Annual Recurring Revenues

Annual recurring revenues are a fairly straight-forward metric. Annual recurring revenues are the source of truth for business. Annual recurring revenues are the source of truth for business because it tells the actual revenue recognition. To calculate annual recurring revenue, add up the expected total yearly billings of the customer’s annual subscriptions and usage fees. Annual recurring revenue is also used in determining other metrics later on.

Average Revenue Per Unit

Average revenue per unit is most used in a business with subscriptions and fees that may vary from one customer to another. To calculate average revenue per unit, divide the total revenue by the number of subscribers. This is helpful when done by product line to help determine profitability and growth.

Conversion Rates

Most recurring revenue products offer no-cost trials. While this is a great way to entice people to try products, finding out your conversion rates can help you understand if you are attracting the right people for the no-cost trial, if the free trials are converting to paying customers and what products are most popular.

For example, a lot can be seen about the conversion rate of people who visit a website versus the number of people who sign up for the free trial. One can then calculate the conversion rate of free trials to paying customers. These conversion rates give insight into the behavior of current and potential customers, the usability of our website and the popularity of individual products.

Lifetime Value and Customer Acquisition Cost Rati0

These two metrics, when compared together, can give a better understanding rather than just customer acquisition costs alone. First, let’s look at the customer acquisition costs. This metric will help understand how much it costs to bring on a new customer. To find this metric, we add up all sales and marketing expenses and divide that by the number of new customers added during the same time. Wish customer acquisition cost, the lifetime value metric can be found. Lifetime value metric predicts the profit the company could make from a single customer for the entire life of the relationship. For this calculation, take the average revenue per account and multiply that by gross margin and customer life.

Then take lifetime value and compare it to customer acquisition costs. The ratio should be three or higher. If it is not, there may be a hidden problem in either not enough value from each customer, or exceptionally high costs to acquire customers.

This is a very telling metric.

Customer Net Profitability

Customer net profitability will help determine if money is made or lost form a customer over the lifetime of that customer. A simple formula to calculate this is to take the lifetime revenues from that customer and subtract the customer acquisition costs.

This is a great metric to look at to help determine where profitable customers are, and by that, we can begin to target additional similar type of customers.

Retention and Churn Rates

At the heart of every recurring revenue business is loyalty and keeping current customers happy and engaged. Without this, the business churns through customers and spends lots of time and money to acquire new ones. Retention rate is a percentage of customers that the company maintains from year to year. Churn rate is the percentage of customers that a company loses from year to year. Retention rate high and churn rate low is the key.

Examining these metrics across different periods of time and different product lines can help identify where the company is doing well, and where it needs improvement. Increasing retention and decreasing churn will help all other metrics improve as well.

These are just a few metrics to leverage for understanding a recurring revenue business. The more key financial metrics for business decisions based on the data are understood, the more likely the business is to grow recurring revenue income as profitably as possible.

There is still time to join Theresa at HostingCon in New Orleans on Sunday to learn more about partnership best practices, recurring revenue and other topics to help grow your business. Register here.

Source: TheWHIR

Defining the priorities and goals in the vendor/partner relationship establishes a framework to build upon. Partners should agree on what the priorities and goals are and who is responsible for them.

A good, basic joint business plan will bring all parties together to agree on priorities, goals, responsibilities and time frames.

It does not have to be anything fancy, lengthy or require weeks of effort. But it does need to provide the documentation on what the partnership is based on and why it’s being done.

Some critical elements of a business plan for a vendor/partner or partner/partner relationship are:

Clear Objective Unified Goals

This is the first step in creating a plan together. All the goals in the plan need to clearly state what the goals are and how it benefits both parties. It is at this stage that partners can clearly define the value propositions to each other and if the value propositions and joint goals align, then the rest of the plan will come together far more easily.

Stakeholders and Responsible Parties

Once the goals of the relationship are defined, stakeholders and responsible parties for each objective along the way are mapped. More than likely, this will be a combination of both the partner and vendor teams to bring the goals over the finish line.

At this stage, it’s extremely important to define ownership about who is accountable.

