Partnerships Unraveled
The weekly podcast where we unravel the mysteries of partnerships and channel to help you become more successful.
Partnerships Unraveled
Nick Verykios and Scott Frew - How to Make Your Channel Indispensable
This week on Partnerships Unraveled, we’re joined by two heavyweights of channel innovation - Scott Frew and Nick Verykios, serial entrepreneurs and the masterminds behind multiple successful distribution ventures. From building businesses like Distribution Central and One World Systems to their current work with iAsset, they’ve seen firsthand how the channel has evolved, and more importantly, where it’s heading.
We dig into the systemic friction in current go-to-market motions and uncover why trust, not transactions, is still the foundation of successful partner ecosystems. Scott unveils his LIPP strategy (Land, Invest, Protect, Surrender), a refreshingly comprehensive lifecycle model that puts channel relationships front and center. Meanwhile, Nick breaks down the real tension between hyper-scale and hyper-customization and why the solution lies in intelligent automation, not more portals.
Together, they offer a powerful vision of how ecosystem platforms can unify sales, marketing, quoting, and lifecycle management to radically improve performance. From enabling smarter channel investment strategies based on LTV: CAC, to redefining push vs. pull dynamics as loyalty vs. value, this episode is packed with practical insights for channel professionals ready to modernize.
If you’re a vendor, distributor, or channel leader looking to scale with agility and precision, this episode is essential listening.
Connect with Scott: https://www.linkedin.com/in/scottkfrew/
Connect with Nick: https://www.linkedin.com/in/nverykios/
_________________________
Learn more about Channext 👇
https://channext.com/
Watch on YouTube ►
https://www.youtube.com/@channext
#channelmarketing #channelpartners
Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships and channel on a weekly basis. My name is Alex Whitford, I'm the VP of Revenue at Chanix and this week I'm very excited to welcome our special guests Scott. Nick, how are you doing Good, Really good, Nick. Apart from you having some technical challenges, we understand that obviously you have a really long background in terms of channel. Talk us through a little bit about who you are and what you've done.
Speaker 1:Yeah, sure, I got into this industry by accident. I was asked to join a modem company remember those things uh, to commoditize it. That worked, because I came from fast moving consumer goods. Ended up building an it distribution company called one world systems. Uh, just around about the time that I met scott.
Speaker 1:Scott went down the cisco and uh three com route. I went down the advanced and emerging technologies on comms, ended up selling that company to what is now known as Ingram, ended up joining Scott with Land Systems. We built a brilliant business that was sold to Wescon. Eventually we started Distribution Central together again that we sold that to Arrow. So we're several entrepreneurs but our focus is on not just advanced and emerging technologies but our focus was always around innovation and distribution, which really ended up being systems, and automation, which got us here. When we actually spun out iAsset out of Distribution Central, because all our vendors around the globe, because we had an average, a total addressable market share of 92%, which was unheard of to go and conquer the world, we said no, we'll just sell the technology that does that.
Speaker 2:And here we are. Awesome Nick, maybe Scott, coming to you. You obviously come from a technical background and then, as this sort of, have serial distribution and entrepreneurial success. But I'm keen to get a breakdown of your sort of vision on what vendors and distributors still haven't solved when it comes to go-to-market strategy through the channel.
Speaker 3:So, given all of the distribution companies I've built and the ones that I now help run, the distributors generally service a component that the manufacturers don't want to. So forget credit provision and logistics. There's the myriad of relationships and if you're a US vendor and you want to build relationships with people in Thailand and Estonia and Canada and all these different cultural business places or marketplaces, it behooves them to use distribution because they've got those relationships in place and the channel is, when you really boil it down, a set of relationships and a set of trust, and where trust works well, everyone makes money and everyone's happy. Where trust doesn't work well, it all falls apart.
