In-Depth

Seeking Satisfaction

Since arriving in Redmond, Kevin Turner has focused on filling Microsoft's gap in data on how satisfied customers are with partners. Expect the company to step up its 'C-Sat' measurement efforts this year.

One of the first things Kevin Turner noticed when he joined Microsoft two years ago was that the company lacked comprehensive data on how satisfied customers are with their Microsoft partners.

The new chief operating officer's interest in "C-Sat," as Microsoft calls it, has spurred a flurry of activity in the last year among Microsoft partner executives.

For many partners, Turner's intensive focus on C-Sat surfaced at the Microsoft Worldwide Partner Conference (WPC) in Denver this July, when he used his keynote to highlight the importance of customer satisfaction.

"We have to make sure that taking care of our customers is a personal obsession," Turner said, referring to both partners and Microsoft. "You know, I think we can improve in this area. That's why it's at the top of the list. We're not going to let our competition outrun, outthink or out-hustle us as it relates to taking care of customers."

A Mover and Shaker Arrives at Microsoft
Turner arrived at Microsoft in September 2005 after a 19-year career at Wal-Mart Stores Inc., where he'd most recently been president and chief executive of Sam's Club, Wal-Mart's warehouse club. He started with Wal-Mart as a cashier working his way through college in Oklahoma, and his Wal-Mart career included 13 years in the IT department, ending with a stint as CIO.

Photo: Brian Smale
"We have to make sure that taking care of our customers is a personal obsession." Kevin Turner,
COO, Microsoft

Turner is a feisty executive, whose speeches include Ballmeresque exhortations to "sell, sell, sell" and warnings against letting competitors "eat our lunch." He's one of the eight executives, including Bill Gates and Steve Ballmer, on Microsoft's Senior Leadership Team. As COO, he's responsible for strategic and operational oversight of Microsoft's worldwide sales, marketing and services organization.

Within nine months of his arrival, Turner had consolidated most of Microsoft's partner channel under his authority with the shift of the Small and Midmarket Solutions & Partners (SMS&P) division, which includes the Worldwide Partner Group, from Microsoft Business Solutions into Turner's operations group.

Turner quickly grasped partners' key role in serving as Microsoft's real sales force. Based on comments Turner has made in his speeches, having both Ballmer and Gates take him aside and emphasize the importance of the partner model to the company might well have influenced that particular breakthrough.

With his focus on external feedback and metrics, Turner fit right in at Microsoft. One result of that focus: a new internal partner scorecard for measuring the performance of Microsoft general managers at the subsidiary level, which is being implemented this year.

"He's been a tremendous advocate for the Microsoft Partner Program, and for the first time ever we have a partner scorecard across Microsoft," Marie Huwe, Microsoft general manager of partner marketing, says of Turner. "[It's] something that we'll be holding all the general managers around the world accountable to that will cross all of their different organizations within the subsidiary."

Turner made a symbolic demonstration of his commitment to partner feedback during his closing keynote at the 2007 partner conference when he set a number of binders full of partners' conference evaluation forms at his feet on the stage. The display suggested that, on Turner's watch, Microsoft will take partner feedback very seriously.

Kevin Turner-isms

There are few things as entertaining at a Microsoft Worldwide Partner Conference as a Kevin Turner keynote. With his down-home drawl and earnest delivery, Turner delivers zinger after zinger, both amusing and enlightening. Here are a few gems from this July's partner conference:

"Sell, sell, sell in the marketplace.... We do a lot of great things for the world, but we're not a 501(c) nonprofit organization. We're here to sell stuff."

"I gave Simon Witts and our team an aspirational goal this next year of taking out 4 million IBM Lotus Notes seats by winning the customers."

"We found in some of our subsidiaries that the [Partner Account Manager] role was kind of optional. Well, we moved that from kind of guidance to direction. It's not optional anymore."

On a promise he made a year ago to provide clear product roadmaps to partners: "We've still got a long way to go. This was a hard exercise for us. … I'd give us a C on this particular commitment."

Of the Windows Server 2008, SQL Server 2008 and Visual Studio 2008 launch: "It's a feeding frenzy of opportunity.... There's hundreds of billions of dollars available to you through the partner ecosystem and monetization for these products."

"We put over $20 billion of prior year's R&D spend into the marketplace in the last Fiscal Year '07, unprecedented in the history of Microsoft.... I see one thing in FY '08 -- I see money. I see monetization. I can smell it and hear it, see it, OK, because this is the year that we're going to monetize that innovation."

