David Ellis, head of Technology and Services at Arrow ECS EMEA, says vendors or distributors planning to build channel programmes “need to be very clear in terms of their expectations and what they want to achieve”. That hasn’t always been the case. “Sometimes, vendors have built programmes with no clear view of what they wanted to achieve,” he remarks.
To achieve an effective channel programme, vendors need to think about a number of factors, such as their revenue and profit expectations; the market coverage they want to achieve (whether it’s geographical or vertical); and the type of partners they want to address those vertical markets. “If you look at the channel, the needs of a VAR are very different to the needs of a MSP, which are very different to those of a global SI or ISV,” Ellis says. “Vendors may have to build programmes that take that into account, as well as the fact the way those types of channels go to market are very different.”
“It is much easier to get the channel motivated to make investments in technical and sales training and to promote vendors’ products to their customer databases when trust is there” – Michael O’Hara, Data Solutions
At its simplest, vendors need to build a plan that encompasses a top line number, includes an idea of the markets they want to target and maps out the channel that they think can deliver it.
Vyvyan at Sophos argues vendors “have to work for the resellers. They’re our customers, so we have to be more margin rich, easier to deal with and we need to add value”.
Part of that comes from understanding how resellers work. For example, Sophos’ smaller partners service a number of small business customers in a relatively small geographic area. “What kills their profitability is having to get in the car,” he says.
Sophos has to appeal to those resellers and to much larger partners where it is in competition for the reseller salesperson’s attention with the likes of Microsoft and HP. “A salesperson could earn money at a generalist reseller selling what the hell he or she likes,” Vyvyan states bluntly. “They don’t have to sell security, so we have to add more value as a team to the resellers and make the programme more margin rich. We don’t have the same demand in the market as some of our obvious competitors or larger IT companies that soak up a lot of salespeoples’ attention.”
For consideration
Ellis at Arrow ECS believes that vendors need to consider what they think resellers will want. “Sometimes, vendors look at it from their perspective and not from the partner’s perspective but if partners don’t feel they’re getting value and, more importantly, ROI from the vendor relationship, they’ve got options. They can look elsewhere and look at vendors that can deliver [what they’re looking for].”
The other thing that vendors need to take on board is that resellers “need to see a quick RoI”. In the past, resellers might have been willing to invest in technology if it was exciting or sexy, but things are much tougher today so they need to look for a quick RoI. Ellis suggests that they are times when vendors “may need to start with a relatively small channel to help drive revenue through that channel and then look at expanding it with the next tranche of partners later”.
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