Building Successful Partnerships: Martin Scholz on Alignment, Leadership, and Growth

Martin, it is good to see you again. You are another one of the people that I was fortunate and I've been fortunate enough to meet through Pavilion. When did you join Pavilion? - It's been a while. I actually joined when it was still called Revenue Collective. I think it's two, three, three, four years. - Time is running. - It's been a while. It was about the time when you still need it to be invited. So yeah, but the same as you, you know, didn't really enjoy it. And I think it was probably one of the better decisions I took. - It's been a while. Around the same time, but it was Revenue Collective at that point before it had shifted to Pavilion. And it's pretty cool, the number of people that you meet with, and have diverse backgrounds. How are there other communities that you're a part of beyond the Revenue Collective or Pavilion? - I think not at that scale. I've been engaged in some local communities here. We, you know, in my field of area or area of expertise, we are running partnership meetups because there haven't been a lot for partnership folks. Certainly not in Europe. I mean, there are other groups like partnership leaders, but they are more targeting the leaders. And we thought, like, you know, let's bring the operation people together. And we started that about 15 months ago as an idea. And just the other week, just last Thursday, we had another one. By now they are sold within days after we announced them. You know, tickets gone, seats are taken. And we have a group of new faces and all faces. That's always very, very nice. - What have you learned in that process of kind of building that community, that network? - Sorry to say again. - What have you learned in the process of building the community, that network? - Well, there's one thing which is really crucial start, right, and you can make a lot of plans. And sometimes it's just like you say, jump into the cold water and see if you can swim. We learned that if my take is if you, you know, you need to decide what you want to build this community and here in this part, there is a partnership community is really the heart of the idea like we do it from the community for the community. So we are fortunate enough that people from the community help us to host the events. So we, you know, at the end of the last meetup, I had like three people coming to me saying, "Hey Martin, if you need a place for the next one, I'm happy to host." And that's what we say. Like, you know, we need a room for 30 people. Typically these are, you know, start-up internal companies that have fridges full of cold drinks. So that's usually safe. And if you're lucky, we get some pizza. But it's more about bringing the people together. And we also try to keep it lightweight. So we do have like a 15 minute knowledge sharing, but you know, it's not a sad experience. Somebody's speaking about their own experiences, their wins and their failures. And then we have an open Q&A and then we just open the floor and people talk to each other. And this is what ultimately should happen that people connect to each other and we had the person joining just moved from Brazil to Berlin looking for a job. And somebody says, "Oh, you speak Portuguese." And you know, technology and you have partnerships. Well, you know, use my address, please apply, right? And if this happens, that's wonderful. - Yeah, it's really powerful when you can bring together a group of people who have with some similar interests, like partnerships as an example. And then you start to realize they actually have other related interests with each other. And they start to, that connection builds a bit further. And through that connection, we can get to the point where we find solutions, potential solutions to challenges that we have. Maybe in that instance, the person who is looking for someone is in the process of opening up a base of operations in Portugal or in Brazil, wherever. But that becomes, it's when you put yourself out there and when you create those places for that to happen, good things can happen. How did you go through, what was the process that you went through when you were looking to see who else is interested in partnerships? And we'll get into the depths and the details of partnerships with your background here. But when you went through that process and you said, look, there really isn't a lot, aren't a lot of folks who are coming together in groups and community in Europe focused on partnerships. What did that search process look like? What made you think that there aren't as many out there? What did that process look like? - That's a very good question. I think when we started, it was fun and experience. We thought, okay, how should we do exactly? And who else is out there? Who's in our universe? Who's our ecosystem, right? And living in Berlin in Germany, which has a very vibrant start-up scene and ecosystem, you have little returns and tons of meetups. And a lot of them are, we felt like you find a little bit of a meetup for everything. A lot of them are very low level for sometimes, if you feel like these are all the experts coming to Berlin and trying to find friends and not really a business meetup. And we found, for revenue for sales, for SDRs, for marketing, for deaf, or for deaf ops, for deafs, for product, for partnerships. And when you look at these place, where you'll find all the other meetings, meetups, and you find like, okay, where's the one for partnerships? And this is one thing which is kind of a phenomenon and maybe based on the segment I'm in, partnership teams are way too often a team of one. So which is, actually, if you think about it, even more important that you have meetups, because if you don't have peers in your own company, you need to find peers outside your own company, where you could you find them both on a meetup. I think that was also, and then that's the other thing, right, when you start something, and you do your market research, you don't find anything you always wonder, is there something because nobody tried, or because several tried and failed, and there was just not a demand. And