Speaker 2:Awesome. Maybe, Nick, I think, from your perspective, we prepped very hard on the real cost of inertia, right? I think, the real power of having that bank of relationships globally as you generate this hypererscale right. That's the whole point of the channel how can we touch as many end users as possible. But hyperscale and agility don't really work well together. They're often in conflict. What are the reasons that inertia happens within the channel and how can we potentially help mitigate some of those agility challenges?
Speaker 1:Can we potentially help mitigate some of those agility challenges? Yeah, hyperscale seems to be in direct opposition to hyperisolation. What I mean by that is every single instance is unique. You have to do that with automation to get to every single one. What we get is a world today where the problem is when all that occurs is next quarter. Next quarter is an infinite isolation of numbers that have to be achieved, as opposed to a strategy that's supposed to get you there.
Speaker 1:All right, there's no common ground between hyper-customisation and hyperscale. All right, there's a real big difference, and that's because no technology lives in isolation. And because no technology lives in isolation, everyone who is executing on a vendor program is executing on their vendor program, and they might have four or five products that they need to execute in a deployment to be able to achieve an end customer outcome, and the channel programs are diametrically opposed. So somehow, somewhere there needs to be some middleware if you like to be able to produce a campaign that allows an end customer, based on their installed base data and information critical data, to be able to execute on an outcome with this really critical thing called a quote that says this is how much it's going to cost. All right, this is now starting to happen, all right, but it's so new and it's so diametrically opposed to most vendor programs that it's almost there's almost resistance to it.
Speaker 2:no, there actually is resistance to it yeah, I, I really sort of see that your ability to present the information to an end customer at the right moment, that becomes really the goal of the channel. Right, and we've done that in a very organic way. Scott, you talked spoke a lot about building channel by trust. Right, hey, I trust that this partner has the information and I trust that this partner is going to use that information. But that doesn't particularly work when we talk at scale, because, well, I'd love to have trust of 500,000 partners. I don't know them. Right, we're building programs to galvanize that. You really talk, scott, from a lifecycle perspective. Talk to me about your LIPS strategy and how that can come together with trust or with technology or with programs to really drive performance.
Speaker 3:So the whole LIPS strategy underpins the ability to build those trust networks. So if you think of the LIP strategy as we outline land, invest, protect and surrender, it's a little different to the manufacturers who think in terms of layer, which is land, adopt, expand or renew. This is more holistic and it works better at a channel level. So the land piece is, you know, as I'm sure you've seen videos I'm an advocate of Ray Kroc, not of the food but of the process, which is you've sunk all of the costs to get the customer there in the burger. So you want to make sure you take the fries, the apple pie and the Coke and the supersizing and everything else you can take on that net new deal. And how do you automate that so that your partners or the sales reps that you have working for you put all that on as a standard process? Then you move to invest. So let's just assume orders come out, point of sale data has come back, invoicing data we're taking as many points of data as you can get. Now you have an install base with everyone linked vendor, distributor, reseller, end customer, serial numbers or contract data, whatever it is. So now you can go and selectively find those customers. So find me all firewalls that look like this, that are missing this piece or whatever it is. Then protect.
Speaker 3:Now everyone thinks renewals is the process, but actually protect has a number of functions before you just fall into renewal. The first one is do I want to renew a customer? You may not want to. You may upgrade them, change the technology, whatever, but it's also an expand motion. So every time you send a renewal out, there should be at least some suggestion of an expand sale. If not, sure you can fall into the straight renewals process and automate that so that you don't have sales reps wasting their time creating renewal quotes.
Speaker 3:The last part is surrender, which no one handles appropriately in the channel, which is what happens. When the manufacturer calls end of life. The distributors typically delete it out of the systems. The resellers don't know and the end user can be exposed. So you need to manage all of those, and I mean for the European listeners. There's also a carbon component in surrender, which is the circular economy piece. How do I understand how much carbon I've emitted, how much of my install base has been accounted for, and how do I get products back up the food chain and track that, going back into either e-waste or recycling or whatever it is program. So that's, that's the strategy, and it doesn't matter whether customers are running on asset or not. They still have to deal with those four functions.