Timeframes

Next up would be a best-case timeline. As with all goals, timelines towards success are needed. Drawing a line in the virtual sand helps prioritize actions and base other activities around the completed outcomes. Be cautious not to be too “set in stone” with them though. Sometimes it’s necessary to reset expectations due to things out of the partners’ control. Revisit the plan and adjust as necessary.

Milestones

As with any good plan, milestones or markers of progress should be built into the planning and review process. These are the “mini goals” within a larger goal framework. These milestones will ensure that the plan is on track, and that the teams are moving forward with regard to the specific goals. Often times, these are also good markers for other activities that can be done to bolster goal related efforts, like marketing or training.

Review Cadence – When the business plan is initially laid out, the cadence of how the partners are going to check in with one other to ensure everything is on track should be established. Best practice is a formalized QBR of some kind quarterly or every other month; along with a weekly or bi monthly status check with documented accomplishments, next steps, and open issues.

The next critical step in any ecosystem is setting up the communication channels. Research shows that communication is one of the biggest stumbling blocks in partner/vendor relationships. It seems that we often struggle to get and keep this aspect working. Partners can establish guidelines for communication models that work most of the time.

People have different ways they take in information. Some like to read, some like to watch, some like to do. And in today’s world, there are many different ways to consume information. If we want to get communication to work, then we need to commit to a multi-channel, multi-format process for communicating with the teams.

Some of the most important factors to consider:

Be Consistent

The best way for us to establish communication channels with vendors and partners is to become consistent and predictable in the time and type of communications we push out to our ecosystem.

Communication channels need to be at regular, predictable times and formats. For example, if communication is through a a monthly newsletter, send it on the same day every month. This pattern will set up as an expected way for partners and vendors to receive information.

Format

As many studies have shown, people need to see, hear and talk about something seven times before it is committed to memory. Studies also show that people learn in a variety of ways, so we should consider at least 3 different delivery mechanisms for messages. As a best-case scenario, the top three should be email, video and social. These 3 types of communication have shown to be the most accepted and successful ways to communicate with vendors and partners.

Be Relevant

The biggest difference between successful and unsuccessful communication strategies comes down to relevance of material. The more relevant the message is to the audience receiving it, the more likely communications is well received. Consider a newsletter packed with marketing information. A developer or other technical person is not going to read the newsletter because it is of no value to them. Likewise, a newsletter with only technical content would be glossed over by a salesperson. The closer you can align your content with the reader, the more effective your communications become.

Enable Communication at All Levels

Establishing communications using the best practices noted here will hit most of the communications channels we need to address: sales, technical, marketing, development, and executive. Depending on the vendor chosen and the strategic nature of the partnership, aligning at the executive level is a critical best practice often overlooked.

Again, like the business planning exercise, this does not have to be a big production; instead it is a connection between the executive levels in each organization to ensure they are in alignment with the strategic visions for each company. As much time as we spend making sure the product, sales, technical and marketing is in sync, it can all be washed away if the strategic vision for either the partner or vendor changes. Making sure communication is enabled within all levels of the organization is a best practice for success.

In conclusion, building out a partner ecosystem can be a powerful differentiator for the company, the market evaluation and as an enabler to your clients’ success. If the necessary time is taken to evaluate all aspects of a potential relationship, and then manage the relationship with these industry best practices, your company will be on its way to a successful, vibrant ecosystem that positively impacts top and bottom lines.

Join me at HostingCon July 24-27 to explore partnerships in even more depth.

Source: TheWHIR

So how do MSPs, CSPs and other service providers decide which vendors to choose, and what is the right mix? If partnerships are rushed into without careful consideration, providers may experience relationships that do not produce an ROI or do not generate new business. TCC research shows that 50-60% of vendor partnerships do not get off the ground after contract signing.

One of the most significant opportunities is getting the business strategy and vendor mix right.

Often times, a strategy session is needed to map out the solutions offered and the verticals in which success is experienced to uncover where the opportunities for growth. Helping clients make the transition from on premise to cloud continues to be an incredible opportunity; assisting customers in determining what they need to do for sustained success in the cloud is more and more important.

