Avant's Ian Kieninger Dishes on Dangers of 'Share-Shifting'
"We continue to think about trusted advisors' best interests," Avant's CEO said. "We're not here trying to figure out how to squeeze more margin."
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Channel Futures: There was a big update to the Pathfinder [pre-sales engagement tool] earlier this year. What is the state of that platform right now?
Avant’s Ian Kieninger: Pathfinder is something my partner Drew [Lydecker] and the rest of the company and I are super proud of. We believe it’s extremely unique. It’s the industry’s only pre-sales weapon that can be used in the field with customers and the back office. We continue to invest heavily in Pathfinder because it’s a big differentiator. We keep hearing from trusted advisors that no one has anything close to what Pathfinder does for them.
I tell this story a lot, so it might be redundant. Still, the genesis of this whole idea was to put on the Iron Man helmet, turn on Jarvis, and have someone help you walk through a sales conversation in the most intelligent, most unique way with your end customer. I don’t think anybody’s taken the approach of building technology that helps you close business in the field. Many people have built incredible portals, and we’re the anti-portal. It’s a place where you live and compete every day but also where you can go and get things done. This is our third rendition of the Pathfinder.
We’ve had so much success with the Pathfinder that people keep asking us to push the boundaries and implement new, amazing disruptive ideas. So, we retooled the platform, allowing us to move a lot faster, be way more innovative, and implement ideas in a matter of months, not quarters or years. We’re calling it Pathfinder 2. It gives our users a lot of additional features and functionalities. And we’ve got some exciting new applications we’re adding. All the previous applications everybody loves within Pathfinder will be there. They’ll run faster. They’ll be more intuitive. The term I used is, we’re “Spotifying” it, where you can go in there and naturally understand how to use it, versus having to be taught. And then these new applications will be more groundbreaking concepts, which I’m going to hold on to and surprise you with this fall, that no one else has ever done before. We’re on a new platform with a new, always learning tech team. We’ve upgraded in the last two years and can take things to market faster. Our belief is that we’ve got to create even more efficiency and scalability in this channel to be both successful for the vendors and the technology advisors (TAs). Technology is going to be a huge part of that equation.
CF: When I talked to [Telarus CEO] Adam Edwards about their tool, they saw it a kind of symbiosis between automating more things with software and being more efficient with their engineers. As you’re expanding your actual human support, I’m wondering if there’s any relationship you see between that and Pathfinder?
IK: Yeah, there’s a definite relationship between multiple facets. As things become more transactional, they need to be more efficient, right? Trusted advisors need to be able to sell something without the need of scheduling and bringing in an engineer to close the deal out. You need to be able to process that, get information, price quote and configure. Part of this is creating scale for everybody, leaving the room at the top where you can configure, engage and do complex deals, but we also know that having real people engaged in conversations is always an advantage. When you combine super-talented sales engineers (and we believe we’ve got the best – we’re paying top dollar and training them like crazy) and you marry them with a technology approach, you are unstoppable.
We will continue to invest in smart people who can guide a conversation with a trusted advisor, teach them new things, get in front of an end user with a trusted advisor, and help move a sales process along. Sometimes those conversations involve no technology and sometimes they lead with a technology tool.
Either way, [with Pathfinder], you have more options than you’ve ever had in the past when you’re facing tough end-user customers. And one solution doesn’t solve all. Like the Geico commercial, sometimes you want tech, and sometimes you want people, and more often, you want the best of both. We’re going to provide options for everybody. And we’re going to invest heavily in both. Because when you marry them both and balance that, you have a strong equation that helps our trusted advisors open more doors and close more business.
CF: I was looking at [an Avant] partner’s website and saw that they had embedded Pathfinder into one of their pages. I’m curious about the conversation with partners around, “Hey, why don’t you make these tool sets an even more core part of your branding?”
IK: That’s a great question. That’s exactly what we want to see happen. We have an interesting lens where we see hundreds, if not thousands, of TAs and how they go to market. And we pull the best practices together and advise our community on how to really engage the client and be different from their competition.
We see more TAs adopt our toolset (Pathfinder) within their approaches. And the ones that do that are outselling everyone else. We stack rank them. Everyone has a special sauce, but when you add some of our special sauce to theirs, you make a really great meal – something you can’t find anywhere else.
