While kicking around an idea for a future article in Irish Computer magazine suggested by the editor, I had a fascinating discussion with someone in the industry that threw up some really interesting contradictions about vendors and their approach to the channel.
The article was supposed to look at ways in which channel companies might be able to deploy market intelligence provided from sales information to better target and sell a vendor’s products into the Irish market. So, for instance, if there was a discernible pattern that showed a particular product was gaining significant traction in a certain vertical market or geographical part of Ireland, that could be fed back to resellers to help them sell better.
I assumed this would be quite easy to do and that it was probably something already happening but it appears this may not actually be the case. You wouldn’t think it would be hard for vendors to collate this type of information and then provide it back to partners. After all, it’s the kind of thing businesses with a direct salesforce would probably automatically expect to provide to their sales people. And it’s something the vendors themselves are often guilty of marketing to users through their channel partners, suggesting that deploying their products will give businesses greater visibility of customer interactions and the intelligence to use that information to target and sell more effectively.
So how come they can’t or don’t provide the same level of market intelligence to their channel partners? Well, first off, using the channel as your salesforce is not the same as having your own directly employed salesforce. There are issues of confidentiality and questions over how much information a business is happy to share with external companies, even if they are "partners". So even if the vendors have the information, it’s highly unlikely they are going to share it. They might give partners a watered down version, but it’s unlikely to be commercial gold dust.
Then there’s the fact it’s harder to share information with a channel partner when it is very likely to be selling products from a rival as well. Vendors don’t want to give too much away to a company that also has links with a competitor. It’s much easier to disseminate this type of information to a direct salesforce because people in that salesforce are not only directly employed by the vendor but they’re also very unlikely to be selling competing products at the same time. Not unless they want to get fired!
So, you could argue that by electing to use the channel as their sales force, vendors are potentially limiting the information flow up and down the supply chain. Yes, they don’t have to go to the expense of recruiting and training their own salesforce and by using the channel they get a much wider reach into the market but at the cost of being further removed from it.
From the channel’s point of view, the information partners share with vendors is likely to be less detailed than the intelligence a vendor would get from its direct salesforce. Why? Channel companies are fiercely protective of the "relationship" they have with the customer and often concerned that their vendor partner could, with a sudden change of channel strategy, threaten that bond.
In some ways, you might think it’s surprising the model works so well for vendors and their channel partners given these constraints. But I suppose it just goes to show that the model works very well if vendors stick to what they’re good at (making products or developing technology and marketing them) and resellers do what they’re best at (selling and supporting those products, technologies and services to their customers).
However close the links might appear, the fact remains they are separate entities with their own distinct goals and objectives. At a very basic level, those goals and objectives may coincide, such as selling more products and making more profit.
The ideal relationship between vendors and channel partners would be akin to that between a premier league football team and its players, but it’s actually a lot more complicated than that. The vendor may well be like a Man Utd, Arsenal, Man City or Chelsea, but when it comes to channel partners, the difficulty is the players are all playing for rival clubs at the same time. No wonder the manager might be loath to share all his tactics with them.
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