Specialized new cloud-based services are emerging every day. Sometimes these specialized vendor players can make a huge impact on our ecosystem; or it’s an industry with a new cloud offering that can best assist us.

Building and prioritizing key growth areas for new services is essential. Take for example, some of the more interesting services highlighted in a recent post in MSP Mentor.

7 Managed Services Offering Trends to watch in 2016:

Remote monitoring for BYOD policies and protection
Enterprise Mobility Management for mobile devices
Internet of Things for everything connected
Identity and access management for two-factor authentication
Cloud backup services for data protection
Compliance as a service for meeting regulatory compliances
Remote monitoring and management

Building a rich and trusted ecosystem with the right mix of partners is essential:

Hardware and Software Vendors
Service Provider Vendors
Contracting Services Companies
Two Tier Distributors
Other Managed and Cloud Business Service Companies

Combining the right relationships from the right types of partners enable our customer base, differentiate us from our competition and enable our top line growth.

In addition to technology, product and solutions, here are some other considerations.

It’s important to evaluate the entire “partnering experience” with the vendor.
What is the commitment the vendor has to the channel?
Would this new vendor put us in the position to have to balance a potentially competitive relationship?
Will we need to consider competitive aspects, either with another partner or vendor in our ecosystem, or with a vendor’s direct sales organization?
When these competitive situations arise, how will we manage ongoing successful sales engagements?

To fully consider our vendor mix, we need to have careful considerations in all facets of this relationship including:

Vendor Strategy
Vendor strategy ideally lines up with go to market strategy and existing services offerings. Do service providers choose go with many different, smaller best of breed partners, or one large significant player that can offer many different services? There are pros and cons with both strategies. Providers should evaluate the exact value proposition, the verticals served and what benefits can be expected from the different strategies, then make a choice.

Vendor’s Partner Experience
What is the partner experience like? Are they a partner-centric organization where all of their business is done with partners, or do they also have a direct sales organization? What percentage of their revenue is done with partners? Also look at partner program features: cloud programs, like deal registrations, conflict management policies, partner account managers, support and executive sponsorship. Can we gauge the level of their partner commitment by looking at their website and other public-facing materials? Do they have a vibrant partner ecosystem themselves? If partners are not a priority for them, then it may be tough to get the partner experience needed to be successful.

Partner Program Service and Support Model
From what we know about the vendor’s program, what is the expectation for training and certifications and what is the method and quality of their training programs? Some of the smaller players might not be as mature as the bigger market leaders, but what is really important to the business?

If there is a clear and defined onboarding and ramping plan, can service and delivery teams get what they need out of it and for what investment? Ultimately, will we be able to profit from this program, or will we struggle to even come up to speed for the investment cost estimates?

Quality of Service and Support
When considering any vendor, providers must look at their overall quality of service and support. This is the time to really test the extent of their technical and sales support. Are the vendor teams quickly available on the phone, or does it take 10 minutes just to get someone live? How well is the vendor staff trained and ready to help? Explore and test-drive the tools they offer, the online capabilities, community supported knowledge base and any analytics they offer.

When we are live with a client solution, we need to be sure we have a partner at our side.

Compatibility
Consider compatibility with the other services offered. The tight integration between service offerings will directly affect the services delivered to clients. Do the vendors together offer interoperability certifications or programs; are there reference architectures of different service offerings on which to capitalize?

Marketing Support
As you continue to build out your brand, will the vendors aligned with support that goal? Within their program, does the vendor offer marketing support? If so, what type and extent are they willing to help? Will they provide content for marketing efforts? Are they going to help with lead generation, or even pass on leads? What kind of extended support or concierge services can be expected from them? The extent of the support given here will directly impact the entire vendor experience.

The last key area is ensuring the vendor also fits well into the business’ broad partner ecosystem around cloud services.

This brings us to another key area in the go to market model: building out the ecosystem. Not only will it stand to differentiate the provider in the marketplace, it also creates space for a significant trend in this industry, which is, partners, within the same ecosystem, partnering together.