The Missing Leg
In his initial reviews of the Microsoft Partner Program (MSPP), Turner quickly and consistently seized on a missing third "leg" of satisfaction metrics in Microsoft's data, according to Microsoft partner executives.

"One of the very first things he said is, ‘OK, I can see our research shows us how satisfied the partners are with Microsoft, and I can see research that shows us how satisfied the customers are with Microsoft, but I can't see anything that shows how satisfied the customers are with the partners of Microsoft,'" says Todd Weatherby, general manager of SMS&P product management. "[That's] the third leg of the triangle."

Partner executives showed Turner data from an existing voluntary program in which about 2,000 partners provide customer satisfaction data to Microsoft. But Turner wasn't satisfied with having C-Sat data on just 2,000 partners out of Microsoft's 400,000 MSPP members and its estimated 600,000 total partners worldwide.

Practically the only tangible metrics of customer satisfaction with partners are the case studies required to attain higher levels in the program. Case studies, as time-consuming and challenging as they are for partners to develop, actually tell Microsoft and customers very little about overall customer satisfaction with a partner. In fact, Microsoft's documentation pointedly warns customers that the software giant can't stand behind its partners' case studies.

The Microsoft Solution Finder Web site notes: "All customer references are self-reported by the partner who owns the solution and electronically verified by each customer. Microsoft does not validate or guarantee these references, and disclaims any and all liability associated with such customer references. Verification of customer references should be done directly with the owner of the solution."

Even with the motivation of an energetic COO, making changes in an organization of Microsoft's size takes time. The Microsoft partner executives who spoke with Redmond Channel Partner are particularly aware of the sensitivity of this data both in terms of privacy issues and competitive concerns. "We want the feedback in a generic way, but we want to understand how their customers are feeling about partners," says Julie Bennani, who became the MSPP's general manager in May. "The C-Sat capability doesn't target specific partners, so it's not information they would be concerned about in that sense, but from an aggregate perspective it gives us a view into how customers are feeling about the partners that are working on our behalf."

New System, New Mindset
Microsoft's technology infrastructure for partners, already undergoing an overhaul, is being updated to better collect C-Sat information.

Microsoft's existing customer satisfaction tool, in use by about 2,000 partners, is a model for how Microsoft could collect data on more partners in the future. As it stands, partners send their customer lists to a third-party satisfaction-survey vendor, which is paid by Microsoft to handle the job. The vendor does the survey, returning the results to the partner and an aggregate score to Microsoft.

"We don't look at [a partner's] Customer No. 3 and see what his satisfaction is, but we look at what their C-Sat score is overall for that batch of customers," Weatherby says. "And then we can actually look at which partners have better customer satisfaction overall, and we actually give them Partner Points for that."

Microsoft is also updating the MSPP to include a "Partner Dashboard," and, eventually, a "Partner Scorecard," an entirely different evaluation method than the one on which Microsoft subsidiary general managers and PAMs will be judged. Clearly, the company is looking for ways to incorporate customer satisfaction data as well as giving partners incentives to gather and provide the information.

Putting Partners in the Driver's Seat

Microsoft is working on a new "Partner Dashboard" intended to give partners better visibility into their business opportunities.

According to Todd Weatherby, general manager of SMS&P product management, the forthcoming tool on the Microsoft Partner Portal will build on the work done over the last few years to improve partner profitability.

In concept, the dashboard will provide a consolidated view of what a partner gets from Microsoft.

Front-and-center will be information about closing more sales. Partners will see answers to questions such as: "‘How many sales opportunities have you sent to me, how many have I shared with you, what's our win rate, what's the target?' And then, 'How many pre-sales technical support resources do I use to get that?'" Weatherby says. Those sections will be linked to Channel Builder and Solution Finder entries and forms.

Also prominently featured will be a section that focuses on expanding a partner's skills, noting, for instance, whether the company has ironed out a business plan with Microsoft, what competencies it's earned and what training it's completed.

Microsoft also plans to reveal Partner Learning Center data, such as the training classes and resources employees have used, along with statistics about the number of certified professionals, customer references and employees in the partner program.

"Something we get a lot is, 'Well, I'm a 1,000-person company and I don't even know how many of my employees use any of your resources.' So now we can go to them and say, 'You're a 1,000-person company; you only have 54 people enrolled in here. We can probably together get you more online training to more of those people,'" Weatherby says.

