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Formalizing and Globalizing Channel Partner Programs

Chris Doggett, Director of Global Channel Sales

September 30, 2009

Presentation Focus

Review the creation of a formal partner program designed to:Leverage current capabilities and strengths

Provide predictable results, offer future scalability

Can be applied globally, accommodating regional differences

Differentiates the program from your competitors

Maximizes productivity and achieves ROI objectives

Offers partners benefits that make investing attractive

Approach is to use Sophos as a Case Study

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Agenda

BeforeNegative ConsequencesAfterPositive Business OutcomesHow We Did It

DesignPlanCreateLaunch

What’s Next?Best Practices & Recommendations

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BeforeRegional channel programs operate independently

Best practice sharing all but non-existent

Many groups lack resources to pursue goals and objectives

Marketing reflects product features and benefits only

Systems generally lack capabilities to track and manage contacts

Performance measurement lacking, most management anecdotal

No formal rules of engagement established in most regions

Approach to managing partners is specific to individual CAMs

Partners not able to access education, tools and information easily

Deal registration, lead and opportunity management lacking

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Negative ConsequencesProductivity of channel sales teams well below average

Partners reliant on Sophos for all sales support and activities

Ease of doing business is sub-par, labor intensive for Sophos

Unable to market to and through partners effectively

Smaller regional teams are largely reactive, unable to meet needs

Lack of metrics results in sub-optimal investment and management

Partner trust is low due to variability of interactions with Sophos

Program benefits and differentiators unclear, partnership not valued

Partner training very low, limiting knowledge to a few key partners

Competition for internal resources results in missed opportunities

Approaches and results vary greatly between regions5

STOP

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Overall Program Vision

LEVERAGE CURRENT STRENGTHSLEVERAGE CURRENT STRENGTHS

Many different programs ww(some are successful)

A few best partners, many underperformers (fulfilment only)

Proposition varies in geo's

Sales coverage models vary per region

Scalable performance and values based program structure

Partners as an extension of the Sophos sales force (beyond fulfilment)

Clear, diversified value propositions based on partner type

TODAY VISION

Limited value metrics in program

Limited incentive to utilize online training

High-touch not prioritized against performance and skill

High level of responsiveness

Leverage Sophos strengths into programs

Enforcement of certification

Programs to incentivize growth

Global automated deal reg/lead gen

Inconsistent partner planning

No dashboard view of partner’s performance

Automated business planning andstandardized scorecard

Incorporate customer sat metrics

Engage

Enable

Measure

Partner LifecyclePartner Lifecycle

AfterPartners able to access information & education easily

Quoting, deal registration and ordering available online

Rules of engagement are understood and valued by partners

Partner performance and contributions are measured & compared

Marketing activities markedly increase in volume and efficacy

All regional teams are able to leverage program materials & tools

Program benefits and differentiators understood and valued

Internal resources are able to be prioritized in terms of greatest need

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Positive Business Outcomes

Education volume skyrockets, partners skills and incremental contributions increase

Partners able to perform sales tasks autonomously, volume increases

Partners share leads and engage Sophos more often and earlier

Incremental new business increases substantially

Regional teams able to execute more programs with better results

Leading performers are recognized, partnerships strengthened

Productivity and scalability increases enable profitable growth

Partner trust of Sophos improves substantially, co-selling increases

Program and system development efforts yield highest ROI

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How We Did It – DesignConcept: clear differentiation, superior value, scalability for growth

Approach:Worldwide surveys

Stakeholder Interviews

Partner Interviews

Benchmarking

Industry experts

Sophos best practices

Resulting Information:What’s working, what’s not

How we compared to industry and competitors

SWOT Analysis, differentiators & core competencies 9

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How We Did It – Design: Guiding Principles

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• 1:1 Stakeholder Interviews• Partner Surveys

What Partners Value Most

• Industry Research• Subject Matter Experts

Sophos Key Differentiators

Industry Best Practices

• Partner Survey• 1:1 Partner Interviews

What Stakeholders Need

• 1:1 Stakeholder Interviews• Sophos Best Practices

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Differentiate SophosPartner ProgramAutomated Tier 3 Partner ProgramAutomated Deal Registration and Lead Distribution ProgramPartner-to-Partner Collaboration ProgramMentor ProgramStar ProgramSales Support SLAsIncorporate Customer Satisfaction Results

How We Did It – Design: Focus On Key Capabilities

Achieve Competitive Program Parity

Certification ProgramServices specializationServices Partner ProgramIncorporate Partner SatisfactionPost Sales Technical TrainingPerformance Rebates (LAR & VAR)Field SE Coverage

How We Did It – Plan: Program Elements

Partner EngagementProfiling and segmentation

Business value proposition

Recruitment plan and process

Partnership Value Proposition

On-boarding process and resources

Rules of engagement

Ongoing communications

Partner portal/automation

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How We Did It – Plan: Program Elements (cont.)

Partner EnablementSales training

Technical training

Sales support and teaming

Technical support and tools

Marketing support and tools

Pricing and margin model

Performance incentives

Partner collaboration

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How We Did It – Plan: Program Elements (cont.)