Collaborations between MSP or cloud partners can strengthen offerings and increase competitive position. When new solution offerings are built, it may create opportunities for complementary partners and services to work together.

For example, I was recently at a conference and led a discussion about security. Two MSPS; an integrator focused on storage and networking explored the opportunity to partner with a highly oriented security and compliance as a service MSP in completely different geographies of the country. This example highlights how MSPs and solution providers working together can be a strong value proposition with the right negotiated terms and rules of engagement up front. .

Having collaboration, trust and unified goals to ensure alignment, along with a customer experience that is supportive, smooth and very successful, are key for these relationships’ success.

That is just one example. Service providers could have on premise solutions collaborating with cloud services, analytics services partnering with compliance services or hosting partnering with communications.

Whatever the mix, having a common set of goals, and building a track record of successful clients will strengthen the overall proposition and ultimately our ecosystem.

This post explored the overall vendor mix and compatibility strategies when building an ecosystem, what they might look like and some of the challenges in building our vendor/partner relationships. In part two of this series, we will look at the best practices in managing vendor/partner relationships and successful ecosystem communication strategies.

Join me at HostingCon July 24-27 to explore partnerships in even more depth.

Source: TheWHIR

So what do service providers care about? Inherently, they are concerned about building their brand and generating demand for it. They need access to subject matter expertise and industry research. They need various types of thought-provoking content. They also will need to develop skills they might not have in-house. And guess what? They will look to their vendors for help with all of the above. So here are some of the best practices of partner marketing programs for service providers:

Building their Brand Service providers are very concerned about building their brand. But a brand for them is less about a logo and more about the swagger and reputation they have in a highly vertical and specialized market and specific solution segments.

Technology service providers build their brand by providing subject matter expertise and compelling content and solutions for real business problems to their customers and prospects. The more value an service provider can bring to a specific market, that hones their customer value proposition and aligns the service provider with thought leadership, the better for the service provider’s business.

Content, Content, Content Service providers need help to produce the hard-hitting content they need to make an impact in their market and they will look to their vendors for help with this. Vendors need to dig into their arsenal of content and package it for a service provider to easily consume and customize for use.

Gone are the days when vendors could post collateral on a portal and expect partners to go find it and use it. Vendors need to do the heavy lifting; make it easy for the service provider to benefit from the content and help the service provider integrate value propositions to really differentiate that service provider in the market.

Everything a vendor produces is potential content for a service provider. For example:

Whitepapers Any thought leadership topic written by the vendor or even co-authored with the service provider is great for the service provider to co-brand and use in sales and marketing campaigns. Thought leadership topics can include: technology or industry trends to capitalize on or understand; vertical market opportunities, challenges and solutions; multi-vendor solutions to business challenges; business and market opportunities or status.

Blog Posts Service providers need this crisp, topical content to engage their audience. Having the vendor provide some of this for them to use, or to guest blog for the service provider drives engagement and adds credibility to the service provider.

Social Media As part of a larger campaign, to bolster a vendor’s (nonproduct specific) message, or to comment on a larger topic, packaged (or even syndicated) social media content is an excellent way to support the service provider.

Webinars Any topic of significant market interest would be good for a service provider to repurpose. Success stories and co-delivered webinars are a great way to integrate into an service provider’s larger marketing campaign.

Web Content Syndication of web content is usually the preferred method to provide web content to service providers, but a page template with content can also work.

Marketing Campaigns Successful 360°campaigns done by the vendor can work repackaged for the service provider with branding and solution flexibility embedded into them.

Lead Generation Service providers will require the vendor to help in this area. The preferred method would be for the vendor to find the lead, nurture the lead, and then turn over a warm, qualified prospect to the service provider. That’s not always possible, but nonetheless, the service provider will look to the vendor to provide some form of lead generation assistance. Skipping this step or not prioritizing this arena with service providers can often spell disaster for a partner/vendor relationship.