The challenge is that people are already successful in how they do things. And so, we come in and say, “What if we can make you more successful? What if we can help you grow even faster, more effectively, and more efficiently? Look at Avant, use Pathfinder and see how to work together to build more value.
Instead of sitting across from a CIO or IT decision-maker and saying, “Hey, let me help you make a buying decision – I’m your consultant” [pitch]. Now with Pathfinder, these trusted advisors can layer in something unique and even sexy. We think the Pathfinder shows so well. It gives them a visualization of what is possible in a way that no one else has seen before. You stand out. And even if it’s just a talking piece at times, it makes you different from everybody else.
We’ve seen four or five-man shops come in after Accenture has brought in a 10-man team and outshine them and win when they combine their special sauce with ours. And the toolset goes beyond the Pathfinder itself into all the analytics (Avant Analytics) and market research we’re providing.
What also makes us really unique is that we’re constantly thinking, “How does the TA stand out? How do they get that CIO interested in a multimillion-dollar decision when you’re potentially a smaller shop? When you layer data and analytics, they can’t find anywhere else – only through you via an Avant relationship – we think it makes you different. And it adds more justification to the buying decisions they’re making. So ultimately, if we can help our TAs help the CIO go to the board armed with more information to backstop their decision, we think everybody wins, including the client. We think Avant tools and resources are a key reason why Avant’s TAs have already sold into one out of five billion-dollar U.S. companies!
CF: I was talking to a partner the other day who said they like Pathfinder the best and used it on a recent deal but linked the deal to someone other than Avant. What must be done to get the partner to link the value of that tool to the relationship with Avant?
IK: That’s a really good challenge and a question for us. You can’t just win on tech alone. We must surround the TA with great programs, a great portfolio, competitive commission rates, and resources like engineering, pricing, deal reg, and commission dispute management. Maybe the partner needs to understand all the other things we’re bringing to the table to them, and they’ve only experienced one. It’s on us to win the partner over and have them invest back into us by placing that order with us so we can continue to reinvest those dollars into more value-add to grow their businesses.
It’s a behavior we’d like to change, and it’s on us to convince them to do so. It’s about communicating and building that trusted relationship. Technology alone is not going to get it done. That’s one of our challenges: to do better product marketing to pull through that loyalty, which is happening. It’s happening quickly, and we’re getting the rewards and focusing our energy on the TAs who really want to grow and build relationships, the ones that lean in with Avant, and together we see them grow even faster.
CF: As Avant is making these big investments in people and platforms – and I would say your peer Telarus is also doing that – do you see more and more differences emerging between the TSDs? Are they going to look even more different, and if so, how are they going to look more different?
IK: When you ask TAs who work with us and the vendors about Avant, they’re going to tell you already today, we’re extremely different. Sometimes, differences emerge from minor variations that build up gradually through personal experiences and interactions.
With our acquisition of PlanetOne last year, we’ve become a category of one within our space – where we’re the only one offering the best pre-sales enablement, both tech resources and go-to-market strategy. Now we have the best back-office resources where we can tie that thread from the front end – the initial engagement, adding value in the initial engagement – to the very back end where we solved for 700 proactive condition disputes on behalf of our TAs without the TA even knowing we have done this for them. We have this incredible backbone of value that’s tied together, and I don’t think anybody’s doing it at that level.
When we look at the future, we need to continue to differentiate it in four areas. One area is data and analytics and research. We need to understand the next problem that, as a community, we need to solve. We need to understand what information the buyer is looking for and provide information that they can only get from us. And we need to help these TAs that are getting more mature make better bets internally. Like, how do you prove the ROI on their next hire or investment? And all that is done through sophisticated analytics. We have an incredible data team that I don’t think anybody else has that is just mining data, creating outputs that people can use as value in the space, as they’re trying to run their businesses, which is really cool.
IK: The second is technology. Like I said earlier, the people who win this game, in the end, are going to win with a technology-led approach. Well, I can’t discount relationships – I never will – we’ve got to continue to be disruptive. So how do we do that? That’s done through technology investments, so we don’t see bigger players with bigger wallets enter our space and disrupt us as TAs. Part of my job is to keep this community ahead of everybody else and create scale and operational efficiencies, both with us but also, very importantly, with the vendors. We’re going to help them go to market easier. And with the TAs, they can run their businesses more smoothly and be more aggressive in getting new business.
