Editorial: Nurtural selection

Editorial: Nurtural selection

There's an old adage in vendor-land that goes something like this: when the going gets tough, the channel gets going. Slightly adjusted, it basically tells you how indispensable the reseller is in the grand (and very tough) scheme of IT things.

Take Samsung, for instance. It recently handed 100 direct LCD monitor accounts to resellers after realising its direct sales force was simply not reaching and servicing all segments of the market as well as its resellers could. The new channel program of HP's imaging and printing division is based on a similar premise: keep giving the reseller incentives in order to improve geographical coverage. Distributor Lan 1, too, is choosing a select number of resellers to hold hands with in order to win more business. Spot a trend here?

According to Braham Shnider's consulting firm Channel Enablers, vendors and distributors alike are putting a lot of effort into finding ways to improve their partner relationships. Vendors that don't have channels are setting them up for the first time. Smaller distributors dependent on an active reseller base are opting for proactive approaches themselves - they are keen to intensively nurture a smaller number of relationships to generate higher returns. In other words, finding cost-effective ways of reaching as many customers as possible, while at the same time reducing overheads, is the order of the day.

Of course, this is possibly the worst-kept secret in the channel. Birds on trees already sing about the fact that in Oz, volume and service mean one and the same thing - the channel. In fact, according to research conducted by Channel Enablers, year-on-year product sales through the channel are growing much faster than direct sales throughout the Asia-Pacific. Except, they're not going fast enough to meet ever-increasing revenue targets. As a result, both the market and those trying to flood it with new products are equally depressed. And Prozac ain't gonna help (although a little more innovation - as opposed to profit chasing - would, but that's a matter for another editorial).

The point is that while vendors complain that resellers aren't skilled enough in hunting new business opportunities, the abovementioned research indicates they are better (or at least faster) at moving product and servicing the market than vendors themselves. In return, resellers expect more consistency, support and better behaviour in terms of how vendors apply their sales rules.

When it comes to winning more business for the vendor, it is the Lan 1-type active involvement in the lead generation and sales process that pushes things along at a time when everything is a hard sell. Simply telling resellers to go out and develop new business opportunities is not going to accomplish anything. Transferring business development skills down the food chain might. Realising that times are simply tough and giving resellers a break could help too. What's your view?

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