Creative demand generation programs that the service provider can deploy through a vendor are also a very good option to help service providers identify new opportunities. This lead generation responsibility is shared between partner and vendor – and the more vendors can do to support service providers here – the more likely an service provider is to be loyal to that vendor.

Empowerment and Education Services Service providers will not have the same depth of marketing and business expertise that vendors have. That is why empowerment and educational services offered by the vendor are highly valued by the service provider. Continuously improving the sales team’s performance in the service provider is a top priority according to several recent channel studies.

Providing the content or passing a lead is one thing, but if the service provider doesn’t know what to do with it, then all is lost. Providing sales training like a social media or cold call boot camp, demonstration skills workshop or deploying effective sales strategies can set a vendor apart and gain the trust of service providers as a true partner, not just a vendor.

Concierge Services Full-service marketing services are a win for service providers. Along the same lines of vendor-led lead generation, making marketing easy, and having a full-service marketing company to assist service providers, will make a vendor’s program all that more attractive. Having one or two marketing concierge services for service providers to use, and rolling that into a MDF program, makes it much more likely that service providers would develop plans and execute programs on their own – that have a high likelihood to produce a return.

Vendor programs play a big role in the marketing prowess of their service provider partners. It is important to have different initiatives within a vendor’s marketing offers so there are elements that every service provider would value. However, don’t be afraid to try something new or outside the box.

Allowing partner marketing programs to evolve over time with new pilot programs and ideas from the service providers and industry experts can lead to the best innovations that prove an ROI.

This article is brought to you by HostingCon, the Cloud and Service Provider Ecosystem event. Join us in New Orleans, Louisiana July 24-27, 2016 to hear Theresa and other thought leaders talk about issues and trends in the cloud, hosting and service provider ecosystem.

Save $100 off your HostingCon All Access Pass with coupon code: H1279

Source: TheWHIR

• Strategy around what markets my company wants to be in, globalization and who will carry my brand
• Differentiation and staying ahead of competition and/or market challenges like overcoming obsolescence
• Effectively retaining and engaging employees and people who currently or in the future could work with my company
• Alliances formed around my business or partners who will take my company’s solutions and services to market
• Verticals / Clients / partners I sell to – leads, sales, customer loyalty
• Product lines and offers, directions, services
• Financial, tax, and operational challenges – managing finances tactically and strategically
• Capital optimization – what’s needed for short and long term success
• IP and legal challenges
• Unique industry specific challenges
• Growth as a leader
• The Executive Brand I need to represent my business

Debbie Tyler, accomplished CEO, and Vistage Chair coaches business leaders and shared some of her perspective and guidelines for assembling a first class team of advisor partners.

Guideline #1: SKILLS & EXPERIENCE – Ensure your team of advisors cover relevant and diverse skills and experience encompassing financial, technical, people and operations, the business outlook, and relationships with your customer and prospects.

Guideline #2: TALENT – One of the top issues of executives today centers around talent. How does an organization affordably find the right talent, hire the right employees, challenge them, keep and protect them? Having a set of advisors with experience in successful corporate culture, human capital, incentive approaches and employee engagement, could help look at this subject from a number of viewpoints. Experienced advisors give valuable insights; likely resulting in different solutions that could positively impact your situation.

Guideline #3: MIX – Consider the mix of advisors: having expertise from diverse backgrounds, diverse age groups, and diverse types of experience is important. Statistics support this. In a recent blog http://www.theresacaragol.com/blog/, we uncovered that profitability, innovation, and diversity are directly correlated according to extensive global 2016 research.

Evaluate potential advisors outside of your network and don’t always rely on your most trusted relationships. It’s potentially dangerous to select advisors solely based on proximity or comfort, especially relationships of folks who are vested in you. It’s important that advisors are people who will give unfiltered, sometimes provocative, innovative or even controversial insights. It’s often in this type of feedback that golden nuggets for success exist.