this was the same for the meetups, as then a little bit later for the PXP Academy, where we tried, well, there's nothing. Okay, we give it a shot. And both work out extremely well because people were looking for it. They, they, and some, who were looking for it, couldn't find something, some didn't even start looking because I thought there wouldn't be something like that. And now if you talk to people and say, oh, there's this meetup, oh, that's amazing. Can I join? You know, when it's the next one. And so that is the demand. And so to answer the question, we looked at the other meetups we saw, we didn't find anything, which is about partners and thought, okay, let's, let's start it. Let's try it. - Very cool. I like that you started all this part of the conversation really with just start. And when you just start, you can draw some really interesting people, or at least start to get some data to determine our people interested in this, in this thing. So let's talk about partnerships. How did you get into partnerships? - I guess like most of people we stumbled into it. And I know there was once this, I don't know where it was, but it was like, yeah. And then you wake up on morning and you realize you're on partnerships. And this is kind of where many people fall into that because there's kind of no form of education or something like that. Person for me, I think when I look back at what, I can say I did partnerships for probably 20 years, but the one which kind of was pivotal. My career was about 15 years when I moved into startup company. My role back in the days was business development, which was, you know, the back in the days, when it wasn't the tough job of trying people trying to do outbound to get in book, a book emitting for the AE, but really like develop new business. Like whether it's a new market, geographically, customer segment, well, basically just look what other assets the company has, which you could monetize outside the standardized product, which is sold by sales and promoted by marketing. And when I look back, this role was already 80, maybe 90% partnerships, without me knowing or calling it necessarily, I do partnerships, right? I was, I was, I was a business development at some stage, right? But I know the things I did was market entry into other, into France as a German company with a partnership. Then later to other markets with partners, then building an agency partner program globally. Then we am partnerships. So we partnered at that time with big companies like Ionus, with pick in Europe. It's the second largest host of Aftergo Daddy, which we then signed up as a strategic partner later. So it was like, I did it without actually having a playbook for it or a blueprint for it. It was really inspirational. You know, the CEO at that time, when we had the conversation, he said like, you know, he looked like somebody could help our company to grow. We need smart people like you. I don't have a really a position open. I have like this marketing role or this big role. I said, you know, marketing, I know, but others know it better because I'm not a specialist. I'm more like, you know, the journalist, he said like, I think BDS, what I should do. I don't have a job to discuss it. I like that. And over the years, I was six years in this company. We had a tremendous growth at that time. And that was very much proven by partnership. My next role then was already, you know, SVP partnershipships at UBAAL. Because there was a very clear go-to-market split, too. Okay, he used the market be addressed directly. And this is the market we go with partnerships. You know, that was kind of my journey along the way. And I guess what made us successful then was really to, I like this idea of partnerships. I always joke I could have learned more if I would just have said in sales, but it was to boring. And I like this, you know, every partnership is unique. You need to really understand the partner business and think about how can you build something which lasts. And this kind of, so long answer, stumbled into it, laughed it so much, couldn't get away from it. - What are some of the things is that people get wrong when thinking about partnerships. You're like, given your experience in what you've seen stumbling into it and kind of looking, you know, at more of this business development opportunity that's out there at first, which is, hey, let's go in and open up a new market or we've been successful in another area. Let's see what else we might be able to grow. So let's just back to that piece around, what is it that people typically get wrong when it comes to thinking about partnerships? - One thing which is pretty challenging for us, you know, as a community is that partnerships is little defined. We have, we're using terms or terminology, which is not necessarily defined. My favorite one is technology partnership. If you say technology partnership to four people, everybody knows and you have at least six different opinions on what it should be. This is one thing, you know what sometimes it reminds me, I don't know if you remember the movie Philadelphia when then the Washington always asked like, explain me like I would be three years old. And I tend to say, okay, I believe I know what you mean, but just to make sure that we really talk about the same thing, the other even bigger challenge I see is that, especially executive founders, revenue leaders, they have not a very good understanding of partnerships, which is not a problem at all, it just happens. And then they have this idea that here's something we should do partnerships for this other buddy on the founders' request, he was so successful as a channel or they read an article that pops up the striving 70% by partners and say, oh, let's do partnerships. And then let's partner with Salesforce. Now let's partner with Microsoft. And you know, in partnerships, it's not about who I want to partner with. Yes, this is critical, but more important is, why would they partner with me? And I always joke when I was 20 years old or 25 years old, I wanted to date Angela Julie, but she didn't want to date me, right? So if I as a company wants to start a