An increasingly diverse channel landscape now plays host to so much more than sales of servers or PCs. With this diversity has come a mindboggling array of channel marketing programmes and requirements – many characterised by top-down communication seemingly ignoring reseller needs and realities.
Vendors as a result are constantly changing their channel programmes – causing yet more frustration on the receiving end. Vendors need to align their channel programmes with both vendor and reseller business objectives. It is a mammoth task.
Phil Seward, general manager at global loyalty marketing agency ICLP Americas – which today has many IT vendors on its books – says there are lots of different products and services but also lots of different specialisms. IT providers generally suffer from time-scarcity, budgets in distress, and reduced headcounts. Yet there is still that expectation to achieve even more than ever before.
You cannot sign up with everyone and just hope for the best. “You have to work with vendors that will help you and can add value. It is about sending the right message to the right person at the right time, in the right company, across the right medium,” Seward says.
Probably the number-one question for vendors is ‘what are resellers worth to you?’, says Seward. Vendors already have value data but need to map out the opportunity to influence resellers, helping them to grow. To do this, they need to understand the resellers better individually, asking whether each reseller is able to grow, or even wants to. Is a reseller at maximum expansion already? How ambitious are they? Do they want to achieve top-tier partner status, and if so, when?
Some partners are valuable in other ways than straight volume – but this may be ignored by many vendors, which don’t have a ‘bigger picture’ view of each reseller, equating to missed opportunities.
“So what is the other data that could be out there, that will help you understand the resellers’ needs versus you as a vendor and them? And then what will let you use that to help you drive communication?” he says. “What are resellers’ needs? What is their sales and marketing process? It’s all about data. Vendors probably have data coming out of their ears. But it is not just about collecting data, but how you mobilise data, do communications and evolve your strategy.”
More segmentation can be done using a multi-faceted yet unified approach that harnesses a combination of the formal channel programme with carefully thought-out loyalty marketing, for example. Partners are starting to call for a more intimate dialogue with the vendor, he adds, so information collected should also be shared back to the reseller, so both can benefit.
Things are constantly evolving, especially with the shift from boxshifting to solutions sales, making it trickier for vendors and resellers to match up in mutually beneficial ways. And neither partner can afford to invest in areas that do not offer a return. On this point, vendors need to take a lead from resellers themselves.
“Resellers need to monitor and connect with [the vendor], spot the areas of particular cultivation. And vendors need to find resellers that fit the opportunities, that have the specialism that can take advantage of them. But how do you spot those guys, so you can then pick which resellers to handle different brands? That’s really a challenge,” says Seward.
Penny Philpot, group vice president for the Oracle Partner Network (OPN) global partner programme for worldwide alliances and channels, agrees broadly with Seward’s sentiments.
“We have had a programme called OPN for about 10 years. When we first started, it made a lot of sense,” she says. “But two years ago or so it really started to fall apart at the seams. That was becuase of our acquisition strategy: over the last 4-5 years, we have bought over 60 organisations and many brought partner programmes. To be honest, we have run out of duct tape.”
The company has now bought Sun, complicating life further the set-up of thousands of products and diverse associated partners. And without the right focus given expression in a suitable programme, even Oracle’s sales people do not know who to target, she says.
“It is really important to make life as easy as possible. If you can make it simple somewhere, from an agreement perspective, that is really very helpful. So we did a massive overhaul and now have a new programme,” says Philpot.
Not only did Oracle simplify its partner programme to give it more purpose, but to allow partners to choose where they wish to specialise. On the other hand, the new set-up allows Oracle to ask partners to step up and invest more, while easing their work with the vendor.
It is a project in progress. “In six months or so, we aim to have over half our partner base migrated to the programme,” says Philpot. “And in the final stages of the transition, we still had this challenge with Sun. It was like, ‘oh my god, Larry, what did you buy?’.”
Sun had two support teams working with different programmes, across different regions.
Benefits and some other things were all regionalised and sometimes segmented by contract as well. The partners didn’t understand it either, claims Philpot.
“I felt like my eyes were bleeding, going through all that information,” she quips. “But we went on making it simpler. Perhaps eventually we can buy Coca-Cola or something, and our programme will still fit.”
OPN also had to reduce costs overall and increase operational efficiency as well as giving direct contact through a new portal alongside telephone support so you can always get a human being to speak to worldwide.