Guideline #4: COMPENSATION – Consider the compensation you give your advisors. Is it an informal mentor or sponsor relationship that has no compensation? Is it a relationship that carries an equity or dividend stake in the business associated with company growth? Is it a standard advisory board that has a set stipend compensation? Your approach is dependent upon the stage of the company, the purpose of the advisors, and the sophistication and experience of the executive seeking the advice, among other factors. Most importantly, take care to properly set up and formalize the relationship with the advisor. Be clear with all advisors about expectations, time and resource commitments, compensation model, and the timeline of the advisory role.

Guideline #5: EMOTIONAL INTELLIGENCE – Test your own emotional intelligence; ensure you have a high degree of self-actualization and are brave enough to receive the input, as well as see and work on your own blind spots. Are you truly open to hearing and receiving feedback and taking action on it? High performing executives can handle confrontation and challenges from those around them

Debbie Tyler asserts the right group of advisor should challenge you via healthy debate. Top executives are assertive and confident but comfortable and frequently energized when challenged by their advisors. If you don’t receive questions you haven’t thought of already, you likely are missing out on opportunity – money, footprint, or some area for growth.

Last, Debbie Tyler offers another key tip for assembling your board. Consider an empty room and think about where it is you need to take your organization for success. Then list out the types of skills, experience, personalities, and connections required at the table to help you scale your mountain. Then and only then do you place a name; unless of course it’s a no brainer like Warren Buffet!

How many advisors and what types of boards an individual should participate in is dependent upon the complexity of the role the person holds, the cross-functional nature of what his/her mission is, and the degree of change required for the organization’s success. In general, you may choose five to eight individuals with different backgrounds who can offer strong consult and perspective.

Other ways to obtain advisory services that can be extremely effective include: formal CEO and executive peer leadership groups like Vistage that offer advisory, peer networking, coaching, and global network access all in one. Another option is to hire an individual executive coach. According to a recent Fast Company article, 60 percent of growth stage CEOs use executive coaches, and 32 percent of seed-stage CEOs use a coach.

There are numerous ways to get trusted and confidential perspective, to learn from other seasoned and fellow executives and to continuously invigorate and challenge your thinking as an executive. Be deliberate about the advisors, be dedicated to listening and gaining consult, and be diverse in the group you assemble.

These factors will be a key tenet of you and your organization’s success.

This article is brought to you by HostingCon, the Cloud and Service Provider Ecosystem event. Join us in New Orleans, Louisiana July 24-27, 2016 to hear Theresa and other thought leaders talk about issues and trends in the cloud, hosting and service provider ecosystem.

Save $100 off your HostingCon All Access Pass with coupon code: H1279

Source: TheWHIR

“We don’t enter into partnerships lightly,” said Rich Dolan, SVP of Marketing at Datapipe. “We make sure our partners are like-minded and innovative, and will assist us in providing clients with the strongest custom solutions, managed services, security, and reliability.”

Datapipe is also a highly valued, strategic partner of Equinix’s and was one of the first companies to join its global channel partner program in 2015. “By collaborating with them over the years, we have been able to work with enterprise companies worldwide to remove many of the common barriers to cloud adoption. Together Datapipe and Equinix help enterprises to deliver and maintain scalable and dynamic cloud solutions, including infrastructure as a service and platform as a service within highly secured and reliable data centers to fit every need. said Chris Rajiah, Vice President of Worldwide Channels and alliances at Equinix.

The two companies have come together, enabling domestic and global enterprise and government customers to scale both traditional and cloud solutions across the Americas, Asia Pacific and Europe through their partnership. Together they have also adopted a number of strategic alliance best practices that are now built into both companies’ DNA:

Executive alignment: The alliance fosters a close relationship between the two company’s executive teams. This relationship enables quick buy-in from the top for new strategies, clients, implementations, and partnerships and helps ensure the alliance’s success.

Alignment on new market opportunities: Datapipe and Equinix recognized early on the shift from traditional to hybrid cloud happening within their client base. The established alliance with Equinix enabled Datapipe to offer clients a hybrid cloud; which continues today to be one of the most significant growth opportunities in the world for service providers to offer to enterprise IT.

Practical growth based on real customer opportunities and honing a vertical market approach: Datapipe builds out new offerings and new geographies based on demand. The alliance with Equinix gives Datapipe the ability to quickly respond to and scale customer requests. They can turn on new services and rapidly enable customers to expand into new geographies.