IK: The third is next-generation customer care. As a community, we need to figure out how we care for these accounts. We’re going to see a massive amount of renewal business in the next three years post-COVID-bump in spaces like UCaaS and others. And are we doing a really great job of renewing that business or cross-selling and upselling? I think we’re OK as an industry. There’s a lot of room there to grow. So how do we, as a TSD, provide resources or techs to help our TAs improve retention rates and find a new business within their current accounts?
IK: And then lastly is the strategic partnership notion where we must rely on other people’s resources, and I’m asking our TAs to rely on ours. You build your business. You don’t need to build the things we build. Utilize them. Get your money’s worth. Lean in. The further they lean in with us and the more they really understand who we are past the surface level – you get past the blue blinky lights, and you get to the core of what we’re doing – we see a ton of loyalty. We see a massive amount of growth in those partners. Those four areas are what’s going to continue to help us be different and continue to disrupt this channel space so we have another [set of] many, many years of success together.
CF: As you were talking about building a moat against threats to the industry, my mind shifted to Pax8’s marketplace and many of the conversations that are going on around marketplaces. I’m curious of the conversations you’re having around that?
IK: Part of my job here, both within Avant and the industry, is to continue to think about those topics and to dedicate my time to seeing around the corner to protect our trusted advisors’ business, the future of what they’re trying to do both personally and professionally, as they have made so much investment into their lives around trying to build this space. We always have an open mind and are inquisitive about what these threats could look like. Could AWS or Google want to enter this space? What would that look like?
It goes back to my original opinion – we need to continue to focus on technology and the technology that helps you, the TA, have better customer engagement. Again, you can recreate portals and platforms, and marketplaces. Buy, spend it, whatever. But you cannot recreate customer relationships and glue them together.
We always focus on the customer and that component, and bring things like really cool Pathfinder concepts and applications And the next series will blow your mind with things like research and data they can’t get anywhere else. You can’t get around us. You can’t go somewhere else and automate that stuff.
IK: We’re also pushing this whole community up-market to the midmarket to enterprise because that’s where we really should be living. Small businesses can be serviced in a lot of different ways. We’re seeing more of our TAs at double-digit growth every year, selling to billion-dollar end customers. Every year I come back to it in my keynote at Special Forces Summit, and I see another 10% of our TAs have now sold to an end user that is a billion dollars or bigger, and that’s really encouraging. As we live in that complex space, we can bring in new providers overnight. We can bring in new technology practices overnight to some degree, right? We’re in a really cool sticky situation that is hard to disrupt by just purely throwing money at it. Because we’re going to be ingrained. And we know what we do — it’s the dark art of sales. So how do we scale the dark art a bit to capture more share here?
CF: I’m wondering how many how many TSDs are really focused on reaching the enterprise and if there will emerge more TSDs that are just focused on a lot of smaller customers.
IK: We cut our teeth on focusing on only midmarket and enterprise end customers right out of the gate. What we didn’t build was a high transaction platform for small businesses. Small business is a really challenging area in this space that has a lot of churn that can be just as needy as an enterprise account. You can die in small business and never really scale your own business if you’re not careful. Plus, we are passionate about bringing tough technology conversations to the table and helping TAs close them. That gets us fired up every day. And I think that’s where the maximum amount of money and margin is made for all of us. In fact, our largest penetration of customers is in the billion-dollar-and-above segment, where we are 22% penetrated. Twenty-two percent! And there are hundreds of different Avant TAs that have successfully sold into that segment. Avant resources give many of our TAs the confidence to approach these large companies.
IK: We built this business first and foremost to attack the enterprise space. We recognize that sometimes the small business and transactional deals are important, so we have automated pricing tools in Pathfinder, and we have lots of different applications and value-adds to make a streamlined process happen. Because sometimes you need a price, and you’re going to bang it out and close it in one call, and you’ve got to move on. And then you [say], “Who’s going to service that account and those 25 people later because no one pays attention to it.” Those are challenges that happen in the small business ranks.
