Becoming a strategic channel partner

Becoming a strategic channel partner

There are many ways to segment a given market. For my simple mind, I like simple formulas. In that vein, let's say there are two types of channel customers: those who use technology as a weapon and those who use technology as a crutch.

Those that use IT as a weapon have been referred to as "the new enterprise", companies that are looking to maximise sales and push levers to create sustainable, competitive advantage. The new enterprise is a $US239 billion worldwide market opportunity, and more than half of it is being handled by indirect sales channels. In fact, the channel piece is growing. So how does the channel successfully serve this aggressive customer segment? Not long ago these market conditions would have triggered a rallying cry to staff up and train a gaggle of salespeople with silver tongues, outfit them with fancy suits and fat expense accounts, and let them loose on the CXO crowd.

That won't cut it today - not against this fast-moving group of IT decision-makers. Do you really want to play with these MBAs who are packing electrical engineering degrees and calculating ROI on the fly? They're looking to leverage partners who can deliver projects on time and, more important, on budget. And that's just the ante. The middle-market customer wants a strategic partner, not a silent partner that does projects in a vacuum. Constant communication and coordination are additional keys to winning more contracts and building long-term relationships.

Here is another simple formula for becoming that strategic channel partner: your goal: operational excellence. Key tactic: recognise that your lead product is great customer service. Suggestion: choose vendors that meet the following criteria (in order) and therefore support your goal:

1. Deliver great customer service to both you and your customers; 2. Help you reduce costs by eliminating organisational redundancy (ie leverage call centres, lead sharing, and tech support); and3. Provide best-of-breed products and solutions, and support them well. Friends, tweaking your business model is worth it. Sales through indirect channels are growing well beyond market averages.

According to International Data Corp, the CAGRs of systems/server and software products are above 25 per cent, and networking products will also take a significant leap forward. Overall, indirect sales to the enterprise are growing nicely - except with PC products, which are actually weighing down these averages. That's more proof that you need to move away from the distribution/logistics game of the computer-reseller channel. If you are a supplier with one of those behemoth direct-sales organisations and you're looking to tap into the new enterprise, then you'd better review your model, because the indirect model is delivering this customer with increasing momentum.

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