Speaker 1:And Scotty, if I could just add to that. The other phenomena that we're experiencing at the moment is we're used to surrender being moving from in-house to cloud, and now what we're seeing is the movement from cloud back to in-house as well, in data centers. So the data associated to both those sides of the transaction is ultra important. The trust comes from who owns that data. The trust comes from who knows about that data and who can execute authentically on that data based on the end customer's requirement.
Speaker 2:Yeah, I think I'm always sort of fascinated about what direct businesses know. Inherently, that channel businesses struggle to understand, and it's because we have that separation between the end customer and so LTV to CAC ratio is something all direct businesses are obsessed with the understanding of. How much does a customer pay us year one, but not that's enough. What are they going to pay us year two, year three, year four, year five? And your goal as a product team, as an engineering team, as a go-to-market team, is to understand how do we increase LTV? Because if we can increase LTV, we can spend more money to acquire that customer. Your LIP strategy is exactly that right. It's a function of what do we do about LTV?
Speaker 1:Now, no revenue leader worth their salt isn't focused on LTV as their primary objective and you know, Alex, it's so spot on, mate, because 100% of the end customers that I've spoken to, all they want is lifetime value of the investment that they've injected in the first place. And what that means is I've given you a hundred bucks. I know I'm going to give you more. Tell me what it's going to be so I can actually increase the value of the investments that I've already sunk. They think of it in financial terms, whereas a lot of the channel partners think of it in technology terms. But it's a financial transaction that basically says I have given you $10 for $10 of equipment.
Speaker 1:The trust factor comes into it because it says you know what? I didn't actually sell you $10 worth of equipment. I sold you $8 of equipment because you set an $8 budget. Now I've got to come back to you and sell you the rest. I know what I need to sell you. Are you okay with that? That's trust. And then, by the way, for the next five years, I'm going to keep those assets alive, now that we don't have the ridiculous probate-based competitive reverse auction to actually get the first bit of equipment in. And the key is knowing where the data is and who actually has the data to be able to answer those transactions.
Speaker 2:Yeah, and I think the bit that's laid on top of that when I think about a sort of from a strategic perspective, the reason LTV is important, because then you get cap right, which is how much money can I spend to acquire customers, that is your channel, oh yeah, that is your channel, oh yeah. So for me, that's where, if real businesses who really understand how to build programmatic success understand, okay, if I sell this license on average, they're going to buy this for three and a half years and if I do a really good job, we're going to push that to four and a half years. Now, instead of spending more money, uh, you know, on aes, we're going to spend more money on channel, whether that be technology to help drive the channel, uh, tooling, whether that be rebate structures, mdf programs, whatever allows me to land that existing customer. I think so often we index on how do we acquire new logos, which actually from any direct sas business, they'll understand that that's actually less important than improving LTV, because if LTV is 10 years, then I know I can spend loads of money acquiring new customers.
Speaker 2:If my LTV is six months, we have a real problem and within the channel we don't measure that properly, or most businesses don't measure that properly, and if they did have a conceptual understanding of how to do your lip strategy extremely effectively, I can start to invest more in my channel. That allows me to acquire more Netloo logos and drive real success. Nick, coming to you, one of the things that I find really interesting again in terms of channel is push versus pull. Push being I'm going to incentivize behavior, I'm going to build loyalty and that's going to generate a reaction. Pull means I'm going to generate a force that almost drives it right. Maybe dependency talk to me about how your how you view loyalty versus dependency when it comes to building.
Speaker 1:That's awesome what a great question. Um, if, if we change dependency to value, all right, I think I can answer your question better. So, dependency and value what is value? As far as I'm concerned, value is giving someone something that they can't do without, and if that's the case, there's dependency. So if I can continue to drive the option of giving someone that they can't do, give them something they can't do with it, how I'm going to do that?
