Report: Vendors Squandering Channel Relationships

The Chief Marketing Officer Council has released a Channel Performance Outlook Study that chastises the vendor community for not taking the channel as seriously as it should and for wasting millions of dollars on inadequate lead generation programs and branding campaigns.

Vendors have been trying to figure out for decades how to work successfully with channel partners. Recruiting and supporting VARs is a significant undertaking, but it can yield rich rewards, as thousands of vendors have found over the years.

However, the complicated relationship among vendors, VARs and customers is due for a major reinvention.

The Chief Marketing Officer Council has just released a Channel Performance Outlook Study that is a clarion call for change. It chastises the vendor community for not taking the channel as seriously as it should and wasting millions of dollars on inadequate lead generation programs and branding campaigns. Among other things, the report finds that less than 7 percent of resellers cite vendors as their most valuable source of leads and 70 percent call vendor marketing campaigns ineffective or only somewhat effective.

Now, channel partners have been pushing vendors to do more marketing since the channel was invented, and the number and quality of vendor leads has been a sore point for decades. Still, the survey results are pretty sobering. They paint a portrait of customer confusion, wasted resources, lingering channel conflict and growing channel alienation. The survey reported that as much as 80 percent of business leads from vendors may be lost or squandered, which is certainly a lot of business for vendors and channel partners to lose.

The study involved 500 resellers, dealers and distributors and was sponsored by Blueroads, which provides partner opportunity management solutions.

Dave Murray, executive vice president of the CMO Council, believes the report's rather depressing findings underscore the need for CMOs to get more involved in properly aligning the vendor, channel and customer communities. "There's a huge opportunity for companies who get this right," said Murray, noting that an estimated 70 percent of IT sales move through the indirect channel.

Craig Downing, director of marketing for Blueroads, said the study found that VARs get a lot more new business from customer referrals than they do from vendor lead generation. Creating an incentive program for customer referrals would be one concrete way vendors might better allocate their resources to the channel, he suggested.

The report also mentions that partners desire better training from vendors and other help to make them more productive. And it found a much greater need for vendor field marketing representatives to engage in more cooperative sales efforts. Channel partners also want vendors to respect their turf, help them better understand how to use their products, offer more training and become more proactive.

Despite all of these issues and problems, there was one at least one bright spot in the CMO Council Report: Some 57 percent of the channel expects a substantial increase in business this year, despite all the concern about an economic downturn. That's one finding you can cheer about.

TAGS: management,support,IT,marketing,survey,Office,CA,OS,business,VAR,distributor,EFF,SCO



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