partnership, it's not thinking so much about what do I expect for my company? Yes, of course, I need to have a very clear understanding and revenue is not a goal, it's a result. So I need to understand what I actually want to achieve and can achieve. But even more critical is like, what should I do? What can I do that the partner is interested in partnering with me? Because this is not a transactional relation. It's not like, you give me money, I give you my product or service. This is like, hey, let's work together towards a mutual goal. And this is what I see. I could simplify it like putting yourself in the other shoes and think about, you know, not who is my IPP, my idle partner profile, but more like, what can I do that I become the idle partner profile for the other company? That perspective is super important, right? Like this whole idea of, you know, and John F. Kennedy had it in one of his speeches. You know, ask not what your country can do for you, what can you do for your country. And you can do this in the context of both employees inside your organization partners that you have inside your organization, partners outside of your organization, customers that you work with, really kind of taking that lens and shifting around and saying, well, not what can I get out of them, but how can I serve them? How can I put myself in a position where I can be an ideal partner for them? The highlight on definitions is really important. I think if you're out there and you're thinking about partnerships inside your organization and you have very different definitions around what partnerships are and why they're important to your business and what you want to accomplish, you're going to set yourself up for failure because there will be confusion in these partner relationships. So how do you go through the process of getting better at defining what is a partnership? - Good question. Before I answer that, I would like to come back to one point you said because that's so good and to the point. You know, we learned for many years that we need to be customer centric so we think about customer experience. - Sure. - More recently, we started to think about, okay, what do we do for our employees? So, you know, there's this employee experience. - Yep. - But there's very two little companies who think about their partner experience. That's why we picked up that name, you know. What do I do to provide that great experience? Can I make to a question about how, you know, what does that define a partnership? It's, you know, of course, as a company, I should have a clear expectation of why would I start this partnership, right? What I believe it's in for me. And again, I said that earlier, this is another typical thing which always kind of makes me trenches. If I hear somebody say, "Yeah, I do partnerships and the goal is revenue." And then it's like, no, the result is revenue. But the goal, why you start this is to do something which is maybe because you want to get high quality leads for very, you know, reasonable elite costs. So you want to actually help your marketing to fill the pipeline, not only the smart marketing qualified leads, but this partner qualified leads, which turn to be always of high quality. What it does, high quality means they typically convert faster. They typically have a shorter set cycle, higher closing probability, and very often they have a higher MRR or the use size. And, you know, we can dive into that, why is it so et cetera, et cetera. But, or I want to, maybe I can build a reselling business. Maybe I find companies who actually help me to sell into, you know, customer groups, which I probably didn't find, reach myself. Or, you know, sometimes they can open verticals. I'm not able to sell indirectly. Sometimes they're just supporting my own team. They kind of expand my sales capacity, right. But then I have to have a very clear understanding of why would someone else put my product to the market? Why would someone else, you know, if my AE was paid for selling my solution, you know, but the partner, they have their typically on their own business, they're not my contracted AE's. So, how can I align my goal that they really put my solution to the market that it's totally natural to their own company goal? Yeah, to be, you know, more specific, you know, people always tend to look at sales force or hop spot because they have this huge partner business. Now, let me tell you a secret. The majority of these partners, especially with sales was our implementation partners. When sales started these partnerships, these implementation comes post sales. So, when sales force started these conversations many years ago, they went to a system integrator, says, "Hi, Mac, I just closed that deal. This customer needs somebody who can implement my solution and customize it. Would you like to take this business I want to give you and make money on it?" And you know, hardly anybody would say, "No, I don't want your business," right. So, ultimately, it was the start for this partnership relation was very often that sales force could bring system integrators, software IT companies or implementation companies, business. And if you look at the data, you can see that companies like sales force or Alubi, they have like one to five or one to seven ratios for one software. All of these guys go in between five, four, five, up to seven dollars in service money. So, that's why they like it so much. That's why they love to collaborate with sales force. And of course, if an end company comes to this implementation partner and says, "Hey, I want to implement a CRM, which one would you recommend?" Of course, they recommend sales force and of course, they turn into referral partners. But if you look at the timeline, that's actually the second step. And I think this is a nice idea. And I'm sorry for diving so deep into it, is really understanding why would a different company voice their own agenda, their own goals, pay into your goals. And it's only the point of, if you really are aligned and going to having mutual interest in that. - Yeah, reinforcing the importance of alignment and mutual interest is super important here. And it's one of