Avant is continuing to push people up market. We think that’s where there’s a lot of confusion. Those chunky deals that are $25,000-$50,000. Boy, are they nice, and attrition’s much lower when you do that good job. Everybody else is trying to level up too. They’re seeing that the small business T1 stuff from back in the day doesn’t work anymore. It’s not enough value, and you can’t really build your trusted-advisor practice around it.
What’s also happening is that the vendors are allowing us to go up market, where maybe some of that was quarantined off in the past. But now we have better relationships, better conversations with these customers. Think about contact center. I have some incredible trusted advisors who have a better conversation and are more knowledgeable about the space than the vendors themselves. The vendors bring these guys into deals to help them close stuff out. That’s sophistication. This space is getting more sophisticated, and those TAs are going to win.
For those not trying to push themselves to add more value, then maybe lifestyle is cool for now, but at some point, there’s a runoff on that business. The base does experience attrition. It’s hard to retain when other people are investing. And that’s why we’re saying, “Lean in with us. We’ve made the investments. You could do this tomorrow if you’re open to thinking a bit bigger.”
CF: ScanSource, in their last earnings call, told investors there’s pressure on margins from needing to raise commission pass-through. What are your thoughts on that?
IK: With increased scale, consolidation and maturity in any segment, there’s always some commoditization and price compression. And that’s a healthy thing in some senses. What’s not healthy is share-shift.
I have a very specific opinion on this. The lifeline to our success in the future is creating and growing market share for the vendors. If our community of TSDs is not doing that, and we’re just share-shifting between each other, the vendors are going to run out of patience. That’s not what they want. They want us to grow the pie, not just chase the pie between each other.
It’s frustrating when we see that happening. I have two ways to help the vendor community succeed and keep investing in high commission rates and evergreen clauses and SPIFFs, which everybody wants, right? It’s a) I find the next greatest trusted advisor who enters the space, and we enable them to be successful; but b) and more importantly, we invest in the TAs that are there today that want to grow, and they want to take more share. If we do that well, the whole channel community will be healthy. If we’re bickering over the same accounts, and I’m investing, and someone else is not, I worry about what that future looks like, and the vendors ultimately dictate what this whole thing will be. I want to make sure they’re pretty happy because I am supposed to protect everyone’s revenue. If we can go out there and help everyone else sell more – then boom – we win because we’re in the middle of it all. And that’s what we love to do.
CF: [Comcast Business/Masergy channel leader] Craig Schlagbaum has been pretty outspoken about the share-shift. And he and his vendor peers aren’t just saying this to the TSD community but also to the partner roll-ups. He needs new end customers, not just cross-selling into existing customer bases. My mind goes to Doug Cardozo and Guhan Raghu of 3DG Partners [who recently sold a big retail deal with Avant and Comcast Business/Masergy]. Was there a secret sauce to landing Doug and Guhan?
IK: It’s a perfect example of creating new market share and a perfect example where Craig is really happy because he got a brand-new logo that’s giant. And it’s a perfect example where we predicted that the channel would sell $3 million, $5 million MRC deals, and it’s coming to life.
There’s no secret sauce or algorithm around how we engaged with Doug and Guhan and got them to work with us. It was identifying what they wanted in terms of value-add and then engaging and working really hard. Because you can imagine everybody else wants that business, and they’re going to throw crazy rates at it because they want the volume, and when you’re chasing volume without the value, that’s also a scary thing. We brought value. We spent a lot of time. I know my partner personally spent a ton of his time on phone calls. That’s what we do.
It’s about getting engaged. [3DG Partners] got a lot out of us. They really got a ton of our effort and our resources. And we built a really good, great relationship. And we’re having better conversations. Like, how do they scale and build their businesses? How do they avoid the next mistake, or how do they make the next best decision? And when you’re with a partner talking about business strategy, you know you’re at the right place. You’re no longer talking about the SPIFFs or complaining about the vendors. You’re saying, “Who’s the next guy I should hire? Where and how fast can I do it? How do I grow?” That’s cool. That’s the perfect profile for Avant — people who want to lean in and grow by 50%, not someone who wants another half point on something. Think about the math on that. It’s significantly bigger, much bigger if you’re actually growing your businesses, and that fires us up.