The company also has a vertical approach, recently making an acquisition to accelerate its success in the US federal market. This successful acquisition has enabled both Datapipe and Equinix to expand their presence into the military and civilian government markets.

Joint marketing, cobranding and demand generation: Datapipe and Equinix co-sponsor marketing and industry events, and mutually invest proactively in co-marketing and lead generation. They conduct joint thought leadership and marketing events in cities around the country, produce collateral and data sheets about the companies offers’, and publish joint success stories. Both believe the real client success stories in a wide range of verticals and applications/solutions are critical to help other customers understand the value. Also, Charlie Colletti, Datapipe Channel Marketing Manager, shared that he conducts a regular cadence of calls with the marketing team at Equinix to drive innovative initiatives and execute programs that are key to both companies’ success.

A culture of partnering embedded into the DNA: Datapipe has a culture that rewards successful partnerships across sales, marketing, and executive management. The two companies have very different cultures, and work closely together to drive and maintain alignment at the executive, sales, and marketing level to keep the partnership on track. In addition, both Equinix and Datapipe channel partners can leverage the alliance and the solutions for their customers. There are clear goals and teams aligned from both companies to make those goals happen.

Continuing education on the alliance: Datapipe and Equinix conduct field boot camps, ongoing webinars and education for both companies’ sales teams and the channel partners. The teams believe in continuing to reinforce key partnership messages and success stories for sales teams and partners to replicate.

Business processes that serve as foundation for the alliance: Datapipe and Equinix measure the success from all leads for both companies through their lead flow process in Salesforce. Both companies mutually track and report on a comprehensive set of leads through the lead-to-close process, using provisions that tie those leads back to the respective partners they belong to. This serves three purposes: it gives an accurate metric for progress, ensures Datapipe and Equinix are aligned, and provides partners opportunities and drives their accountability in the process.

The Datapipe and Equinix partnership truly represents an example of a relationship that has progressed from first a customer relationship, then a channel partner, and now a true strategic channel alliance leveraged by both companies’ channel partners in the marketplace.

This article is brought to you by HostingCon, the Cloud and Service Provider Ecosystem event. Join us in New Orleans, Louisiana July 24-27, 2016 to hear Theresa and other thought leaders talk about issues and trends in the cloud, hosting and service provider ecosystem.Save $100 off your HostingCon All Access Pass with coupon code: H1279

Source: TheWHIR

In a recent article for HostingCon, Dave Gilbert, former CEO of SimpleSignal, talked about the lack of trust in IT organizations as a barrier to growth. “I believe the difference between companies that execute well and those that don’t make it is the leadership’s ability to build trust over time,” said Gilbert. “Companies with a high trust culture experience a far lower churn rate and much higher employee engagement with the enterprise.”

Systemic trust is the ability of individuals in one or more organizations to trust another organization, for example a group of different types of channel partners, alliances, and a developer community to trust and want to grow with a vendor. It is the degree to which individuals and groups in an organization have the confidence to sustain a partnership with the organization and the personnel in the organization.a

Both forms, individual and systemic trust, are fundamental for the success of long term partnerships. Systemic trust is critical when multiple individuals in a company are partnered with another company’s teams – and everyone is unable to know and trust every other individual in the organization. The individuals then must rely on their sense of systemic trust.

At HostingCon in July we will share successful partnership use cases to determine the key factors underpinning them. Trust is a basic need just like water to every human partnership. It is one of the top 10 challenges explicitly stated in the HostingCon State of the Cloud and Service Provider Ecosystem survey; and a sub topic in three others: building effective communication among vendors and partners, balancing channel conflict with both direct and indirect and competitive partners and aligning partnership goals.

So, how do we build individual trust in our channel partnerships and ecosystems?

Trust building is focused on both the present and future cooperation of two people. In order to create trust, people must believe you are trustworthy. This can be a short or long process. However, it can be destroyed in a minute often if earning trust is viewed as a means to an end versus a long term relationship.