Speaker 1:The first way I'm going to do that is by telling about it. How am I going to tell them about it? Through some kind of marketing campaign that is tailored to them? All right. Mass customization of a message? All right. And they will know that, based on that campaign I need to consider this. If I also have a quote attached to that of what the execution cost of that is, I can then start to actually go back into the economics of that investment and work out what my ROI is going to be, with the partner's help or with the other influencer's help. So those two things have to happen automatically, but it's got to deliver something that they can't do without but, more importantly, something that they would never have heard of if it wasn't for you. That's where you get dependency Again.
Speaker 2:this sort of concept of taking the lessons from direct and applying them to channel make it easy for people to give you money, right, like we spend a lot of time building sales and marketing programs and enabling customers and building great product and then we go. Well, how are they going to purchase, right? The reason apple makes almost as much money as it does from apple pay as it does from most of its other technology is because they've simplified the procurement process Again apply that learning to your channel?
Speaker 2:How easy is it to transact? We're going to provide information to the end customer.
Speaker 2:We might not provide a quote. Fundamentally, you are making it harder to procure. Aws has built the most profitable arm of their entire business, or Amazon's built the most profitable arm of their entire business, making a procurement model for marketplace right. The reason that works is because enterprise businesses struggle to procure technology. They've simplified that whole process and money flows as a result, right. So understanding how we communicate to our end customer and how we then make it easy to purchase fundamentally providing pricing is a core tenant of that.
Speaker 2:Scott, coming to you when we talk about sales and marketing, to me I think the real thing here and I often joke when I sit down with senior leaders and sort of advise them on how to build business. I was at Zoom during COVID, which means I know that if you can turn demand up to 99, life gets real easy, real fun and we all drive much nicer cars as a result. Talk to me about how sales and marketing should work together to create that pull motion from an end customer and turning demand up to 99 and what that can do to building channel success, customer and turning demand up to 99 and what that can do to building channel success.
Speaker 3:Look, I think, from a marketing aspect and driving demand, which is what marketing is there to do. Right, the challenge we've got across the entire channel is you've got US marketeers trying to drive marketing in a global context that doesn't necessarily land the same way that it does in the US. I think the smarter ones are now giving the ability for some level of cultural customization to get the messaging down, because if you look at security, the risks are all the same. If you look at storage, the backups are all the same. You've got to adjust that. Once you've got the marketing message out there, then you need someone to walk in and make it easy to your point to get a sale.
Speaker 3:I mean, at the end of the day, you know we're and because I've been in distribution all my life, I hate portals. I hate vendor portals. I hate having to log into anything, because if I've got a sales rep that logs into something that isn't our system, that's wasted time because they shouldn't be logging into anything else. They should be outselling. And so you know. My push to your point about the end user is how do you get the quote to flow all the way through the channel to the end customer and then back again, without this cognitive or operational resistance going on. That is the challenge. Marketing can get a lot of stories out there, but it's a challenge of getting that quote to the end customer at the appropriate time to pull the marketing message or land value from that marketing message. If you know what I mean Maybe.
Speaker 2:Then we talked about portals. One final one, and I'll come to both of you for this we really see ecosystem platforms as the model right. Both iAsset and Chanix are ecosystem platforms at heart. They're not point solutions. What does the model channel operating system look like when it comes to quote automation, making it easy for people to procure, combined with marketing, personalization, educating the end customer those two things working in conjunction? What do you think could happen for distributors, for vendors, if they get those two pieces working in conjunction? What do you think could happen for distributors?
Speaker 1:for vendors if they get those two pieces working cohesively. Nick, you first. Okay, that's a big question. I'll try to get the layers out as quick as I can. You're talking about a vendor oligarchy versus a channel democracy, all right, right. So our platforms democratize the ecosystem. What they do is basically allow for what happens at the end customer, which is the consumption of a variety of technologies that don't live in isolation.
