Software Executive Magazine

February/March 2018

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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entirely different customer leads, but operationally speaking, there is quite a bit of overlap. Finding the right in- centives and maintaining a high level of engagement matters for partners just as it does for your internal sales team. Langlois knows it's not enough to "provide a value add" or to "give a rate X percent better." As software be- comes more and more commoditized, partners will become more and more likely to sell someone else's product, and end users will be more and more likely to ask about alternatives. If you want your software to be a core part of every discussion a partner has with a potential customer, then you need to incentivize them to do just that. If you want a referral partner to send better quality leads, structure compensation around exactly that. Langlois says, "Incentive programs can't be the same thing every month. There's always deal fatigue. If you're giving someone a trip and you offer it for two months, it becomes stale. Ask yourself, 'How can we motivate partners during a hard part of the month?' It's the same sort of conver- sation you have about incentivizing your direct sales team." Vend's take-home message about incentivizing partners is to struc- ture the program so it encourages them to finalize multiple deals in a given time frame. The value of the incentive increases as the number of deals a partner brings to Vend in- creases. This is based on Langlois' firm belief in the quality of partners over the quantity. He'd rather have 100 partners doing multiple deals each month than 200 partners doing just one. That model is much easier to support and scale. In that model, eventually those 100 partners will start gaining momentum and getting increased sup- port from Vend, which will lead to three deals each month, then four, then five, etc. – all while the hypo- thetical 200 partners would continue closing just one because of a lack of focus on the relationship. "We realize our cost of acquisition in a partner chan- nel is not as high as it is doing inbound or outbound," says Langlois. "We can use incentives to really get them panies have the same attention to detail Vend applies to evaluating the quality of its partners. Vend puts all partner leads through the same sales discipline that exists across the in- bound and outbound sales teams, and then it compensates partners ac- cordingly based on that quality. Since all sales reps are held accountable for a certain conversion rate, it's easy to identify if a partner is sending bad leads. For example, if sales rep A typ- ically closes X percent of warm leads, and that rep is closing X percent less of the leads sent by partner A, then it's clear the leads from partner A aren't a high enough quality to scale that relationship. On the other hand, if partner B's leads are going to rep B – who isn't a historically strong closer – and rep B is closing about the same percent as usual, then the problem is identified at the rep level instead of pointing fingers at the partner. Holding partners accountable for lead quality in the same way inside reps are held accountable for conver- sion rates isn't just meant to keep the peace between Vend's three different teams. While some software com- panies worry about the perceived conflict of interest in selling through a distribution channel and selling direct, Langlois sees that as a nonis- sue. "There is never a situation where the three inbound, outbound, and partnership teams are talking to the same customer. It just doesn't hap- pen. There's just so much opportu- nity in the market that investing in a partner channel like this makes a ton of sense. We could have 100 people in the office dialing to get in front of customers, and we would still never get to every opportunity." P AR TNER PR OGRAM INCENTIVE S Even though partners have a significantly lighter impact on the payroll, that doesn't mean partners should be treat- ed as second-class citizens compared to internal sales reps. Vend's inbound, outbound, and partner teams work V E N D YEAR FOUNDED: 2010 GROWTH RATE: 1,000% in first 3 years GLOBAL FOOTPRINT: Customers in 150+ countries CUSTOMERS: 20,000 stores globally 5,000 in North America EMPLOYEES: 200+ 50+ in North America MAJOR OFFICE LOCATIONS: Toronto London Melbourne HEADQUARTERS: Auckland, New Zealand VERTICAL MARKET: Inventory-based retailers with 1 to 20 stores TOTAL FUNDING: $45 Million NOTABLE INVESTORS: Peter Thiel (Valar Ventures) Christoph Janz (Point Nine Capital) 17 SOFTWAREEXECUTIVEMAG.COM FEBRUARY/MARCH 2018

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