Relationships: Currency of the Channel

Channel account managers can help solution providers unlock the potential of their end-user relationships

By Diana L. Mirakaj

Channel partners are force multipliers. They help vendors cover more territory and accounts, and reach into niche geographic and vertical markets. They provide the feet on the street that vendors don’t have the resources to develop, deploy, or support. And, best of all, they get sales results: Of every 10 technology dollars, 4 flow through the channel. Another way of looking at that: 35 percent of product sales go through solution providers.

Since we’re providing alternative views, channel partners are really customers by another name. Vendors sell products to and through them to end users. As products flow through the channel, dollars change hands at each transaction point, so resellers and integrators typically get a piece of every sale they make.

As tempting as it may be to call channel partners “middlemen,” it’s far too simplistic a view. More than just pass-through sales entities, like retail stores or catalogs, channel partners tap into long-standing relationships with IT consumers that rely on third parties to guide their purchasing decisions. Those relationships are critical to the value chain. Vendors that leverage the channel are doing more than just partnering with resellers; they’re establishing affiliations with influencers that build and maintain value-generating accounts.

Through these affiliations, vendors tap into sales-ready pools of customers that trust resellers’ knowledge, experience, and guidance. In other words, these are end users that may be ready and willing to buy.

So if one of the most valuable things a partner brings to the table is its customer relationships, why aren’t some of them doing more to leverage those alliances? It’s a question posed by many a vendor.

In some cases, those relationships form the core equity of a partner’s business, so there’s reluctance to expose them to a vendor. Others don’t know how or where to begin connecting the dots to identify customer pain points that could be addressed by a vendor’s particular product or solution. Regardless of the reason behind it, this failure to fully leverage customer relationships can be addressed if a solution provider has a healthy partnership with vendor channel account managers (CAMs).

While the sales process may be accelerated as the result of a pre-existing association between the partner and end user, familiarity can go only so far. But the relationship between a partner and a CAM can be a sales game-changer. CAMs can help partners understand a product or service’s value proposition and position it in a way that delivers strategic outcomes to a customer. The result? High-impact revenue opportunities. Through collaboration, partners and CAMs can look at ways to create solutions by integrating their products and/or services based on a customer’s need, not a predefined model.

Although it’s disappointing to admit, partners aren’t always good at evangelizing, which is why they need to be enabled by their vendors. That doesn’t mean they can’t learn when provided with the right guidance on key capabilities, such as business acumen, sales ability, marketing, technical expertise, and support, just to name a few. Here are a few steps that vendors should keep in mind:

Obtain Partner Support
It takes encouragement and determination to convince partners to accept and commit to a program, especially when part of the plan involves meeting performance expectations. Whenever possible, vendors should let partners’ voices be heard. Partner Advisory Councils are a great way for vendors to keep their fingers on the pulse of the partner community.

Set Measurable Goals – But Encourage Stretch
Goals aren’t one-size-fits-all, but top-performing partners should be highlighted whenever possible as the model to mirror. Vendors should create an incentive or award program that draws attention to the leaders, as well as the laggards. The objective for all partners should be earning their channel program status by exceeding average expectations, not staying in a program by maintaining the status quo.

Provide Continual Communication and Feedback
Once the goals are established and the partner takes ownership of them, CAMs should set up monitoring systems, processes, and specific checkpoints to ensure the partner stays on track. Regrettably, many vendors implement performance systems but perform quarterly business reviews (QBRs) as a formal process, without working with the partner on in-depth business planning. Vendors should take the time, whether in person or over the phone, to review partner progress, identify opportunities, and discuss challenges, as there are many benefits for everyone involved.

Review Rewards and Consequences
The channel is ripe with discussions regarding MDF programs, SPIFs, incentives, and other rewards for performance. Should there be consequences for subpar performance? Inactive partners make up a portion of every vendor’s partner community, and they can drain a vendor’s resources. There’s an opportunity for CAMs to start a dialogue with these partners that may bring them back into the “active” column, or release them once and for all.

In short, channel partners are the relationship managers of the IT marketplace. They hold the key to thousands more accounts than any one vendor can develop and maintain organically. Brokering the deals those relationships can unlock is gold to vendors. And yes, gold is a commodity, not a currency, but you can still take it to the bank.


Diana L. Mirakaj is president and chief operating officer of The 2112 Group. You can follow her on Twitter at @dlenam.