Jay McBain addressing channel partners at EDGE 2017
Over the past few decades, sales and marketing leaders have been transforming themselves into predictable, data-driven business units.
The CRM stage started in the 1990s and accelerated quickly a decade later with lower-priced cloud offerings.
The marketing automation stage began to grow exponentially around 2008 and has reached critical mass in its first decade.
It is difficult to find sales and marketing leaders who haven’t automated their processes and built their strategy around these platforms.
What was once called an “art” is now very much a science, and there is no going back to the old back-of-the-napkin ways.
With 75 per cent of world trade flowing indirectly (WTO), the time has come for channels, partnerships, and alliances to be enabled with the same level of passion.
The third stage in sales and marketing transformation will be anchored around effective partner management and through-channel marketing automation (TCMA).
Enabling partners of all types to leverage vendor content, messaging, branding, and demand generation initiatives in their local markets is critical to driving a winning customer experience.
Those brands that can balance their direct and indirect execution while ensuring consistent customer expectations through distributed and localised marketing will have outsized success in the market.
The first step for a brand is to understand the growing number of partners and influencers, what they are specialised in, their sales and marketing acumen, and how they go to market.
There will be experts, do-it-yourself, do-it-for-me, and laggards (do-it-on-behalf-of) that each need to be enabled in different ways.
Platforms will need to be flexible, self-service (partner or concierge service), and highly automated to cover the plethora of digital and physical tactics.
According to Forrester research, only about half of brands have implemented TCMA, with only 17 per cent fully satisfied that they are getting the most from the systems.
We believe that there will be significant interest in this third stage over the next few years.
Here is a glimpse of the global TCMA market:
- Thirty-five channel software vendors have TCMA solutions, driving US$310 million in pure software revenue. Another US$400 million is driven via TCMA-related concierge, integration, and consulting services by these firms
- Forrester predicts the TCMA software market to grow to US$1.18 billion by 2023, a CAGR of 25.2 per cent. Another US$1.3 billion will be generated in services at these firms
- The broader TCMA market includes tens of thousands of marketing digital agencies that will realise US$2 billion of services revenue by 2023, creating a total US$4.5 billion ecosystem
- TCMA is a horizontal solution serving indirect channels in all 27 industries. The top five industries by revenue are technology/telco (20 per cent), retail/franchising (20 per cent), automotive (17 per cent), manufacturing (10 per cent), and healthcare/pharmaceutical (seven per cent)
- Over six million end-users log into these systems, with the average deal size around US$218,000 for these vendors
- Over 2,000 employees are fully dedicated to TCMA software development, with tens of thousands of others making money services wrapped around it. According to LinkedIn, these vendors had 2.9 per cent employee growth last year and 17.9 per cent in the past two years
- This is a mature industry; the average company is 17 years old and mostly US-based. Only five companies were founded outside the US
We are seeing numerous changes happen within channels across every industry and region of the world. From demographic shifts to new buyers emboldening new types of channels, the need to manage a growing and diverse set of partners and alliances is critical to a brand’s success.
The through-channel marketing automation market is growing because more B2B marketing professionals see distributed and local marketing as key to influencing new buyers.
They are placing trust in TCMA providers to act as strategic partners, allowing them to broaden their reach and influence customers in new ways.
As legacy technology becomes outdated and less effective, improved capabilities in workflow, governance, analytics, and self-service will dictate which TCMA providers will lead the pack.
Jay McBain is principal analyst of channels at Forrester. Jay leads Forrester's research and advisory for global channels, alliances, and partnerships. He focuses on B2B marketing in the age of the customer; understanding and navigating the complexity of multiple routes to market; ensuring contextual and relevant content to accelerate the indirect sales process; and describing the technology infrastructure to build and support channel relationships.
