You would think that in an environment with not much revenue growth, marketing would be what you do more of in order to generate demand.
But the last couple of years have been marked by a severe reduction in marketing support for the IT channel.
Contradictory though this may sound, for those in charge of market development funds (MDF) the issue seems to present less of a strategic dilemma and more of a financially sound decision. Put simply, though still an obvious way for manufacturers to achieve more geographical coverage and put more feet on the (global) ground, vendors are increasingly doubtful about the ability of their channel partners to properly use and deliver a tangible return on their MDF investment.
A recent survey conducted in the UK by the consulting firm, Marketing Performance, revealed that technology vendors were generally unhappy with the channel’s MDF and lead generation performance. The research showed that IT vendors didn’t hold the channel’s skills in high regard.
Indeed, most vendors grumpily asserted that resellers marketing savvy went no further than splurging some cash on branding a race car.
Metaphorically speaking, the vendors complained that once they spent their hard earned cash on car-branding, resellers knew neither how to take their eyes off the race track, nor how to help customers do the same in order to focus on the issue at hand — acquiring the vendor’s technology.
The observation may be a bit of a stereotype, but over the years it has become an accepted truth that resellers’ marketing savvy rarely extends beyond knowing how to put on a ‘logo safari’. It is hard to justify these claims given that unlike the IT conglomerates whose products they sell, resellers simply can’t afford to install gigantic cogwheels of marketing know-how at the core of their businesses. If anything, one would think that generating successful market development strategies is a hand-holding task that would require more — rather than less — investment from manufacturers before reseller marketing efforts can produce measurable results. And the importance of such a strategy would seem especially obvious during tough times.
Yet, as an industry figure recently observed, when it comes to strategic allocation of marketing dollars, vendors themselves leave a lot to be desired. They are increasingly reluctant to part with their money to prop up the channel’s marketing activities, yet not many seem to be doing fabulously in generating market demand themselves. Take HP, for example, which must have spent the combined annual salaries of all the staff it sacrificed to ‘streamlining’ over the last couple of years just to plaster Sydney-walls with the light and breezy, but largely pointless ‘everything is possible’ billboard campaign. Yeah, everything is possible. But what does HP sell these days? It’s hard to tell.
Is it surprising, then, that the most aggressive — and most successful amongst marketers — Dell — picks up market share even in most unlikely of places — the channel? The 2003 ARN Readership Profile shows that 2 per cent of all our readers prefer to sell Dell than any other brand, mainly because their products are so well-marketed that customers walk in asking for them. They may be the quintessential IT cannibal, but there’s no doubting their products are an easy sell.
Of course, vendors hold the key to the marketing kitty and the rules are theirs to set. But if the channel is really as guilty of wasteful and ineffective MDF utilisation as is claimed, isn’t the question to be asked one of how successful vendors have been in communicating their goals and measurables and whether, in fact, they’re investing too little where it counts the most ? Send me your thoughts.