CF: You were talking about expanding the market for these vendors. You’re also working to expand the technology portfolio that partners can sell. At Special Forces last year, we talked about cybersecurity and how this space is trying to establish a deep footprint there. Partners are looking to try cybersecurity, but the table stakes for them have the vendors to sell. I’m wondering what next frontiers you’re thinking about technologically. It’s going to bleed into the inevitable AI question, but what are you thinking about next?
IK: The two big focus areas at this moment and into the future are contact center and security. I’ll take one step back. The most perfect case study of what a TSD should be doing and how people should understand how much energy, effort and money it takes to bring a whole new technology segment to market, which we’re attempting to do with security.
It’s literally going from almost 0% penetration and participation, and we’re going to get everybody selling it like they sold frame relay. Easy, and everybody can do it. That encompasses thousands of conversations, meetings, flights to vendors, and trying to curate a fragmented vendor ecosystem. There are 7,000 security companies I can identify going to the RSA conference. Who’s going to participate, who’s going to win, who wants to support a channel program, who wants to pay 20-plus percent residual with evergreen? Think of that the amount of work that goes into doing that. Then part two is, how do we train and educate the entire channel who hasn’t done this before? By the way, it’s a very scary conversation you don’t want to screw up. Then, how do you enable them through technology and tools, and how do you use things like Pathfinder to make their job easy?
It’s really the art of taking full technology practice. We did it with UCaaS originally. We did a really good job. And with managed cloud hosting, we were the first to bring that onto the scene at a TSD level. So we understand how to do it. Right now, we’re kicking that off. We started last year. The resources to do this are expensive. It’s hard to find cyber guys. We just hired Stephen [Semmelroth] and Ivan [Paynter], two of the best in the business helping people have great conversations with their clients.
I think the security run, we’re not even at first base. We’ve got multiple years and hundreds of billions of dollars out there in front of us to go chase. We really don’t need anything to focus on past that at the moment because we’re just starting there. But we’re also on the top of the hype curve with contact center. We’re seeing contact center start to move fast. Yes, there’s a little more comfort level around contact center because it’s a step past UCaaS, which everybody knows how to sell now. It’s a little more complex conversation, but we’re seeing a mature provider portfolio. It’s well-matured now. We have lots of options. They’re paying healthy commissions. They’re investing in the channel. This is based on the hard work the TSDs have put into it. And we’ve built tools and resources. I’ve got five contact center experts who are out there every day, training and doing deals. I think contact center will take us through the next couple of years.
IK: Attached to contact center, and within it, I’ll give you your AI answer. It’s there. AI is plugging into the solutions we’re selling. It’s indirectly a product we sell, as contact center becomes BPO and continues that evolution. We’ve got a lot of legs there.
Right behind that, the next wave is security. Within security, we’ll see AI and RPA. I think we need to be able to speak to those things. I was talking to Eric Ludwig from Rise Technology Advisors. He opens doors with cool AI conversations and uses that to go hunt contact center, security, or pull through something else. So being educated on the space gives you an advantage. But where are we going to monetize? The big growth areas will be everything we’re doing today. It’s not going away. I think we all need to think about how we do better in contact center and security. Avant will bring the research, support, resources and tools to make that as easy as humanly possible, and we will continue finding great vendors. We’re still lacking some to round out that portfolio where their batting averages are like .600 or .700, not .400 or .500. We’re excited about that. That’s where everybody’s heading to, and we’re going to try to be two years ahead of everyone – like we normally are – at bringing these practices to market.
CF: Is there anything you’d like to say to the partners reading this?
IK: The TSDs, including Avant, are working really hard to both advocate for the vendors and convince them to continue to invest in this community and continue to expand the portfolio. We’ve advocated on behalf of trusted advisors every single day. We continue to think about trusted advisors’ best interests. We’re not here trying to figure out how to squeeze more margin. We’re trying to figure out how to run to help you grow faster. Period. And Avant’s DNA comes from sales guys — me and Drew. So, we’re always thinking, “If we’re in their shoes, what do we want to win? How does a TSD help me do things I don’t want to invest in or know how to do?” That’s our mindset every single day.
