
− Co-funding
− SPO resources
• PBM’s and Specialists - Selling the value prop • Other resources
to partners − Funding
• SPO call centers − Headcount
• Pre-sales support • Relative priority
− Other resources − Agreement on relative priority
• Technical support
• Systems and processes
− Order management and logistics
− Benefits payments
− Sales compensation
• Tools
• Communications
− Internal, Analyst Relations; Press Relations;
All of the stuff we’ve talked about now
External to partner has to be mapped into the regional
• Sales compensation and policies execution model and priorities…
− Does the offering contribute to retiring quota for a
business unit?
− Is there a new quota that will be applied? That said, if you’ve worked with WW
− SPIFF’s? SPO then there shouldn’t be any
− Rules of engagement and escalation processes regional surprised, not aleast from
• Partner contracts and addenda regional SPO…

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 Channel Partner Plan - Readiness Elements
Sample SPO Partner
Operations
Readiness Matrix

Key Owner / Target

Elements Description Contributors Date Status Comments
Sales Ops What will be required of Sales
Operations?
• Order management
• Escalation
• Reporting requirements
• Contracts
• Exhibits
• Financial Options (Purchase,
Lease, HPFS alternatives)
• Terms & Conditions (Returns,
Payment, Price Protection, etc)
• Account planning w/partner
(PBM)

Distribution What are the D/L specifics?

Logistics
• Enterprise and/or Commercial
Channel
• Physical product flow to and/or
through partners?
• HP Factory Services
• Distributor Services
• Channel Partner Services
• Other Partner Services (ISV, SI,
etc)
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 Channel Partner Plan – Readiness Elements
Sample SPO Partner
Regional Plan
Readiness Matrix

Key Owner / Target

Elements Description Contributors Date Status Comments
Regional Recommended Plan Contents
Roll out
Plans • Regional Launch Team (SPO,
RBU, Training, Marketing, Services,
HPFS, Executive Sponsor)
• Launch Date (Specify if different than
WW plan with reason)
• Specific Regional Requirements
for a successful program
• Specific regional risks to the
program success
• Regional success indicators for
the program (How will it be
measured?)
• Regional Sales Targets
• Integration plans for PartnerOne
(Partner Sales Targets and rewards,
etc)
• Channel partner identification
and engagement process
• Other partner identification and
engagement process (ISVs, Sis,
Other)
• Channel Communications Plan
(Pre-Launch briefing tours, Regional
Portal, Other)
• Training Plan (Channels, HP
sales-telesales-PBMs, ISVs, SIs)

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 Channel Partner Plan – Readiness Elements
Sample SPO Partner
Regional Plan continued
Readiness Matrix

Key Owner / Target

Elements Description Contributors Date Status Comments
Regional • Announcement events plan
Roll out
Plans • Demand Generation Plan
(con’t) • Marketing Collateral
• Sales Tools / Kits
• Channel Program Reporting plan
• Escalation process plan
• Launch as Pilot considerations
• Localization Requirements

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Quick Comment

If you could take a moment to fill in the questions below and mail them to the presenter it will
improve the quality and content of this training:

1. Did the training meet your expectations

1…10 - where 1 is did not meet your expectation

2. Did the training meet your needs in terms of “information” and content
1…10 - where 1 is did not meet your needs

3. Was the training useful to you in your current job or projects

1…10 - where 1 is not useful

4. Was the time at the training, time well spent

1…10 - where 1 is not well spent

5. Do you need more information or details about channels

Yes/No

6. What comment or feedback would you like to provide that can be used to improve the
overall quality and content of this training:

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