those things where I would ask anybody who's thinking about partnerships to think about this. If we are struggling with alignment inside our own organization, how can we think that we might be able to create alignment outside of our organization? And I see you smiling. Have you experienced instances where people who are not aligned inside their organization try to build out partnership programs and ultimately, have you experienced that before? - Yes, I mean, one is that sometimes it's feel like, yeah, we can't fix our own internal process. So let's partner, maybe they miraculously solve that, but actually makes it probably even more harder. I have another thing which is very close to my heart. It's, if you talk about internal alignment or missing internal alignments, very often that teams are set up to compete with each other. So it's marketing, says, complaints that says that not convert the leads correctly. It says complaints that the leads that are by marketing are more ideal to say politely. And then people spend time on arguing who generated that lead which actually performed. And if you bring an external partner in, you add to that, discussion where then the people start, I would say they start fighting, distributing the cake instead of working together to bake three more. Right? And if you are on target, if your business is growing and everything runs smoothly, that's nice and it's not servicing. The problem is it starts the moment when the goals are hard to hit and people. And in this moment where you would actually, everybody to pull together and work as a team, that's the moment when some people will start then to try to grab that lead or steal this deal or ultimately it's a devil circle. In the moment where you need them to work together, they start fighting against each other. And any minute you have an escalation like at this conversation on the, on the first session, this part of me, one said, I can't recall how many slack escalations I was pulled into this decide whether this was a partner generated or partner source lead or whatever lead. And any minute you spend on mediating this or negotiating this or solving this is a minute you don't have to win the next partner, the next client, the next prospect. So this is really crazy. And if you again, if you're marketing sales and as the art teams and CS teams are not aligned and thing are pointing why certain things don't happen and then you have an external partner, you know, as an external partner, I would just walk away and say, you saw all this stuff alone, you may come back when you have aligned yourself. An conflict can occur both inside an organization and outside of an organization. And I've been around a number of organizations where channel conflict has been created intentionally. And it's unfortunate that when channel conflict is created intentionally because it does not serve either organization well and had an instance way back when when we're talking about some leads and in contacts and who is going to take primary ownership of managing the sales cycle with the client. And the leader in that segment of the business and back and said, remember who pays your check, who pays your salary, who signs your check. And it was a shot really at we need to put the organization first. We need to put the organization first. And on that side, it was not really about the organization first. It was about where whether or not someone was going to get a full commission on a deal. And so it was more about them, not the organization. And it certainly wasn't about the client. It wasn't about where how do we put ourselves in the best position to serve the client. How do we put ourselves in the best position to continue to engage in the partner who's investing time, energy and resources across building out a certain ecosystem. How do we how do we come together and say, look, we ran into a challenge. How do we avoid channel conflict in the future, put systems and process in place? What is our comfort level with channel conflict because we know that as we're growing quickly, things are going to break. And then how do we resolve that conflict when things happen? And if you know those kind of three things, you'll be in a better position to not have to get into this constant back and forth negotiation. Yeah, and I think the the takeaway here is we're talking through this is realize that conflict occurs inside your organizations, especially as teams are going to collaborate or conversions happen across teams, martin shared marketing to sales as an example or even sales to success as an example, like those conversions, how well do how well are we aligned there? So let's talk about alignment. How do we get aligned? What are some ways? What are some best practices? Things that we can do is leaders inside organizations to improve alignment. That's something which I think a lot and I regularly get asked about how should we build a complaint for partnerships and the likes. And then the thing is I personally believe in team goals to incentivize the people to work like you know incentivize them on the behavior you want to see. Yeah. And that's a completely different story and that's not my core, but I still wonder why sales reps are the only ones who are we believe we need to put the character in front of them to make them work. We don't put a commission on the developer's head for the number of code lines he writes or the number of submits he does in the GitHub or you know that's what we do believe or seem to believe that sales reps don't function unless we force them with money. And if you incentivize very strongly on an individual level, then you absolutely encourage a realistic behavior. If you don't want a realistic behavior, so what I see is that you have a complaint and then you start on I have to build all these rules and regulations and exceptions and measurements and laws and ultimately you could say to yourself if you would probably don't put so much pressure on the individual bonus or a commission plan. But that's not my area. I'm happy. I'm not a CEO. I'm a CSO because my partnership teams are always focused on team goals or have always been focused on team goals. And