The last thing we’re doing differently (and super excited and proud of) is evangelizing on behalf of the trusted advisor community in a macro sense. It’s hard to tie it to a dollar, to be honest. We were lucky enough to get that Profile magazine article. I’ve gotten [a positive] response from my quote, “If you haven’t heard about a trusted advisor, it’s time for you to learn,” because that is me telling the CIOs, the magazine’s readers, to go find a trusted advisor.
The CIO might go to an agent I don’t work with and reward my peer – OK. At the end of the day, this market share is so big that I’m going to continue to advocate for the trusted advisor. I want it to be a household name. That just means more buying behavior through our channel. Everyone’s successful. It’s something we call our enterprise awareness approach, where we’re making the enterprise more aware of the trusted advisor. It’s all about them.
CF: Is there anything you’d like to say to the partners reading this?
IK: The TSDs, including Avant, are working really hard to both advocate for the vendors and convince them to continue to invest in this community and continue to expand the portfolio. We’ve advocated on behalf of trusted advisors every single day. We continue to think about trusted advisors’ best interests. We’re not here trying to figure out how to squeeze more margin. We’re trying to figure out how to run to help you grow faster. Period. And Avant’s DNA comes from sales guys — me and Drew. So, we’re always thinking, “If we’re in their shoes, what do we want to win? How does a TSD help me do things I don’t want to invest in or know how to do?” That’s our mindset every single day.
The last thing we’re doing differently (and super excited and proud of) is evangelizing on behalf of the trusted advisor community in a macro sense. It’s hard to tie it to a dollar, to be honest. We were lucky enough to get that Profile magazine article. I’ve gotten [a positive] response from my quote, “If you haven’t heard about a trusted advisor, it’s time for you to learn,” because that is me telling the CIOs, the magazine’s readers, to go find a trusted advisor.
The CIO might go to an agent I don’t work with and reward my peer – OK. At the end of the day, this market share is so big that I’m going to continue to advocate for the trusted advisor. I want it to be a household name. That just means more buying behavior through our channel. Everyone’s successful. It’s something we call our enterprise awareness approach, where we’re making the enterprise more aware of the trusted advisor. It’s all about them.
The technology services distributor (TSD) community must look outside its own ranks to bring in new partners and end customers if it wants to stay relevant, Avant CEO Ian Kieninger told Channel Futures.
Kieninger, who co-founded the Chicago-based firm 2009, addressed a share of hot button topics in a new interview with Channel Futures..
One such topic surrounded pressure many TSDs face to increase the amount of commission dollars they pass through to their sales partners from vendors. Kieninger told Channel Futures that while price compression will naturally happen to some extent in any consolidating and maturing industry, he warned of “share-shifting” that could hold back the industry.
Avant’s Ian Kieninger
“The lifeline to our success in the future is creating and growing market share for the vendors,” Kieninger told Channel Futures. “If our community of TSDs is not doing that, and we’re just share-shifting between each other, the vendors are going to run out of patience. That’s not what they want. They want us to grow the pie, not just chase the pie between each other.”
Avant and its peers sit between technology suppliers and technology advisors, whom Avant refers to as “trusted advisors.” It negotiates and holds contracts with those vendors and assists its agent partners with training and sales resources to reach end customers. Those resources include its Pathfinder pre-sales engagement tool, which Avant plans to expand a fourth time later this year.
Kieninger fielded questions from Channel Futures about the future of TSDs and their resources, the issue of channel share-shift and the future of Avant’s technology portfolio. His interview comes a few weeks after Telarus CEO Adam Edwards sat down with Channel Futures to discuss many of the same questions.
Ian Kieninger: Avant’s Focus — Contact Center, Security
Regarding technology, Kieninger said Avant is putting its biggest focus on contact center and security. And artificial intelligence for the time being will function as a capability integrated into those aforementioned offerings.
“AI is plugging into the solutions we’re selling. It’s indirectly a product we sell, as contact center becomes BPO and continues that evolution. We’ve got a lot of legs there,” said Kieninger, who said Avant is keeping a focus on where its partners can actually monetize AI.
To read the full transcript of Ian Kieninger’s interview with Channel Futures, see the 16 images above.
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