Building trust must be perceived as authentic or people will not believe you are trustworthy and want to engage with you. Express yourself authentically, speak carefully, accurately, clearly, and honestly to gain and sustain a full and accurate common understanding.

Trust relies on engagement with individuals and continued reciprocal relations (or relationship building) to earning long term trust. To create trust:

• Don’t promise more than you can deliver.
• Describe your doubts, risks, and events beyond your control.
• Don’t over commit.

Trust and values are linked; it’s important to understand others’ values and align those in a partnership when possible.

Trust breaks down when:

• People perceive authority versus a relationship
• There are continuous conflicts with individuals
• Continued uncertainty in a partnership
• An inability of a person to communicate or manage risk

Specific tips on creating trust in business partnerships:

• Work transparently, keeping others up-to-date on progress and problems
• Allow others to observe the progress of your work
• Involve others from the partner in key decisions
• Expose hidden agendas and personal interests of both sides when needed
• Understand what is being proposed, described, and discussed
• Be clear on the expectations of others, problems you might encounter, the risks involved, changes that may occur, what you are agreeing to, others you may need to rely on, and your preparation and ability to meet commitments
• Establish and maintain clear expectations.
• Make and keep promises, do what you say and deliver results.
• Hold yourself and others you depend on accountable
• Go beyond what you promised when you can
• Proceed in stages, and commit only as much as you can foresee

Systemic trust is also critical for sustained partnerships and for a vendor to maintain a robust, strong and growth oriented partner ecosystem. In addition, systemic trust is a fundamental ingredient for innovation.

One of the biggest ways organizations drive innovation and differentiation with their partnerships and channels is through collaboration. Collaboration is also based on trust. To drive collaborative partnerships, the product, services or solution vendor must value partnering and building high levels of trust with partners at the senior levels of the organization.

Rigorous standards for maintaining that trust must be built into the company culture, the processes, communications, and the technology.

Examples include:

• Company culture: Senior executives and the CEO of a company articulate the importance of partnering internally to the employees, to the partner channel, and to customers on a regular basis through customer briefings, investor calls, and industry analyst conversations.
• The company lives by a model that rewards partnerships who bring value to the company.
• Company process: An example of a strong company rule and process would be that no employee from a partner is hired unless the partner has been communicated with by a VP in the company; or the delivery to a joint customer base of a blended partner/vendor value proposition.
• Technology enabler: An example of a technology enabling collaboration tool for developer partnerships is SLACK, this tool is enabling incredible collaboration across individuals and companies; and the ability to track history and learn from the collaboration initiative over a period of time.
• Corporate governance: Corporate governance with partnerships and channel is another measure to foster systemic trust and collaboration. Examples include Global Advisory Councils, Partner level attainment and reward, and Annual Business planning and quarterly business reviews.

In a relationship, people have “free will” and use it to choose whether they will give trust to another person. However, in some cases it’s important for both the vendor and the partner executive sponsor to dictate the goals and expectations for the systemic trust in the partnership. This will then pave the way for individual trust to expand within the two organizations.

Last, one of the most critical relationships for a sustained successful partnership is the executive to executive sponsorship for the relationship.

What does this mean?

• Sponsors talk straight and honestly with one another, and confront the reality of the partnership or the situation as needed.
• They clarify expectations on a sustained and regular basis, review progress, and enforce achievement of the teams’ mutual key objectives.
• They create transparency by listening first, showing loyalty, and fixing something that went wrong.
• They keep commitments and ensure both teams deliver results.
• They take the time to continue deepening that individual executive relationship.

Trust is at the core of our own personal success with partnerships. It’s at the core of individual vendor and partner sales and technical teams’ revenue growth. It’s at the core of executive’s partnering results.

Trust is at the core of virtually every aspect of our vendor and partner success.

This article is brought to you by HostingCon, the Cloud and Service Provider Ecosystem event. Join us in New Orleans, Louisiana July 24-27, 2016 to hear Theresa and other thought leaders talk about issues and trends in the cloud, hosting and service provider ecosystem.

Source: TheWHIR