Partner Performance MeasurementPartnership planning & account management processes

Partner scorecards and assessment tools

Partner and end-user satisfaction

Effectiveness and ROI of program

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How We Did It – Plan: Budget & Financial Modeling

Guiding Principles:Overall Sales & Marketing spend in line with industry standards, so no net increase

Adjustments to partner rewards must be revenue neutral and balanced across tiers

Reallocation of marketing resources offset by increased productivity

Program BudgetingSignificant one-time investments to create new program were approved

Significant internal resource allocation (staff) to build and launch program

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How We Did It – Create

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Provide platform for developing expertise

All new partners enter as Silver Partners Limited investment to joinAutomated for ease of business Opportunity to FastTrack to success

Metrics recognize partner’s “total value”Capabilities – sales, technical expertisePerformance – revenue attainment, new business contribution

Benefits increase with partner’s commitmentAcross sales, marketing, technical and training support

Three levels to support partner goalsSilver, Gold and Platinum

Four possible margin scenarios:1. Partner originates new lead for Sophos2. Incumbent partner renews existing license3. Sophos supplied, partner is actively engaged4. Partner provides pricing and fulfillment only

This structure offers some unique benefits:Partners who invest time and effort into the sales process earn an explicit margin advantage over all other partnersPartner originated opportunities cannot be “poached” by any other partners based on price, regardless of their partner levelProfitability is more predictable, less gross margin erosion due to competition, registered opportunities are guaranteed commission

How We Did It – CreateCreate reward structure with protection

How We Did It – CreateCreate clearly defined benefits and requirements

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How We Did It – Create

Sales Developer

Identify business opportunities

Trusted Sales Advisor

Satisfy customer needs and close deals

Trusted Sales Engineer

Offer technical pre-sale support

Trusted Professional Services Consultant

Offer pre-sale proof of concept and technical consultancy

Provide platform for developing expertise

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Substantially improved user experience –easy, useful & personalized

Self-maintained company & user profile information

Local control of content & programs

Intuitive, streamlined training process

Enhanced marketing campaign tools

Complete information on our program

New partner locator on Sophos.com

How We Did It – CreateProvide platform for communications,training and partner management

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Comprehensive resource for managing all opportunities

Live pricing, quoting, ordering, deal registration, promotions

Many new features including:

Credit card ordering

Deal registration

Marketing promotions

Discretionary discounts

Smart filters & views

How We Did It – CreateProvide platform for efficient business

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Customized marketing programs &

Online lead generation programs

Co-branded email campaigns

Call blitz campaigns

Whitepapers, product evaluations, tools for web download

Trade show sponsorship

Seminar- or webinar-in-a-box

Print and/or online advertising

How We Did It – CreateProvide platform for better marketing

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How We Did It – LaunchPreparation

Program materials

Internal training

Communications templates

Presentation templates

Portal content

Launch ActivitiesWebcasts

Regional Events

Announcements

Portal login changes

CAM : Partner briefings23

Today’s Business Climate

• Selling IT solutions is more competitive than ever

• Many lines of IT solutions are suffering declines in demand

• Some vendors are turning away from the channel

• Customers are demanding more for less

• Cost of sales have increased

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How We Did It – Launch: Context

Our Value Proposition to PartnersThe new SPP is designed to recognize and reward partners’ efforts, with a business model that is more reliable and profitable than the alternatives

Our new program offers:– Higher growth rates with greater

retained margins– Better sales support, tools and

systems to make selling easier– Higher quality solutions that yield

satisfied customers who buy more– A recurring revenue model that

grows over time– Best customer support + a more

efficient program = higher profitability for you

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How We Did It – Launch: Messaging

Strategic Partners: The Sophos Outlook

High touch, proactive management

Significant investments

Best-in-class co-selling approach

Highest growth rates

More new customers ©Fo

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How We Did It – Launch: Messaging

We offer direct rewards for effort

We combat margin erosion

We reduce channel conflict

We protect partner investments

We offer the best quality products

We offer the best support

We offer predictable profitability

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Highlights of New ProgramHow We Did It – Launch: Messaging

What’s Next?

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Introduce new lead distribution and management processes & systems

Enhance capabilities and programs for regions with two-tier distribution

Introduce CAM Training Program

Implement advanced virtual technical training capabilities

Optimize systems for partners (workflow, usability, features)

Enhance partner performance measurement capabilities

Expand pilot programs showing best results and most potential

Introduce additional professional services opportunties for partners

Formally pursue larger partnerships (service providers, internationals)

Engage external expertise as needed

Leadership based on expertise and current role

Diverse team representing all stakeholders in the business

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Best Practices and Recommendations

Define business requirements, ensure systems can support them

Regional communications & collaboration throughout process

Extensive planning, preparation and internal training

Document all systems, policies and procedures

Engage key partners ahead of public announcements

Extensive testing (internal and external)

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Going Global – Program Design & Ownership

What to CentralizeValue proposition Profiling requirements and utilization Partner types and tiers (including Global level partner)Overall incentive structuresOverall marketing fund entitlement & utilization rulesContent management/entitlementTraining/certification requirementsPartner Portal structure (messaging, materials, tools)Global Partner Relationships

What to RegionalizeDiscounting levels and available incentives payoutsMarketing fund levels Partner Portal content (e.g., local events & marketing activities)Partner collaboration tools

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