What a difference a year makes!
As channel consultants, we get a feel for the health of the industry by the type of projects we are asked to work on. And over the last twelve months we’ve seen a real shift from tactical, short-term return projects, to strategic, longer-term projects designed around building strong sustainable foundations with partners.
Last year, while the industry and general economy were still in the doldrums, most vendors only looked three months ahead, and the majority of our projects were focussed on increasing sales in the coming quarter. Many vendors established teams that had direct end-user touch, with the goal of driving business directly but still fulfilling through the channel.
Today, we see a very different (and much more positive) outlook. Projects are once again becoming more strategic in nature. There is growing recognition that simply using the channel for fulfillment is not very efficient and does not build channel profitability or loyalty. More vendors are realising that investing to properly enable partners means that those partners will be more loyal, and will play an active role in uncovering and bringing sales (especially complex solution deals) to fruition quickly and cost effectively.
Consequently, we have seen investment in the following areas:
Better understanding of the channel
Vendors are once again initiating research projects to help them get a true understanding of what their partners genuinely think of them. They are using a third-party organisation such as ourselves to conduct an unbiased and objective review of their partners, as a means of determining how best to engage and enable their partners.
The results can help them determine what program elements to enhance and/or what elements to defocus on. In addition, they can determine how to redirect funds in areas which will have the most impact on partners (eg. training, lead generation, or logistics, etc)
10 years ago, anyone could be a good channel manager if they were friendly, had an expense account, and spent a lot of time visiting partners. Today, partners don’t want quantity; they want quality.
Consequently, vendors are investing in training for CAMs (Channel Account Managers) on how to manage their “patch” better. This means better sales analysis of trends, identifying gaps in market coverage, partner skills mapping, territory growth strategies, etc. The result is that CAMs (and their managers) can start to manage their territory based on sound business principles and measurement criteria, rather than gut feel.
In addition, this also means that when a CAM visits a partner, the Business Planning process is of value to both parties. In other words, QBRs (Quarterly Business Reviews) with partners should comprise more than reading through a sales report and discussing pipeline opportunities. An effective QBR should be designed to genuinely help the partner grow (Review of Action Items, Business Planning, Account Reviews, Building Competitive Advantage, Training and Enablement, Marketing and Lead Generation, Strategic Direction, etc)
Partners selling to vendors
Distributors have always known the importance of selling up the channel. (If they lose a customer it hurts, but if they lose a vendor, it might send them broke). But now, more and more partners are recognising that there are more benefits to be had from a solid vendor relationship than the short-term gains of working with everyone.
The result is that partners are engaging us directly to work out how best to engage with their vendors, and how to leverage those relationships to grow their business. And vendors are delighted with this. It is surprising how often we hear vendors complain that they have Marketing Development Funds set aside for partners who don’t do anything with it. By understanding the drivers and motivators of vendors, partners are building stronger ties to key vendors, and reaping rewards in the form of leads, account protection, and reduced costs.
I’ve often said that it’s not necessarily the quality of your ideas that will make a difference to your customers and colleagues, but rather how effectively you can communicate those ideas. Too often I meet brilliant people who are overlooked because of their ability to articulate an idea in a compelling manner, and sadly, too many “average” individuals who succeed because of their ability to embellish.
A recent increase in requests for Presentation Skills from both Vendors and Partners is an indication that the importance of this skill is being recognised again. Your customers form an image of your company by the calibre of the sales people they meet – don’t let poor communication skills create a negative impression of your business.
The difference between a perpetual license and a SaaS license is not the capabilities of the product, but rather the business model. As we move towards XaaS (where “X” = Software, Infrastructure, …, etc) the differentiator between sales people will be their business acumen, not their product knowledge.
As a result we are again seeing both vendors and savvy partners investing in developing the business skills of their people. Customers don’t want to see another rep – they want someone who genuinely understands their business issues, and can present a compelling business solution to address those issues.
That means understanding financial language, putting together business-based proposals, and translating technology into business benefits. If you can’t lift your language above the product features, you’ll always be relegated to the evaluators, and neglected by the decision-makers.
The market is certainly not back to the halcyon days of a few years ago. But the level of optimism has certainly increased (just ask any head-hunter how busy they’ve become lately).
However, the financial crisis did leave a legacy of cautiousness and added scrutiny from customers. So as you plan for the immediate quarter, make sure you set aside time to invest in activities that will build long-term, sustainable revenue and profit growth for the year ahead.