Speaker 1:You need someone to service that, all right. You need someone to message that. So you need to be able to mass customize that, otherwise you can't make money. So you need the platforms that actually integrate together, and this is where SaaS platforms fall apart. They don't actually integrate together. When they do, they thrive.
Speaker 1:All right, I'm going to get you the message. I'm going to get you the transaction. I'm going to get you the lifetime value by lifecycle management of the assets that I've bought and also the getting rid of them. When they actually work together, suddenly the end customer is. Their cost of acquisition is low, but magically your cost of sale is low as well, so everyone wins. The problem that you have is everyone's still living in that oligarchy is. My product wins. No, I don't care what happens outside of. At all costs. I'm going to sell my product to the ultimate customer, regardless of anything. That is the significant transition we have to make as SaaS vendors to allow the channel to actually kill that. And vendors win, by the way, without even realizing it.
Speaker 1:But you also mentioned something before and it stuck with me, alex and that is people talk about ecosystems but they don't execute on them. All right, they always come back to if there's $10 on the table. I want it, as opposed to if there's $10 on the table. Mine is about $5, but I can make $50 if I stick with the whole process. I believe that where it falls apart is the information is not disseminated correctly, because it's not disseminated from a custom point of view. Hey, end customer, this is exactly what you need to do. This is my marketing campaign to you. It's only about you, and I've also got a quote that's going to tell you how to execute on it, because I've also got a proposal that's going to explain how I'm going to do it for you. And the reason why I know is because I've already sold you this, okay, Love it Nick.
Speaker 2:Maybe Scott to add to that.
Speaker 3:I mean to talk about Nirvana in a sales context.
Speaker 3:Nirvana for me has always been, you know, the big, hairy, audacious goal whatever you want to call it is connecting all the players.
Speaker 3:So our platform was built to run a distributor or a reseller or a vendor, but where it sings is when you connect all of them together. So you know we're getting quote turnarounds for lifecycle at 34 seconds, up from the reseller, generating an initial opportunity into the distributor's instance, into the manufacturer, back down again with the PDF and Excel to the distributor margin, added down to the reseller and then out the door if the reseller wants to let it go out for the more simplistic stuff. That is nirvana. That's where no humans are involved in, let's say, 60%, 65% of the quote load across a global channel, which means your focus or company's focus on net new accounts, whether that's the right place to focus or not, means that the smarter people can go focus on net new accounts whether that's the right place to focus or not, means that they're smarter people can go do the net new accounts and the relationship building and all the rest of it without having to worry about the load that sits underneath. That's nirvana for me, yeah.
Speaker 1:Scott, I bring up something that you mentioned that I don't want to let go. You mentioned the word Amazon. All right, and what's happening with amazon? And we know that these, there's these billion dollar vendors and billion dollar resellers that are coming up selling that much money on amazon marketplace. And here's the question what? Whatever has driven you to amazon? What's the first thing you see when you hit Amazon?
Speaker 2:Their logo A price? Yeah, fine A quote. A price, I mean. I know what I'm in for. To me, this is the nuts and the bolts of it. Right, which has got to layer on top of what Nirvana looks like. Right, which is does the end customer get the information that they need at the right moment, full stop. Right, which is we want them to understand why they should be buying a suite of technologies, not a product. A suite of technologies that then is able to be procured via a local partner who they know and trust that process.
Speaker 2:that is what we are aiming for Now. We've done this in a very 1970s motion, which is, we've thrown lots of salespeople at it and they run around, they build relationships, they take people for beers because that's what we do. And that has worked, but it obviously is not, from a first principles perspective, the right way to build a channel. What I think is now happening is technology is getting to a place where we can get back to first principles, which is, educate the end customer, make it really, really easy to buy, to finalize guys.
