Looking for an implementation partner? Don't ask your vendor.

Of the following five “facts”, which one is ‘fake news’?

Fact #1: The market for marketing and digital experience technology is hot.
Fact #2: Experience technology depends as much on people and process as on its own functional capabilities.
Fact #3: Nearly every marketing technology vendor on the planet talks about customer experience, and how it’s a top priority.
Fact #4: Experience technology is complex; most organizations that buy it rely heavily on a digital agency or systems integrator (or both) to bring it to life and realize its value.
Fact #5: Technology vendors take care to recommend implementation partners with the highest likelihood of success to their customers.

If you picked Fact #5, you win! Or you lose. Depending on whether you were one of the enterprise buyers that bet millions of dollars on this assumption. If you made the crazy supposition that your highest priority in selecting a digital implementation partner — installing the software successfully and realizing the goals of your purchase — actually aligns with the top priority of your technology vendor, you would be WRONG.

In fact, when enterprise buyers choose their digital agency based on the recommendations of their software vendors, those buyers have the least success. In other words, they are most likely to fail. Put another way, organizations are more likely to succeed if they select their partner based on the lowest-priced bid than based on the vendor’s recommendation. Heck, they are more likely to succeed with the partner with the closest office than with the one that shows up with the software salesperson. Sad, but true.

[W]hen enterprise buyers choose their digital partners based on the recommendations of their software vendors, those buyers have the least success.

All of this is according to our database of feedback from thousands of enterprise buyers who we asked to choose from among 11 different options as to why they selected their solutions partner. And when customers said they chose their partner because their “vendor recommended them”, those customers:

  • Had the lowest-rated engagements, on average, among all 11 options
  • Gave their technology vendors the worst NPS scores of all 11 options
  • Were the second-harshest NPS detractors of their digital partners among all 11 options

But why would technology vendors recommend partners that seem to be so poorly aligned with their customers’ interests? Why are they so awful at helping their customers succeed, especially when high customer failure leads to low customer retention? Why wouldn’t they be more interested in ensuring partner-led customer engagements stay on track? All wonderful questions indeed…

No, vendors are not trying to make bad recommendations. But the sad reality is that most vendors just don't know the capabilities of their partners, and they are far more concerned with missing out on future partner-sourced deals than ensuring the success of current customers. Technology vendors see a false dichotomy between maximizing customer success and maximizing partner-led revenue. Vendors know that many (>40%) of their partner implementations fail in the eyes of their customers. They hear rumors that some partners’ implementations are always having to be cleaned up. They don't intentionally make bad recommendations to customers, but most don't do anything to ensure they are making even better-than-awful recommendations. But could they? Sure, here are a few ideas:

  • They could screen partners better when qualifying them for their channels.
  • They could check in with customers during their implementations to ensure they’re running smoothly.
  • They could mandate that their services teams hand-hold new partners through their first few engagements.
  • They could survey customers regularly to find out what they have to say about the partners they work with.
  • They could provide more training, especially in a way that isn’t cost-prohibitive to partners
  • They could factor customer success into their channel tiering programs, rather than focusing almost exclusively on revenue and deals.
  • They could provide financial incentives (and disincentives) to partners based on customer success.
  • They could remove partners from their channel if too many customers complained of bad experiences.
  • They could expose the customer success information associated with the partners to their salespeople to allow them to factor this into their future partner recommendations.

Any or all of these would improve the situation significantly. But most vendors believe these steps create friction for the partners. And friction means that partners will be less likely to recommend new customers to the vendor in the future if, for example, they know they’re being judged. Sound twisted? It's the sad truth. Every single vendor that doesn’t implement steps to ensure that its partner channel is optimized based on outcomes knows that it is sacrificing the success of its customers. And as long as revenues aren’t threatened, this is a trade-off most are willing to accept. Ask any vendor’s head of partnerships whether channel sales or customer success is the higher priority, and you’ll have your answer. These two notions should not be mutually exclusive, but many treat them as such.

