In my 25 years of consulting on corporate customer feedback programs, I have seen channel partners become increasingly beneficial to the value of the programs, particularly in technology business categories. I use the term "partner" to broadly include companies that are reselling, adding value to or wrapping solutions around a manufacturer’s products. As the means to profitably reach more customers (end users) with ample products and business solution needs, vendors should listen to their partners’ voices, as well as help provide partners with vital customer feedback.
It turns out vendors have good reason for wanting their partners to understand customer needs and feedback. The 2005 Walker Loyalty Report for Software and Hardware revealed that channel partners are behind the vendors in earning customer loyalty—44 percent for partners versus 52 percent for software and hardware manufacturers. This shows the power behind the strong brands of the vendors but also the upside potential for partners to strengthen relationships with end users.
Many larger vendors can underwrite customer research more easily than the majority of their partners. Some companies now support online platforms for partners that enable end users to provide feedback about their experiences on any topic from pre-sale through post-sales support. These results are housed by the vendor and made available to partners as well as internally to channel and product managers.
Cisco and Microsoft
The main purpose of Cisco Partner Access online (PAL), in place since 2001, is to conduct end-user surveys—issued by Cisco and the partners—to assess customer experience and loyalty with the partners. Cisco System’s Don McNally, director of Worldwide Channels Business Operations, said in the October 2003 issue of Creating Loyalty, "What makes PAL successful is its ability to benefit both partners and Cisco at the same time."
A corrective action process is used by partners to diagnose and close the loop with customers and Cisco on improvements. Cisco has publicized achieving a 40 percent improvement in partner-served end-user satisfaction since beginning the program, reported by TMCNet News in June 2005. The secret is in learning real customer experiences and how they shape the customer’s loyalty to the vendor, partner and products.
Microsoft is another leading vendor publicizing its online customer feedback program for vendors, which it calls the Customer Satisfaction Index. This program is positioned as a benefit offered to Gold Certified Microsoft partners at no extra charge. Partners are not required to participate but are encouraged to do so with loyalty rewards based on the number of participating end users and the satisfaction scores they receive.
Offering loyalty rewards is a growing trend in IT. Loyalty programs reward partners for selling more, taking on new lines and keeping up with product knowledge. In many cases, these points-based incentive programs allow partners to redeem points for special travel vouchers or catalog merchandise such as mobile phones, digital cameras, iPods, LCD TVs or plasma screens. I have mixed feelings about the ability of such programs to differentiate long term (think frequent flier programs), but many vendors must offer rewards to just keep up with competitors. That being the case, companies should learn what partners want or expect in loyalty programs—and what will make the program better over time for them. Of course, it suggests tracking the loyalty of partners, as well, a practice many large vendors have invested in.
Loyalty from partners has a limit. Resellers and solution-providers catering to diverse customer bases must carry extensive product lines—otherwise, they would be manufacturer’s reps. Yet, partners look to vendors for tools, advice and support, in such forms as product information, supportive distribution, credit policies. The different roles of vendor and partner can be confusing to end users needing support. Understanding partner and end-user experience can guide vendors on improving those business relationships.
True loyalty from partners means much more than their response to the vendor rewards program. In fact, true loyalty contains three primary elements:
- Continuous handling of the vendor’s products
- A positive business experience over all with the vendor
- Product uniqueness
Many partners are more "trapped" than truly loyal, meaning they continue carrying the products but either haven’t been happy with the experience or aren’t impressed by the brand. Vendors expecting loyalty should track what partners really think about them.
While dutiful dogs sometimes have ungrateful owners, loyalty between business people always seems to cut both ways. Partners care a great deal about the manufacturer’s innovative capacity and road map. They watch their vendors’ actions in the channel— from selling directly to selling to their chief competitors—and the caliber of advertising and communications. And they care about vendor business practices, such as when inventory is pushed to meet goals during slow times. Being a good partner means never taking advantage. Hopefully, the realities of partnering with a larger vendor don’t bring to mind the old Woody Allen line, "The lion may lie down with the lamb, but the lamb wouldn’t get any sleep."
Manufacturers should balance offering loyalty incentives with investing in more innovation and product quality. Product commoditization or quality problems can lock vendors into offering ever-more aggressive loyalty rewards programs. In addition to knowing their loyalty, the "killer insight" to seek from partners may always be, "What can we do to help you sell our products deeper and wider among your customers?" Some of the more successful manufacturers, including Cisco and Microsoft, are successfully gaining such insights from partners and end users.