Last week I covered channel recruitment from a vendor’s perspective. Now let’s look at it from a partner’s perspective. While the vendors are looking to recruit new partners, the partners are analyzing the cost/benefit of taking on a new vendor’s product. There are more considerations than one would think.
For instance:
1. Is the vendor’s product a good fit for your arsenal? If you focus on virtualization and cloud computing with products like Hyper-V, VMware, Salesforce.com, and StarWind then EMC approaches you about selling one of their Back-up and Recovery products you certainly aren’t going to change your entire business model to add on additional product.
2. What is the ROI of introducing a new vendor? To sell a new technology and do it right there are costs incurred by you and your team. You must figure out the value this partnership could bring you (i.e. REVENUE) then subtract out the costs and decide if it is worthwhile. Costs include administrative, certification requirements (both time out of the field and the payment for training), changes to your website and other marketing materials, and marketing programs around the new products and services.
3. What benefits does the vendor offer? If the vendor product sells itself, great, but we know of few that do that (except for maybe Microsoft). Otherwise, you need to look closely at the level of MDF, technical support, training, incentives, and marketing programs this vendor is going to provide. Walking into a relationship saying “Where are my leads” isn’t going to work; a) the vendor will see you as not valuable and b) what good are leads they give you if you haven’t been trained to sell the product yet anyway?
4. Are you weakening any of the brands you already sell? I would never suggest that a partner should only have one vendor product per solution, however, you need to take into account that any claims may be weakened by bringing on a competing product. If you have based your company around selling NetApp because their iSCSI SAN technology is the best product for your trusting customers, you can’t then take on Dell EqualLogic’s iSCSI SAN touting the same thing. You would weaken your own brand as a trusted adviser. You could play on different uses for each (performance versus price), but you’d have to get pretty creative.
5. Does the vendor value you? This may be part of “the benefits they offer you” but I felt it was important enough to get it’s own bullet. Does the vendor truly value you and their other partners? Do they have a reputation for dealing poorly with channel conflict between their direct reps and partners? Are their requirements in-line with the benefits they offer or are they asking too much? If you only do one transaction a quarter will they provide you with the support you need to improve that or treat you like a second class citizen?
Overall, taking on a new vendor is not a decision one should take lightly. It’s like hiring a new executive or board member: are they going to add value, do they fit with the culture, and are they willing to learn from you as much as you are from them?
Where’s the Win-Win?
My opinion on channel relationships in general is that it must be one of reciprocation.
- I do not appreciate when channel partners expect to get leads or other benefits without putting any skin in the game.
- I do not feel vendors have the right to expect more out of their partners then they are willing to give.
- I think partners and vendors both have the right to decide if the other is a good addition to the team, and once they have, to treat each with the respect that the mutual relationship deserves.
I’d love to hear others feedback, comments, or stories of a channel relationship gone good — and bad.
Contributing blogger Heather K. Margolis, the Channel Maven, has led channel programs for major IT companies. She also has extensive lead generation and marketing experience. Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center.
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Great post, actually great series of posts. Very helpful insight, thanks.
Reassuring to hear this perspective as it is closely aligned with the way we have put together our channel partner program. We’ve really put the extra effort into understanding the needs, and then focused on delivering a program that takes a “true partnership” approach to giving channel partners what they need.
Looking forward to your future post to continue my channels education, my specialty is more online marketing and it’s great to get an experienced perspective.
Thanks so much Karl. It’s so great to hear you think of your partners needs and goals before creating a program. Best of luck and I appreciate you tuning in for the channels insight!
Great thoughts on the channel. As a partner, I learned a long time ago that engaging effectively with channel players is critical to really succeed in this business. We can’t do it alone, and to attack the market in any fashion other than throught cooperation and close integration with our vendor and disty partners is just plain stupid. Too many partners see the vendor as an enemy. We see them as our best friends. We build relationships. We participate and support their programs and channel investments. We truly PARTNER. That is what this all boils down to. Building win – win relationships where everyone has skin in the game and benefits when that skin produces an ROI. It can’t be any other way. It has to benefit all involved. It has to be in the best interest of all parties. And ultimately the end customer has to be well served. That is a true channel program and what I hope all will work to create. Keep on sharing those thoughts – it takes a village to make a change!
Arlin: You and many other solutions providers have also mastered the fact that there’s strength in numbers. Through VAR-oriented peer groups, you’re able to ensure IT vendors hear healthy feedback from a unified voice. Smart.
The IT channel can be a strange place. You’re right: Plenty of VARs consider their vendors the enemy. Very confusing. And disappointing.
Once again, a good article that demonstrates that the VAR is the most important player in the chain, as ‘getting the sale’ is the hardest job. And maybe we expect too much reward for this service in the form of high margins. Oh well, I will not lower my expectations and select only those manufacturers that assure even their small partners will be fairly compensated.
‘Does the vendor value you?’
It may have been my mom that told me:
In any relationship it is important that each player needs the other an equal amount. If a VAR needs a manufacturer more than the manufacturer needs the VAR (or vice versa) find another partnership as the one you are in may be doomed. This philosophy also applies to any partnership: marriage, employee/employer, VAR/manufacturer, etc. etc.
So if you are a manufacturer and one of your small VARs approaches you and complains about thin margins, be very worried and don’t dismiss it. I think this is what has happened to Novell over the last 10 years. If a manufacturer says: ‘I can give you a better margin, if you sell more.’ and the VAR says: ‘I can sell more, if you give me a better margin.’, then you are in a Catch22 where neither partner needs the other, and the relationship is doomed.
HurdyGurdy,
Your mom speaks the truth! It’s so important that on both ends of the relationship value is provided.
Thanks so much for the comments! They add incredible value, keep them coming.
Talk about a reciprocal relationship!