Only one third of vendors hitting channel sales targets - research

Vendors with 'highly successful' channel programmes rake in £50m a year from top five partners, according to Investec

Just 32 per cent of vendors are hitting or exceeding their channel sales targets, according to data from Investec.

The firm's findings revealed that 52 per cent of vendors are frustrated with missing sales targets, and expect they will have to significantly overhaul their partner programmes in the near future.

"Too many tech companies only view the channel as a means of distribution, and this is seriously damaging opportunities for revenue growth," said Junya Iwamoto, associate director at Investec.

"There needs to be a cultural shift of listening and taking action on the advice that channel partners provide."

The survey also found that poor channel performance is a major factor in a company's ability to scale up.

"We know from working with technology leaders that they spend time and energy building a vision, developing intellectual property and getting viable products to market," Iwamoto said.

"Once they have that laser-like focus on strategy, it can be hard to shift their mindset and accept feedback from third parties.

"That doesn't just hamper scale-up opportunities - it can hurt existing business. Having a dedicated research and development team hardwired into the channel programme is essential."

Investec warned that switching partners won't solve the frustration caused by missing targets, advising that transparency, strategic alignment and mutual support are needed between both parties.

According to the survey, businesses that consider their channel programme to be ‘highly successful' rake in £50m per year from their top five partners, compared with the £16m hauled in by those who consider their programmes ‘unsuccessful'.

"The impact of a successful channel programme can be significant," said Iwamoto.

"Our research showed that, when successful, IT companies can capture over three times more revenue from their largest partners when compared with unsuccessful channel programmes.

"Culture change, better listening and treating channel companies as genuine partners are probably the most significant steps a tech leader can take if they dream of achieving scale-up growth."

The company undertook a survey of 250 IT leaders in the UK to better understand the importance of channel sales to business growth.