The news that Cisco is planning to channel up to $1 billion in mid-market leads to partners around the world in its fiscal year 2014 (which runs from the end of July to the end of July 2014) is probably very welcome to many. According to MicroScope, that represents twice the value of the leads passed to partners in the current fiscal year. Those of you wishing to catch up with further details can find them here .
Gartner vice president and distinguished analyst Tiffani Bova made some interesting comments concerning the whole area of lead generation. First off, she warned that those partners receiving leads under the programme should make sure they convert them. "Cisco will be able to identify which partners are performing and vice versa," Bova said, "so if they are unable to convert those leads, then Cisco will do what is needed to get those leads taken care of, whether that is [to] find another partner or help the existing partner with whatever they may need."
But it was the more general point she made about lead generation programmes that really drew my attention. "While I like lead distribution programmes in general," Bova remarked, "[the changes to Cisco’s lead generation programme confirm] the fact that the indirect channel continues to struggle with creating its own leads and demand."
And why was that? According to Bova it was partly down to the fact channel partners were not willing to invest in "their own marketing resources and activities without the assistance of their vendor partners" which was putting their growth at risk over the long run. "If any of these programmes change or were discontinued, how would they then find new customers and grow their business?," she asked.
I can think of a few very quick responses people in the channel might make. Regarding the changes to Cisco’s lead generation programme, some would probably argue Cisco made the changes because it wasn’t working properly rather than down to of any shortcomings in the channel. In that context, it’s interesting to note the comment from Rolf Versluis, CTO of Cisco Gold partner Adcap Network Systems, in the MicroScope article: "As far as I can tell, the only leads we’ve gotten from Cisco over the years have been from the individual account managers working with us on specific things, and even that doesn’t happen very often."
As to Bova’s query of how partners would find new customers and grow their business if lead generation programmes were changed or discontinued, I’m sure quite a number of partners would say that if they relied on those schemes to survive they would have gone out of business a long time ago.
In fact, you could argue that lead generation programmes are potentially more significant for vendors than for partners. They tend to be part of the package that vendors lead with when they’re seeking to recruit partners (along with marketing resources). These programmes can be seen as a way to strengthen ties between the vendor and channel partner and potentially help keep a partner loyal when a rival vendor comes calling. Besides, it’s in the vendor’s interest to have a lead generation programme in place for its outsourced sales and support channel to work with to boost sales of its products.
In the main, partners deliver incremental business from their customer bases and that’s one of the attractions. Yes, vendors can save costs by using channel partners to sell lower end, less complicated product and leave their internal sales force to concentrate on high value big ticket business, but they also rely on resellers to broaden their reach to customers.
In the past, one of the big gripes with certain vendors is that they have kept the best leads for themselves and passed over the less promising ones to their partners. Needless to say, once partners found out what was happening, they didn’t knock themselves out in fruitless pursuit of hopeless causes.
I guess what I’m getting at is that while it is in the best interests of vendors and channel partners for lead generation programmes to work well, they can only work well if the leads they generate are worth the effort of trying to close them. The vendor can assign any value it wants to those leads but the true value, rather like any currency, is reflected in the conversion rate.
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