Individually, vendors and reseller organizations are relatively well-run, rational businesses focused on driving revenue. Why is it then that so many complications arise when these two groups start working together? It starts with little or no business alignment. Then distrust seeps into the relationship. The finger pointing begins. The relationship gets bad fast.

It doesn’t have to be this way, and we’ve seen a number of vendors who are approaching it in the right way: as a true partnership based on bi-directional value, accountability and trust, and most importantly, joint revenue growth. There are a number of simple steps that vendors and partners can take today to begin the process of building an effective relationship.

Vendors and resellers both share a focus on driving sales and have similar internal organizational structures, but a key difference lies in the fact that if things aren’t going well at the vendor level, the regional VP can always walk down the hall to administer the right level of “encouragement” for employees. On the other hand, indirect channel partners may seem less predictable in their results because they are lacking the motivation to behave in a predictable way.

One reason why channel partners may not feel compelled to behave predictably is that they question the vendor’s lead distribution process. Even in fairly enlightened channel organizations, lead distribution generally goes something like this: Marketing runs a campaign, and the leads are sent to the direct team for qualification and assignment to the most appropriate sales team member.

This approach seems to make rational sense in coordinating opportunities, but this also gives the direct team some flexibility in how they interpret the “named account” list and handle these leads. It is not surprising then that usually all of the A and B scored leads go to the direct team, then the C, D and “not qualified” and “missing data” scored leads go to the channel team for distribution to their partners. Data from a recent CMO Council study that we sponsored called the Channel Performance Outlook confirms this: only 7 percent of channel partners consider vendors a key source of their leads. 

Two interesting things occur as a result of this. The first is that the partners begin to follow up on the leads only to discover that they are garbage, so they cease further follow-up. Secondly, the direct team takes the highly qualified leads, contacts them, converts 30 percent of them to opportunities and ultimately turns 30 percent of those into revenue.

Now, when marketing runs a report to find out what happened to all the amazing leads they generated, they discover that the direct team is predictably amazing and partner organizations are predictably a “black hole.” The next time leads come around for distribution, the same thing happens. However, in this second go-around the partner organizations don’t even bother to review the leads at all. The situation spirals downward until a meeting at the partner conference where both the partners and marketing are extremely frustrated.

Go to page: 1  2  Next  

Channel Insight Archives | Contact Charles Watson | Back to top

Channel Changes

Channel Insight