Microsoft took the tool to a Partner Advisory Council in early 2007 and came away with feedback that changed the emphasis from training and program levels to sales and leads data, Weatherby notes. The next step was taking a beta to the Worldwide Partner Conference (WPC) in July.

The company will roll out the tool to a subset of Certified and Gold Certified Partners this quarter and hopes to have the tool available to all managed partners in January.

The dashboard is a step toward a more dynamic Partner Scorecard, planned for introduction further down the road.

"This isn't a scorecard yet," Weatherby says. "We're calling it a dashboard because a dashboard gives you stats about how your engine is running, but you don't necessarily get a full view of the whole race."

When rolled out, the scorecard will compare partners to their best counterparts in a particular competency or business segment, providing them with averages and targets to meet.

Chief Operating Officer Kevin Turner plugged the scorecard at the WPC in Denver: "On our portal, we're going to make available to you what the best-of-class partners within your partner type are doing, and how you benchmark yourself against the very best," Turner said. "So we're going to have that visibility for you to help you hit the profitability, to help you hit the metric."

It won't just be partners scrutinizing the scorecards. With a $2 billion-a-year investment in its channel, Microsoft wants to get the most bang for its buck.

"We spend a lot of money in our channel, and we think we can spend it better with our stronger partners. And so we're heading toward a model in the MSPP where we want to be able to see who the best-performing partners are, and then reward those best-performing partners more," Weatherby says. "This is a toe in the water on that one." -- S.B.

In addition, Turner is trying to instill an ethic of customer satisfaction into both Microsoft's partner organization and into Microsoft's channel.

"You call on a fair number of our customers on our behalf," Turner told partners in his WPC keynote. "We're asking you to adopt that and take customer service and customer satisfaction with us to the next level, and tell us if you need help."

How serious is Turner about customer satisfaction? He flashed his e-mail address and his phone number on the screen for several thousand partners to copy down, telling them: "If there's something in the way of you taking care of a customer and treating them the way they should be treated, I want to know about it."

Winners and Losers in C-Sat
There are a number of obvious benefits for Microsoft in getting more information from its partners about just how satisfied their customers are. The company spends $2 billion a year on its partners by investing in programs, resources, marketing and MSPP personnel, among other things. Combining customer satisfaction data with sales and other information could help the company make smarter investments with its strongest partners, and reward those partners who are improving Microsoft's image in the market rather than undermining it by providing bad service or weak supplemental products. In addition to making investments in strong partners, even aggregate information on customer satisfaction with partners could give Microsoft more concrete information when it comes time to recommend specific partners for customer opportunities. At a higher level, the mere existence of the C-Sat drive could help Microsoft improve customer satisfaction in the Microsoft ecosystem overall by publicly identifying customer satisfaction as a top priority.

But collecting customer-satisfaction data creates substantial risks for Microsoft as well. Problems with the way C-Sat collection is executed could create an acrimonious relationship with partners, similar to the relations between some auto manufacturers and their car dealerships, which must scramble to maintain five-star service ratings or face the loss of marketing dollars and other benefits. The company could also run into messy enforcement and administration headaches as some of its 400,000 program members learn ways to game the system to improve their C-Sat scores. In addition, Microsoft could damage itself and its channel if a major security breach exposed customer data or accidentally gave partners access to other partners' aggregate C-Sat scores.

Some partners would benefit from a rigorous C-Sat system. For low-profile partners with satisfied customers, a C-Sat score proving their worth could be a major boost, leading to increased recognition and leads from the Microsoft field. A well-run system could help further level the playing field, taking the MSPP further from a "who-you-know" network toward a metric-driven meritocracy. All partners would also benefit if the drive serves its intended purpose of creating a rising tide of customer satisfaction throughout the industry.

A poorly executed program wouldn't just create headaches for Microsoft. If the effort resulted in more paperwork or required constant pleading with customers to fill out surveys with positive feedback, it could sour customer relationships and add to partners' administrative expenses. Partners with weak customer satisfaction would, of course, lose even in a well-run system, which wouldn't be a bad thing. However, the system would have to be built fairly to account for some channels in which satisfaction is tougher to obtain -- for instance, a retailer can never hope to achieve the satisfaction levels of a solution provider who acts as a trusted advisor.

The one group that would win in any case from an emphasis on customer satisfaction is, of course, customers. As Turner noted of his initiative in an e-mail interview with RCP: "I'm proud of the way that we're stepping up and taking care of our customers. We're here to serve customers and create value."

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