I made more, you know, variable pay for individual performance on quality, not on quantity or you know, on things I want them to do. Let's actually let's let's because the topic has come up. So let's get go into this and go back and forth with each other a little bit on this piece around a compensation as an example or alignment in objectives or really in the different incentives that you put in place to reinforce certain behaviors. As a former chief revenue officer or someone who operates as a fractional chief revenue officer, these things are really important. You have got to understand number one, what are the jobs to be done? What's the actual work that needs to happen? What are the outcomes? What are the objectives? What are we actually trying to accomplish? So what from a goal perspective, then how from a strategy perspective and then what from a tactical work standpoint, and then you can kind of go through that and say, all right, given what we know about what we're trying to accomplish and then how we're organizing the team to go after and accomplish it, here are the specific things, behaviors that we want, jobs, tasks, however you want to organize it to be done in order to get there. Now sometimes the job to be done, the role, the type of person that you're trying to bring in for that job to be done, you want them to be super hungry to be able to go out and eat what they kill to grow a business, to create this opportunity that's much bigger than themselves. So like you don't want them just to come in at their on target earnings or coming at plan. You want a certain persona that you want to bring in and to bring in and attract that type of persona, you lay out they are interested in a plan where they're taking 50% their leverage to 50% or 50% of their compensation is based on a base payment and 50% is based on variable. That is very different than wanting to bring somebody in who you're actually looking to maybe cultivate a much longer term relationship, do a lot of other things inside the business and then create other opportunities for growth. In that instance you might have a 6040 or 7525 leveraged plan. When you start looking at this from a partner perspective and you think about partners that you're paying 30 cents on the dollar, a 30% commission for winning business and securing and managing that business or maybe 10% because they're a referral partner or 50% because they're some other type of partner or whatever your framework is. Remember what behavior you're looking to incentivize and how you are operating and plugging into their business. I think they both apply. Martin, I know this is a little bit different direction than what we intended in the conversation. But would you agree that the thinking applies relative to how you determine people that you want to hire into certain roles inside your business to do certain work and the types of partners you want to bring on to do certain things to help your business grow and then you've got to factor in compensation levels, shared risk, shared value exchange in each of those discussions. I mean, you totally open up a big part of the questions here. Let me try to answer first the easiest one. Rule number one in channel partnerships, whatever you pay them as commission does, it's never enough. What does it mean? People will not start selling more because you give them 5% more commission because remember the channel business is there not in the business of selling your software than the business to sell their own business. Well, they are on services and your partner needs to be tied in nicely. They will not say no to 5% more but it will not bring you in a more business. So that's number one. Number two, 30% commission on a reseller versus your own commission. Keep in mind and we had this conversation previously and I know that you are very much aware of it. But some others are not. The 10% you probably pay your sales rep just for clothing the deal. The 30% you pay to Resilus probably because they also brought the lead. They probably also went through the sales cycle. They qualified it. They actually do the billing. You don't have the admin part. You don't even have the cash flow risk because they pay you and they collect the money. So they have the collective collection risk. So just don't compare Apple and peers on that one. Right. For the other question. I'm coming as you know and here I'm from my wonderful accent. I'm from Germany. We do not have anything close to 50, 50 on sales in all the story. Natural to have I mean maybe then in some exceptions but normally with our other look at 73 or something like that because we don't want people to be need to close deals to pay their rents or their mortgages. What happens if you put them and I don't really believe in this hungry because this hungry means for me that they are somewhat desperate. They have not you know if you look at the Muffelot Charomet of things we need to cover as human beings food is the underlying thing. If you're not having enough food then you die. So they need to do whatever it takes to get this money to pay their bills or you know by food. If you have this in mind how do you prevent that they all result. How do you prevent that they do shit and shit out on apologies for my French here. You know that you mentioned earlier this alignment you know they close the steel they get their commission they throw it at CS and CS then has a first on-boarding call with the customer and customer says oh by the way whereas the unique one you promised me your company your software would be and CS says oh wait let me check with the roadmap with the product people when it will be on the roadmap because the seller completely did too much to just get this you closed or the other behavior I hate is that people will try to block as much claim as much territory as they potentially can because they are always afraid that whatever territory they need to give away would be the one where the big fish is the gold voice that the gold thingy in the mountain when you had gold rush right everybody was trying to claim as much land even though not in five years they could have even managed to work on it and this