Analytics a help for vendors and their partners

Being a successful company in the channel is about the data too, says Farnaz Erfan

Working through the IT channel can provide companies with huge opportunities to scale their business quickly, particularly if they need to build a broad geographic or industry reach. However, if mismanaged, the relationship can be frustrating for all the partners involved.

Why is this? Why do some companies run extremely effective channels, while others seem to miss the mark?

Answering this means taking a hard look at the personalities and priorities involved, and more importantly what data is available to partners -- as well as the vendor. It's difficult to execute an effective channel sales strategy without knowing which types of partners perform well in certain markets.

While many companies on the vendor side will recognise the phrase "just consider us an extension of your sales force", the truth is that ultimately all partners will make the decisions that are in their own best interests.

It is up to the vendor to invest in its channel partners, the ones that work best for them. In most cases, quality is better than quantity.

Too often companies focus primarily on partner acquisition rather than partner retention and success, figuring that every new partner should be a steady source of future revenue.

In fact, a minority of channel partners usually account for the vast majority of vendor deals. However, working out which partnerships will succeed is difficult.

Using analytics can help both vendors and their channel organisations. Many vendors only rely on their experience of what is happening in the market to build their channels.

Using data to supplement this experience creates a more powerful direction.

Segmentation of channel models, planning for service provider support, versus a more traditional reseller, as well as adding elements of personalisation and designing incentive plans based on partner value has to go beyond instinct.

Analytics can also help partners gauge and measure their own success. Should they specialise on one particular market, or expand their vendor list to reach a broader range of prospects?

What will training, accreditation and marketing for each vendor cost, compared to the potential for new business? Answering these questions without data means many channel organisations are relying on hunches and smaller wins to guide them towards the future.

Regional and industry benchmarks and peer group comparisons can show where companies are lagging behind, and where they have opportunities for growth.

While some resellers and consulting companies only look at analytics as a hot product to go to market with, the opportunity is not just about selling related products but in finding way to improve operations, marketing and sales strategies.

By factoring in market trends and public sources of data such as seasonal changes, competitor pricing and category popularity changes, the most profitable markets for products or services they offer can be more easily identified.

Analytics offerings can also allow them to run price sensitivity analysis, and using data as a way to ask vendors for partner pricing schemes that maximise profit margins for both the vendors and the partners.

Analytics can even facilitate discussions around collaborating on programmes and campaigns that create a joint competitive advantage and market differentiation for both parties.

The challenge here for everyone involved in the channel is to make sure that analytics is something that we all know, understand and use. For companies that make the best use of analytics, there are far greater opportunities than those that don't.

Farnaz Erfan is director of product strategy at Birst