Taking the Lead

Solution provider Extremely Productive has given up on vendor-generated business leads. But ask another provider, Forepoint, and you'll get more than 200,000 reasons for participating in a vendor lead generation program.

Forepoint, of Woodinville, Wash., has earned close to $250,000 in revenue directly as a result of accounting software vendor Sage Software's lead referral program, said Forepoint co-founder and partner Kevin Cumley.

But Josh Ovett, president of Extremely Productive, in Roswell, Ga., which specializes in CRM (customer relationship management) solutions, has a decidedly different view of lead generation by vendors, including Sage.

"Most vendor leads don't get to you soon enough and don't necessarily have enough information," Ovett said. "If they're too qualified, it takes too long to get them. If they don't qualify enough, you don't know what the [prospect] is doing."

What works for one provider may not work for another, but love them or hate them, lead generation and referral programs are a necessary component in any vendor's sales strategy. How else would they manage the myriad phone calls, e-mails and Web site hits they receive from a mind-boggling array of visitors, ranging from bored college students to checkbook-wielding chief technology officers of Fortune 500 corporations?

Vendors get barraged with requests for follow-up. How they transfer these possible sales to their partners as well as how they match the partner with the lead and how well-qualified the lead is determine the success —or failure —of their efforts.

Getting creative with leads

"Successful vendor lead generation programs are the ones that have some front-end qualification prior to disseminating the leads to partners, relevant and comprehensive partner capability snapshots to ensure the lead is fit for a particular partner, and a closed-loop system to ensure that the lead was handled appropriately and the customer was satisfied," said Tiffani Bova, an analyst at market research company Gartner.

In sync with vendors

Some solution providers profit, literally, from leads their vendor partners have provided. Others have seen less success: Either they do not get any leads, or those they receive generally do not result in a sale.

Forepoint is among the former. The CRM and accounting solution provider credits Sage for more than half the leads it received in 2006.

"That's not to say half our revenue comes from Sage," said Cumley. "Last year, we had 230 total leads. Of those, 150 came from Sage. Out of those, about 10 percent converted into solid opportunities, and about eight turned into sales."

Such statistics may appear less than encouraging, but Cumley is measuring success by looking at profit. Even so, he acknowledges that relying solely on vendors for prospective sales gets you only so far.

"If you're depending on the vendor for all your leads, you're putting your business in danger," Cumley said. "We really view the Sage leads as gravy. We don't depend on them, but we're very glad to have them."

Solution providers and ISVs should remain in sync with their vendor partners' marketing and technology initiatives, said Edward Vesely, vice president of worldwide marketing at Lakeview Technology, an IBM partner based in Oakbrook Terrace, Ill.

"IBM sets the course," Vesely said. "We align and add value. Our dollars, yen and euros go a lot further. There's a lot of synergy. [Some partners] expect IBM —being as large as they are —to do all the heavy lifting. We actually try to bring a lot to the equation."

Vendors and their partners often view lead referrals as a reward for a solution provider's investment in a particular product line or technology.

Many developers have tiered channel programs: Those channel companies simply reselling product do not have access to many benefits, including sales referrals and lead generation, while those in the upper echelon, which have invested in additional training, certification and support staff, can take advantage of these offerings.

Solution providers can further increase their odds by developing an ongoing relationship —both at the local and at the corporate level—based on trust and the knowledge that both parties bring something valuable to the equation.

"We recognize that IBM has a lot of partners, and IBM recognizes Lake­view has a lot of partners," said Vesely. "There's an awful lot of integrity that keeps the relationship going. IBM has developed a tremendous ecosystem of partners. The partners that can figure this out will benefit."

Sometimes, vendors can easily determine the most appropriate partner to receive a lead, based on geography, technical specialty or vertical focus. Other times, it is more challenging for vendors, especially larger organizations with thousands of partners, said Chris Wong, vice president of strategy and marketing for ISV and developer relations at IBM, in Armonk, N.Y.

Although the project is in its early stages, the company is developing a ranking system to ensure the most qualified partners are given the most appropriate sales leads, Wong said. "I'm interested in tapping the resources of my [IBM] sellers who interact with our partners in the field," continued Wong. "We're trying to determine if there's some kind of qualified information we can use. Can we put almost a rating system in place? But it's too early [to discuss]."

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