is really where I feel like what's wrong with paying them the people a solid salary and just do a normal person development talk with them you know whether they perform or not you can see if they do the activities you can check your sales for CRM that they do the calls that they follow up on the lead took it them five days to write a follow up email um what will change if you pay them on this and this is the moment where as a as a partnership person I feel like there's something in my opinion broken in the bigger system and I know that neither you nor me will change it but if you can get one revenue read out they're thinking twice about their commission and why they believe this would and they they are somewhere more open to look at team targets because you know if you sell to enterprises we know this right if you have a big deal to close you need your solution engineers your sales engineers need your CS team it's not and why does they get all the credit when the hard explanation comes from the sales engineer who sits down writes the concept convinces them and just they because you say you get a big check I don't get that so I think the the the the and this is a really good conversation to have among leaders inside an organization and look at Martin and I as both leaders inside organizations who have dealt with many of these challenges and questions and you go through the process of saying okay well how do we compensate people fairly well one thing depending on rule I never want I never want the person who's in that role to have to hit their on target earnings to live the lifestyle that they want to live like you should not you should be able to pay rent and provide food and do all of those things with your base salary and and set up your standard of living as an individual contributor to align with that so that the variable commission the other part of that is is additive now I know that there are some people saying hey you know that sounds great you've got 20 some odd years of experience in leading sales teams and operating as an individual contributor and doing all of those things look I was there I made less than $36,000 a year in my first couple of years out of school working at UPS I there are you start to you start to adjust your living based on based on means and not get yourself into a situation where you expect because I hit my on target earnings or I blow through a number that that's now my new standard my new standard there are people who will manage to a number and they'll manage to a number to keep it consistent at that at that OTE but those aren't the kind of people that you want in those roles that have the high upside for growth the other thing that I think Martin really hit on is the importance of leadership inside your organization because as a leader if I have people who are selling solutions into organizations that were not able to renew because when we hand them over to customer success that were the things weren't aligned meaning we didn't have an account plan in place we weren't clear about fit we we convinced them to buy something instead of aligned with solving for a specific problem that we know inside their organization that's a leadership problem that falls back on me that's not the rep if I allow the rep to continue to behave like that again all on me because I'm supporting and driving that and I'm talking to you the leader that's out there who will in the course of the next two months get toward the end of the quarter and you push your reps to get deals over the line because you want to hit your quarterly number and then you get irritated when those deals come in and they don't have pipeline for the remaining part of the year or they go into a customer success and they don't renew and they don't grow so this this is a leadership challenge that we've run into in organizations and it translates over to the same problem that we have on the partnership side when we start to put specific criteria in place in order for partners to maintain an exclusivity or do you do it's something is right yeah so so Martin you got me fired up on a Monday on a Monday morning thank you Monday I mean this this is this one thing which I think you know I the one thing I never get my rep my head around and says is why would you accept the deal just because it's 28th of December why would you accept the deal which you wouldn't look at on 2nd of January right and this is X but the leadership you know you mentioned the leadership thing but keeping in mind that the average tenure of a CRO in a startup is what is it 17 18 months yeah it keeps shrinking you know it's in a 40 you know it needs to scale up to the the founder or the board because if I incentivize my revenue leader or my CRO my CRO on hitting this sometimes insane numbers to keep their job of course they will pull the pressure down and this is something which I in a couple of things which it's it's I hope they can translate to English a bit you know it's a difference I present things between being entrepreneur which is thinking the long term and being a manager you know there was this this movie back in the 80s with Danny David OPM other people's money right you it's it's it's your money was it other people's money which you just try to get as much as possible from them and this drips down to something else we can say in German it's in now do I literally convince the client the prospect about buying my software did I convince them in a meaning that they understand the value or do they talk them into it you know did I kind of just talk them through the obstacles or objections and just got them to sign take my bill I will take my commission check and look for the next job right and this is something I already had today to call with the someone from a billion you know talk about the billion who is also doing you know sales consulting for for several years now and we kind of shared you know and he said like he he started his 10 year on sales many many years ago as a when they it wasn't a company was selling for Google Google ads when they were still you know more new and he always looked into this consultative selling even without completely knowing that