Our point in all this? We have three, actually:

  1. Enterprise customers need to be more informed. Do your own diligence when selecting a partner. Most digital partners are good at what they do, but the question is really whether they are the right fit for your organization and your needs. Don’t assume your vendor’s salesperson had these in mind (or even knew them) when bringing a partner to the table. And considering that your spend on your partner will be 2-6x your spend on the technology, the stakes are high.
  2. ALL vendors need to start to take this seriously. It’s beyond time. Most feel like they’re between a rock and a hard place on this subject, but if all would agree to take the challenge of finding the best-fit partner for each customer (which would require them to track partner-led projects in order to know what each does well), then none would be harmed because customer success would become a universally-accepted metric used by all. It's time for them to put their customer experience talk into action for *their* customers.
  3. Partners don't deserve all the blame. Not only are partners never solely responsible for failures (much is borne by the customer as well), they also want the right customer fit. Bad projects cost money. But when vendors bring a deal to them, they don't want to turn them down for fear that the next one won't come so readily. Everyone is in an awkward position. And most partners don't mind being judged based on outcomes...just not by a vendor that uses that information to compete with them for services. Ouch. [BTW, some notable vendors' services organizations get far worse satisfaction scores than their partners, but we'll save that for another post.]

 

Have any thoughts or questions? We'd love to hear them in the comments below. And if you are interested in learning more about our VOCalis voice of customer program, please contact us. We work with buyers, partners, and technology vendors to help them all improve outcomes.

 

 

Comments

Hello Scott, I agree to your views and insights. It is important for any Enterprise to do their due diligent research before embarking on a relationship with a new solutions partner. It helps when customer referrals are provided and also when an ‘outcome driven’ engagement model is pitched. That way, the Enterprise would benefit and the solutions partner take their consulting and pitch seriously.
Hi Gayathri, thanks for your comment. I agree with you. But the reason we wrote this piece is because for most customers, the vendor's recommendation carries more weight. If a brand goes through a selection process, they will often seek references and do more diligence. However, we have found that this isn't always the case when the partner is referred by the vendor. Either the vendor shows up to do the in-person pitch with a partner and the two are proposed and accepted as a sort of 'package deal' (although not always literally), or the vendor refers the customer to the partner and this recommendation carries more weight than normal because there's an assumption by the customer that the partner is pre-qualified. However, in reality, these partner referrals are not always what they're assumed to be. I know many vendor sales folks who have long-established relationships with partners and they use them as their go-to partners. Sometimes, this distinction is warranted and the partner is highly qualified. Other times, the salesperson just has a great personal relationship with someone at the agency, but the agency's delivery capabilities fall short. Or, the agency is solid in its product fluency, but the salesperson just doesn't know all the non-technical competencies required by the customer or claimed by partner -- maybe they just don't have the industry expertise, etc. In a completely different scenario, the vendor salesperson may be new to the organization and just finds a nearby partner, or the organization recently partnered with a new agency and they want to solidify the new relationship with a first deal. Or, maybe the partner just referred a client to the vendor salesperson and it's their turn to return the favor. All of these scenarios and many others play out daily. We don't mean to unmask some sort of "conspiracy theory" here. We just want to ensure that customers do NOT over-weight those recommendations or assume any sort of pre-qualification. It's just that the interests of the recommending salesperson from the technology vendor and the interests of the customer aren't always fully aligned. Also, it is often the case that the near-term interests of salesperson aren't perfectly aligned with the longer-term interests of their employer. The partner they refer as a 'payback' may have helped them meet their personal quota, but that customer may not be willing to buy more product or renew their license if they're unhappy with the partner's work. Heck, many vendors *know* this happens all the time, and they don't love it but their own short-term financial interests aren't aligned with the customers'. In any case, as always, buyer-beware. Do your diligence. One other factor to mention here: maybe the recommended partners are great, but they're more harshly rated in our surveys because the customers' expectations are higher given their "pre-qualification" or perceived stamp of approval by the vendor. This is possibly another contributing factor. Both higher expectations as well as lower performance can be true simultaneously. In any case, the data is the data...recommended partners score lowest on average. As for outcome-driven models, or performance-based models, we have seen those succeed for customers and we've seen them overcomplicate matters and restrict / limit the natural course of projects. Also, the goals of the project have to be well-established such that outcomes or 'performance' can be measured and be an appropriate proxy for value. I had a conversation not so long ago with Arke, and they've talked about an interesting model with this that they're testing on a few accounts. Maybe I'll ask Eric to weigh in. ;-)

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