Speaker 1:Alex, can I ask you to expand on that, Because you've really made a massive statement that is so important. Can you expand on that? What you just said?
Speaker 2:For me, the process should be simple, which is, if we want to. In a perfect world, no one would work via the channel. I want to be really clear, Like I think it's really funny when people say, yeah, we love working with the channel. If someone could sell directly to every end user in the world their technology, they would the reason we work with the channel is because there is a requirement for local trusted advisors to combine different products together to provide managed value locally.
Speaker 3:That's why we work with them.
Speaker 2:Now the problem is that creates a load I was about to swear a load of friction, because we have to educate all these trusted advisors on an ecosystem of technology that doesn't work together. We then have to provide logistics and mapping and shipping and pricing and operational complexity to do that, and then we have to hope that they are as good as we are at talking about our own technology, which is impossible. Solve that problem. Talking about our own technology, which is impossible. Solve that problem. We have a solve, which is market a suite of technologies together to the end customer and make it really, really simple to buy. So the trusted advisors can do what they do best, which is manage technology and take them out for beers and manage relationships. Yeah, yeah.
Speaker 1:I think from a partnering point of view. I mean, I could talk to you about this forever, mate, and I know we're constricted in time but that operational complexity that you talked about, what we have to make sure doesn't happen is when we come from a vendor point of view and we look at reference architecture complexity and vendor complexity, which has really hurt the channel. What we have to make sure is we don't create operational complexity by SaaS companies that actually solve a point issue. You solve a point issue, I solve a point issue, someone else solves a point issue. There's no extra complexity because they don't actually all integrate together. If we don't solve that really quick, it's it's futile yeah, and and, and.
Speaker 2:That's really where partner value for me is based right, which is totally partner's job to create best of suite technologies, which is totally these three products together. We're going to wrap our services around a bit and provide insane value to the end customer that way. But what I'm sort of obsessed with at the moment is at the moment we're bridging technical alliances, which is that's product integration. What's coming is go-to-market alliances, and I don't mean meet in the channel, I mean meet through the channel, which is we understand the distributor interoperational connection, we understand the MSP, reseller, whatever it is interoperational connection and then we understand it in an end-user perspective, the marketing Correct.
Speaker 1:I mean, you know our joint friend, you know, jay McBain talks about 15 moments or 33 moments, depending on what the sales cycle is of interaction. That's fucking complex, right? That's really complex. There you go, alex. That could really create complexity. Unless there is something like show next, what you guys do is solve about 15 of those, correct? Who else are you going to talk to? That's actually going to execute on the outcome of the creation of the opportunity that you've made. They have to talk to each other. If you're not talking to each other, it becomes even more complex.
Speaker 2:Nick Scott, we've got to stop there. Where I do like to get sales information and referrals is also on this podcast. We always ask our current guest to recommend our next guest. Nick, who did you have in mind this?
Speaker 1:podcast, we always ask our current guest to recommend our next guest, nick. Who did he have in mind? Well, I think you know um a a guy I know his name is rick vanderbosch. He used to do these.
Speaker 2:He's a really smart guy by the way, I always say that appraisal moment I make sure I open up with Rick how smart you are.
Speaker 1:So you should probably think about bringing him back as the interviewee as opposed to the interviewer. But I can't, I can't, I can't go past. Yes, but from who's the CEO of Exclusive Networks? What he's doing in Exclusive Networks is a lot of what we're talking about democratizing that whole process and getting an end customer outcome at volume, because what we're trying to do is he's trying to integrate innovation velocity, deployment velocity, transaction velocity all at once. You should talk to him, man, because a lot of the stuff we're talking about he's actually executed on it.
Speaker 2:We've got a couple of the senior leaders from Exclusive coming on soon, so it'd be amazing to also get Jasper's input. Nick Scott, thank you so much for sharing your experience today. It's been awesome.
Speaker 1:No worries, Alex, Absolute pleasure man. Awesome talking to you.