it's consultative selling so he never talk companies into it because he made sure that his customers were happy with him and he built his reputation for this and some of his colleagues were trying to put their quotas or trying to put their OTEs or the kickers or they are all these fancy names you have when you get over your target and they burned brands for years which will never ever or never touched Google ads ever or any Google product ever again right and this is what I think is the question between if you look at the good old old school businesses which were built up by our fathers or grandfathers or grandmothers they were always looking like how do I build this company that my grandchildren will have a great company to continue to work on and with this venture capital that sometimes is like hey let's hit the next quarter and I don't I don't even think about next year right it the incentives are misaligned yes the incentive. If you have a channel conflict, if you have it, that's something, you know, I always say, I was on Pervian on the zero summoning spoken in a room of, or I was on a panel in front of 150 zeros. And there was a questionable channel conflict and I got very agitated about it because I'm very passionate about it. I said, there's no channel conflict. It's not a direct sales team. It's not a partnership deal. It's a company deal. If you have a channel conflict, your incentive systems are broken. You would not allow a number one steal a deal from a number two. Why the heck would you allow a in number one from stealing from a partner, which are trying to put your product to the market. And guess what? If you do this, you said that, you know, if somebody does it fire this person, and they looked at me, bling, I said, okay, maybe give him, it was Europe, you know, you need to give him a warning, but you know, if he does it twice, then you fire him or her because they must not do this. This is this is not acceptable behavior. Neither in your own team, nor in your extended partnership team. Guess what? The other partner probably has 10 more deals, which I mean, not bring to you, no, anymore because he had a very bad experience, somebody poached your client. I have a good friend, zero, George, from Canada, he said, don't approach my clients. And the one escalation, we once had even caught me in the middle of the night because time there's on different segment and you're approaching my clients, I said, no, we don't. I don't know what you what the situations, but I can promise you we never approach your clients. And then we died deep and it was a misunderstanding and turned out there be a misalignment. We of course never poach the time his client reached out to us, we refer to him back to to our partner. And that's speaking about processes said earlier, if you grow fast, should you hit the fan, there will be things going wrong. So you have to have a plan and your plan A and you have to have a plan B. So you should have a process that your CRM is capturing potential partner leads, but you also sometimes partners don't share it. So the plan B would be that your pricing is on power with a partner's pricing, you don't undercut your partners. So even if and the good procurement should always reach out to the vendor directly to get a second quote. So if you are reached out approached by an inbound, nice name, your price, which you give out because you just don't know that's a partner or lead should not be undercutting a partner. Nothing happened. It happened to me, I have been there. Great name inbound. As the YGTS excited checks says for some wasn't in says for us gives it to a e a e just out. Since other quote was exactly on power the partner. Nothing happened. Yes. The alignment alignment. So in a hole as we are going through this conversation that you realize that although we're talking about partners, this is not about external partners. I mean, we've talked about a little bit about internal partners and external partners. This is a, this is an organization leadership challenge higher the right people reinforce the right behaviors. Evaluate your data and continue to adjust. And over time, when you see bad behavior, you see misaligned behavior put the systems and processes in place to correct those. Because you will when you bring on partners create channel conflict that channel conflict might be across the partner ecosystem partner partner channel conflict. It may actually be indirect versus direct channel conflict. Partners versus direct sales groups. It may be inside your organization. If you take the time though to identify the conflict. Or through the conflict. A solve for the problem associated with the conflict and communicate clearly good things will happen you will learn and your business will grow. And that is leadership. That is culture. Like those are two very important aspects to this that have a significant impact on your ability to serve customers your ability to work with partners your ability to be a good partner, which ultimately drive revenue and execution. And that's how they all kind of align with each other as we've been going through the conversation. I love the discussion around the experiences that you've had where if something comes in it's not in sales force. It's you end up communicating to that person that here's what the deal is and then they see the consistency in the market around the pricing. You've now built a level of trust not only with the partner. But also with the customer and you have some consistency across and that's what we're looking for like we want this consistency and this trust. If that person went into sales force saw that there was a partner and knowing that there was a partner in there knowing what the partner pricing was and decided to undercut it by 10% to try to get the deal. Now what have you done. So what happens in that situation? How would that conversation a gone bar and if that was the experience where the person the partner didn't register the deal properly or the information didn't go into into into or actually excuse me the partner did register the deal. The information is in the CRM comes in as an imbound lead somebody else takes that