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Rethinking your channel strategy

I often get comments from channel partners about what vendors have done to back-stab them. Some are really incredible and I get lost for words. What really surprises me is how some vendors continually bite the hands that feed them. It is also mind-boggling that in 2016, we are still talking about more channel conflicts. Most of us would agree that the channel is not a disposable product. They are not things that you use when you need and then simply throw away!

I would suggest that channel partners return the favor to vendors who do bad things to them with the same disrespect. At some point, we all must understand that the channel is made up of real people running businesses that meet an extraordinary need in the economy. No one company can deliver 100%. If this was the case, companies like Apple and DELL would have put everyone out of business already.

Arguably, Apple has come closest to a closed ecosystem under their iron-fist control. Just speak to some of the Apple resellers across North America and you will hear some hair-wrenching and heart-breaking stories. Apple’s beginning was once a pure-play channel company and while we rightly give a lot of credit to the great Steve Jobs and his team for what they have accomplished, I believe that the credit must also be shared with the thousands of Apple resellers who believed in changing the World one person at a time (way back when it was not so popular). Without the channel’s evangelistic-like support over the first few decades, the Apple message may have never be heard as loud. The channel stuck with Apple during the hard times even when it seemed that the company may go out of business!

Microsoft’s partners have big issues too. I wrote a recent article on Microsoft’s recent WPC where so many good things were said about the channel as the heart and soul of the company. On the other hand, I recently read an article about the Microsoft’s partner’s grumblings with the company. What’s the truth?

Most channel partners feel that they are helpless to combat vendors who treat them badly. Unfortunately, they are too independent to be fully united to leverage their real collective power.  They represent hundreds of thousands of businesses and hundreds of millions of end-customers. It’s a mighty force that no vendor could ever match.

The big problem with vendors is channel conflict. Vendors fall into roughly five camps. The vendors who decide that they are 100% channel and stick to it. The vendors who exploit the channel to get traction and growth so they can eventually take over the transactions. The vendors who ignored the channel, thinking they can go direct (when they hit the wall, they reverse to develop a channel plan, hoping the channel does not notice). The vendors who think they can play on both sides of the fence and get away with it. The vendors who just do not get the channel.

As a channel guy who understands the DNA of the channel and I am sure other channel experts will agree…Vendors need to make a clear choice about their channel-friendliness or at the very least, ensure that the rules are clear. It is either you are a friend of the channel or not. No one likes a friend of convenience who only calls you when they need something. Friends should be there in good and bad times.

Instead of vendors spending so much time, energy and money playing these mocking channel games, why not just commit on either being direct or 100% channel. There are pros and cons to both go-to-market strategies and while it may be possible, I have yet to see a successful hybrid strategy. So many examples like Dell being direct from the start and now they have shifted to the channel. Do we really need more evidence to justify the channel?

Smart vendors with leaders who get it, understand that the channel is a very powerful sales force, product delivery and support infrastructure that they can leverage to grow business. It is simply more cost-effective to outsource to the channel than to do it yourself. It is an important message that the thousands of new Cloud vendors may want to investigate before finalizing their go-to-market plans. Vendors who just think of the channel as a way to grow business and then abandon after their ramp up their customer base is playing a game that can bite back.

What many vendors fail to understand is that just like the channel partners are not unique, vendors are also not unique. Whatever advantage a vendor may have today will surely erode by their competitors of tomorrow. Channel partners will eventually switch vendors who are not playing fair, especially when they are motivated by deceit and anger.

I am somewhat bias, but IT Vendors should choose the channel as the only go-the-market strategy. Focus their energies on getting the channel moving in the right direction to help them market and sell. Sure, they will discover some silly channel partners that will make them shake their heads, but as in every classroom, you will find a few clowns. It’s simply a reflection of life. The vast majority are outstanding and serious channel partners looking to do business!

We have been helping vendors build their channel ecosystem for decades so we know a thing or two about the beast. One thing I can tell you is the resilience of the channel to take a beating and keep on ticking. I have physically met thousands and some have since become friends. I have witnessed being in a pub with a VAR when he got a call form a client (late in the evening) yelling to fix some IT problem. The VAR does what they do best and finds a way to fix it, right then and there. How many vendors could deliver to that level of service without the channel?

Channel people are simply great human beings who are employing people and supporting their families. Personally, I believe that they play one of the most significant roles in the economy because as we all know, just about every business runs on IT.

Since, we are all in the “as-a-service” mind space, maybe vendors should rethink the Channel-as-a-Service so they can see how it fits better within their  strategy. We just launched Channel Marketing-as-a-Service to help vendors to grow their partners throughout the year for one monthly fee. It’s channel marketing simplified and updated for today’s World.

The channel is evolving and so must vendors. Some vendors should try rethinking their channel strategy if it is no longer working for them. We do something called a channel audit to help vendors uncover the facts. With this in hand, it’s not too difficult to rework the path to success. Keep on working the channel, listening to your partners and adjusting – eventually, you will succeed! You may want to check out one of my blogs on what’s happening to VARs and MSPs.

A big cheer for vendors who are and will remain 100% channel! Hoorah!

Julian Lee