“If you expand your partner base, you need to keep the value, but you can’t simply add more headcount,” says Philpot. “Partners can come to us and take advantage of anything we are offering. We want to see that they can cherry-pick our products and access the market they want. We don’t want to stop anyone from exploring other opportunities, but we do want to acknowledge people’s record of investment into a particular product or market.”
OPN has dispensed with more than 16 different categories of reseller – instead of being pigeonholed as an ISV, SI, VAR or whatever the new approach is more partner-led. Individual firms specify how they want to do business with Oracle, and Oracle aims to support that, she says.
“That has made it so much easier. Which company today can be pigeonholed into just one area? We are all going off into different opportunities. We all have to diversify,” says Philpot. “And we are doing a lot more to recognise organisations who do not actually put the licensing through their paperwork, co-sell and things like that.”
She adds that Oracle has redesigned the way its partners get enabled and accredited. Instead of promoting a particular certification per solution, the company has worked to decouple the two things, so resellers can more easily cross-credit skills and training they have already had.
Philpot notes that lots of things have very similar specifications or basically work the same way, so people should not really need to jump through yet more hoops every time.Also, instead of taking people off the road for 15 days and sitting them in a classroom, more can be done online, or free or at cost, Philpot says.
Loay Lawrence, commercial director at Vohkus, thinks the new approach sounds promising. “We have salespeople pulled off sales to go on training courses, and losing five people for a day, it is an investment. The big expectation from vendors is there, because they are not on the front line. We are. We need people going out to sell,” he says. “And, for a lot of things, for say certain IBM, HP, and Dell servers, you should not have to go through the whole [training] rigmarole again.”
Vohkus invests “heavily” in certifications an accreditations because it brings knowledge into the company and is recognised by vendors. But vendors must limit what resellers have to do to qualify to what is really needed, rather than simply expect that somebody who works with a certain service or product has to necessarily be certified in that exact same service or product, he suggests.
What is more, some vendors have been known to put certifications in place and then change the rules – wiping out any benefits the reseller may have accrued thereby, he says.
“I want the vendor to understand us and give us consistency and commitment,” says Lawrence.
Things had to be targeted to individual resellers and regions, and a more timely and direct flow of information from vendor to reseller was in order in many cases. “Each reseller has different requirements. We have tended over the years to have global programmes. But what works in Germany, or the US, or South Africa does not necessarily work here,” he says.
Lawrence says partners often have their own programmes that work, and vendors need to ensure they don’t work against their partners. The old way with companies like Intel was: ‘How many processors have you sold?’ While resellers have to fit into vendor requirements, vendors must work harder at understanding reseller businesses.
“Understanding of a business is the important bit,” Lawrence says. “We did a programme with Intel a year or so ago. For a quarter, we were happy because it increased sales. But then we’re back with that consistency bit – they did it for one quarter. Intel should have kept doing it, but didn’t.”
Broader reseller community
Richard Peel, director of membership sales for EMEA reseller operations at Intel, says its partner programme over the last 10 years was primarily focused on 10-15 global companies that it worked with directly. But it has been asking how to extend its account management into a much broader reseller community.
“Intel has been talking to a very small subset of the reseller community – SIs or system builders. So we are engineering our Technology Provider Programme so if you buy HP machines, or put voice through Cisco products or any other product, how do we engage with you, in a way that you can use to help yourselves make money,” Peel says.
“It is about understanding, commitment, information, communication and make it local: make it relevant to more people in the UK. And that gets into how you segment your information,” he agrees.
“We are not going to please all the people all the time but we will try very, very hard. We can’t talk to resellers about Intel CPUs, that’s not interesting to them. But what is interesting is how Intel can help them become more profitable.”
In the old days, he adds, it was easy for Intel to track through distribution the value of its sales and what was going on. But these days things are different. Vendors must measure partner engagement in different ways. “It addresses new problems, but they are good problems,” says Peel.
Simon Meredith, proprietor of Meredith Media, veteran channel journalist and chair of the seminar, says the pace of channel change has accelerated lately, if anything. People are moving into more areas, acquiring new skills. And the channel has seen increasing convergence between IT and communications industries, and more recently between the mobile and audiovisual channels. He is sure the changes will continue.
“A couple of decades ago, reselling was a fairly simple business. It certainly isn’t now,” says Meredith. “So relationships are becoming more and more complex. Just about every reseller partner now has different needs and they are often very specific needs. So you may very well ask: ‘Who moved my channel?’.”
ICLP 0207 422 5586
Intel UK 0179 340 3000
Oracle UK 0118 924 0000
Vohkus 0845 647 0400
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