imbound lead and then decides to keep against that partner and provide an additional 10% discount. How do those conversations go with both the partner and with the client. Very clear answer here. If you said about it, we talk about alignment. The alignment starts with being very vocal and transparent about the expectations way too often we assume that the other person knows what I expecting without actually talking about it. So given that this a knows that we are a partner first company and he knows or she that she shouldn't undercut the partner and there's a real clear process. If you see it's a partner, the first thing you do you reach out to the partner manager and the partner letting them know that they come back to our wedding in bones and then you go back with the aligned pricing. If this was clear, which I would assume it was, it should have been and this person did behave then it clearly behaved against a clear rule of engagement in US I would fire this person in Germany takes a bit longer but that would be the first of the red flags I need to fire this person. And the conversation with the partner would be I would literally go on my knees and back for pardon that it happened explaining what steps we took internally that it will never happen again and yeah, period that that's what I did when something like that happened I had seen that in another situation where I had people who were really hungry or made hungry didn't had enough to eat and felt like they need to get the stand deal in. So to close the quarter and I mean, she said right this was not ideal alignment, even though there was a clear rule that there was just too tempting to get any deal in and we had to make this so you must not allow it it's toxic. You cannot allow yourself to allow such a big organization as simple as that as hard as it might be for the individual. It must not must just not happen and people will get emotional about it, I mean because they get emotional for a number of reasons it could be the money that's a stake it could be the performance it could be something that's going on inside your household that you know absolutely nothing about where they just got into an argument with somebody and it just happened that they made a poor decision like there there's so many different things that can influence behavior because we're dealing with human beings we. Human beings on both sides we've human on the customer side on the partner side on the internal side we've got all of this pressure you've got investor pressure depending on how you're funding your organization so so be okay with the fact that people are going to make mistakes. The the challenges if they make mistakes with malicious intent if they make mistakes because they're deliberately trying to do something differently that isn't doesn't align with or values then you can get into some of those discussions around how do we remediate that do we do it through some kind of termination do we do it through some kind of performance improvement plan that we do it through some other kind of documentation. Process but if the expectations aren't clear around what is expected from a behavior perspective what's expected related to a core principal perspective then how can you expect your people to behave properly if you've not set up those proper those proper expectations and how can you expect your partners to behave properly I think the thing again just to reinforce this this is not only a partner go tomorrow discussion this is a leadership thing that we all run into and we run into it with partners inside our organization and outside of our organization and I really appreciate the discussion martin both around alignment around communication around expectation and and that peace around thinking of it differently about how we compensate people because there are a number of different ways to incentivize people to do certain things and there are different compensation models that work there there's a company that I'm familiar with out here in the state who's removed variable compensation so they just they do a simple a salary with some kind of bonus structure in there for the for people who are part of their revenue teams that can work. Just know what part of the game you're playing and what things your what behaviors you're trying to drive and how you're working through it. Martin awesome conversation. This I think we should probably do this again and because you get you start to realize at least what I realize in these kind of conversations is how similar the challenges we run into are from a global perspective like this is not a operating channel partnerships in us or North America versus operating channel partnerships in Berlin or across the broader dock region or across Europe. It's we are ultimately run into a similar set of challenges anytime you're talking about things like making money revenue we're dealing with people human beings who are interacting with humans and then working through processes and systems like the organization things that that play through. So thank you very much for the conversation. Where can people find out more about what you're working on? Where can they connect with you directly? I think the easiest way of it be our link and profile. So look for partner experience or our website partner experience.com with the big X that would be the easiest one to connect with us and find out what we're doing and how we help companies to achieve capital efficient growth by using partnerships to elevate their existing digital market. Perfect. We'll include links in the show notes. If you know of somebody who would find this conversation valuable please share with them and let Martin and I know be a LinkedIn. We're both the active online. It's good to see those shares. The shares help grow the audience and help expose the content to a number of folks who are struggling with the kind of challenges that we'll talk about in a conversation. We've talked about this conversation and we'll talk about another conversations on the podcast. Sales is a thinking process. Business is a thinking process. Life is a thinking process. How are you thinking differently about your process?